Latest changes in Latvian accounting legislation: what is important to know in 2025
In 2025, several updates in the field of accounting and financial reporting will come into force in Latvia. These changes concern both legal entities and self-employed citizens and reflect the country's progress towards digitalization, transparency and the fight against financial risks.

If you own a company in Latvia, work as a micro-entrepreneur, provide freelance services or rent a property, these changes can directly affect your accounting, taxes and reporting.

🔍 1. Mandatory electronic accounting
What has changed:
As of January 1, 2025, all legal entities and self-employed persons with an annual turnover of 25,000 euros and more must keep accounting records in electronic format, with the possibility of integration with the State Revenue Service (VID).
What does this mean:
* Use of certified accounting software
* Storage and processing of primary documents in digital format
* Ability to automatically send reports to VID
To whom it is beneficial:
Small and medium-sized enterprises — the amount of manual work and the risk of errors in the preparation of reports are reduced.

🧾 2. Expanded reporting requirements for micro enterprises
The main innovation:
Since 2025, micro-enterprises must submit a simplified annual report, even if the turnover is up to 40,000 euros.
What does the review include:
* Balance
* Profit and loss statement
* Brief explanation of the structure of income
Purpose of the innovation:
Fighting the shadow economy and increasing the transparency of small businesses.
Important: the report must be submitted no later than March 31 of the following year. Fines for late submission.

💻 3. Accounting integration with eVid
VID is gradually moving towards full digital transparency. Since 2024, a system for automatic data transfer from accounting programs to eVid (Electronic System of the State Revenue Service) has already been tested, and from 2025 it will become mandatory for many categories.

New rules:
* Monthly upload of information on invoices, shipping bills and cash transactions
* Automatic reconciliation of VAT and income tax
* Connection of payment terminals EViD — control of cash transactions

🏠 4. New rules for individuals renting out real estate
From January 1, 2025, individuals renting residential, apartment or commercial real estate are obliged to:
* Submit an income tax return within 15 days of signing the contract
* Indicate the amount of actual income (previously, reduced rent was often used)
* Keep track of all payments (including utilities if they are included in the rent)
A new requirement: when renting housing for a period of 3 months, it is necessary to conclude a written contract, registered with the VID.
🔍 The penalty for concealing income can reach 70% of the unpaid tax.

👩 ‍ 💼 5. Strengthening Accountability of Accountants and Managers
From 2025, administrative responsibility for errors in the preparation of reports and deliberate distortion of financial data will be strengthened:
* For gross accounting irregularities (falsification of documents, tax evasion) — fine up to 10,000 euros
* Not only the company is liable, but also the manager and/or accountant if their participation in the violation is proven
A register of disqualified accountants will also be introduced - specialists who have been deprived of a license for serious violations will no longer be able to keep official records.

🧮 6. Updated list of mandatory primary documents
In 2025, the VID published an updated list of primary documents that must be kept:
* Invoices and bills of lading
* Bank statements
* Cashier's checks
* Act of acceptance of work or services
* Contracts with customers and suppliers
* Payment orders
All documents must be kept for at least 5 years (previously it was 3 years), including electronic copies, which are available on request for examination by the VID.

📊 7. Current tax rates for 2025 (in relation to accounting)
Tax rate in 2025
VAT (standard) 21%
Income tax (for individuals) 20% to 20,004 euros, then 23%
Corporate income 0% before profit distribution
Micro-business 25% of turnover
Social contributions (general) 34,09%

2025 is a time of change in the field of accounting and financial reporting in Latvia. The focus is on digitalisation, transparency and improving tax discipline.
What is important to do right now:
✅ Switch to an electronic accounting system if you have not already done so

✅ Check if you meet the new reporting requirements

✅ Train accountants or change the contractor if the current one is not ready for the new requirements

✅ Conclude all contracts with customers and lessors electronically

✅ Review internal document flow procedures

Need help setting up accounting, choosing a program, or automating reporting? Write to us - we will advise, communicate, train. So that your accounting in 2025 is not a problem, but a competitive advantage.