Amendments to the VAT in Latvia by 2026: reduction of rates and new restrictions

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From 2026, substantial changes in the system of value added tax will enter into force in Latvia. The state again lowers the VAT for individual categories and tightens the rules of administration. The approach becomes more accurate. Lies receive priority areas. Formal schemes are closed.

Let's analyze all the key changes in a simple and understandable language.

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Why Latvia will change the NDS rules by 2026

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Decisions are taken within the framework of the tax policy of Latvia and the general European needs of the European Union.

The main reasons:
• Budgeting
• growth of the tin economy
• Inflation
• the need for support of individual industries
• Unification with EU standards

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Official sources:
https://www.vid.gov.lv
https://finance.ec.europa.eu

The purpose of the changes is simple. Deal with the system fairly and transparently.

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What VAT rates will be in effect until 2026

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At the moment of reform, the following are applied:
• standard rate of 21 percent
• reduced rate of 12 percent
• separate special modes

This system has shown weak points. Lies were often used formally. Control is flawed.

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Reduction of NDS by 2026 for individual categories

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Condescension is introduced not for everyone.

Legitimate categories:
• main products of nutrition
• medicines and medical services
• print and digital editions
• separate utilities

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Purpose of reduction:
• Retention of price
• support for domestic housing
• reduction of social burden

In this case, the lie is applied only under strict compliance with the conditions.

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How businesses will benefit from the reduced VAT

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Advantages you will receive:
• retail trade of products
• pharmaceutical companies
• publishing houses
• basic service stands

But convenience is possible only with correct learning and accountability.

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New limits under the VAT by 2026

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At the same time, severe restrictions are introduced with the descent.

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Major changes:
• Stronger checks of parts
• control of the valve position
• Limitation of withdrawal rights
• analysis of economic sense of operations

Formal NDS for accounting without real activity is more often not accepted.

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Amendments to the calculation of the input VAT

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The calculation is conditional.

It is taught:
• reality of transactions
• business purpose
• counterparty
• Deng movement
• logic splitters

If the operation does not make economic sense, the amount is diverted.

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The severity of control with the pages of the customs service

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The control of the order is strengthened by the side of the VID.

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Used:
• automatic algorithms
• comparison of data
• analysis of banking operations
• Cross-border checks

Scabies manifest themselves sooner than earlier.

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Who will be defeated by the new NDS rules in the first place

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Increased attention:
• a company with zero VAT to pay
• business with partial returns
• Unstaffed companies
• a company with a minimum margin
• new businesses

The risk increases in the absence of logic in the figure.

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What documents become critically important

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Documentary confirmation will come to the fore.

Necessary documents:
• contracts
• accounts and acts
• confirmation of payment
• logistics and setup
• business administration
• Justification of the price

One missing document affects the total number.

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Typical business trends after 2026

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The most common parts:
• formal education
• working with problematic counterparties
• Absence of economic justification
• incorrect application of stacks
• Ignoring risk

Charges and surcharges are made systematically.

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How a business prepares for changes in the future

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Preparation reduces financial costs.

Practical Shags:
• audit NDS
• verification of counterparties
• Correction of contracts
• recheck the position
• consultation with specialists

Independent solutions often lead to overcharges.

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How the new rules of the NDS differ from the old

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Until 2026
• formal approach
• weak analysis of operations
• wide application of accounting

With 2026
• analysis of economic sense
• Limitation of accounts
• precision bearings
• high level control

The approach is considered to be constructive, not technical.

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Amendments to the VAT Code in Latvia by 2026 will create a new reality for business. Stomach reduction is considered to be under strict control. They play a game that works transparently and is ready to heal. Oshibki are becoming dangerous.

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Frequently Asked Questions

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Are the new rates applied automatically?

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No. It is necessary to comply with the conditions.

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Is it possible to protect the right to withdraw at a low margin?

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Yes. If there is an economic justification.

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Do you struggle to control a small business?

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Yes. The size of companies does not matter.

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Is it possible to get a refund of VAT in 2026?

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Yes. But with a full inspection of the operation.

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What are the risks of working with new counterparties?

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High without preliminary inspection.