PVN regimes — 21 / 12 / 5 / 0%

PVN (Pievienotās vērtības nodoklis — Latvian value-added tax) is governed by the Pievienotās vērtības nodokļa likums (PVN likums) and the Likums Par nodokļiem un nodevām (general tax framework). Standard rate 21%, reduced 12% (medicines, residential district heating), super-reduced 5% (fresh fruit, vegetables, berries — 2028 sunset) and zero 0%. The mandatory registration threshold is EUR 50,000 annual turnover.

History — from 1995 to 21% + 5% sunset 2028

Latvia introduced PVN at 18% in 1995, four years after independence. The major step change is 2009: during the global financial crisis, the Dombrovskis government raises the rate to 21%, one of the EU's harshest adjustments. Since then the standard rate has held at 21% — close to the EU-27 average of ~21.5%. The 5% super-reduced rate on fresh local produce, introduced in 2018, has been extended several times but officially expires on 31 December 2027.

1995       | PVN introduced at 18% (Latvia independent since 1991, joined EU 2004).
           | Legal basis: Pievienotās vērtības nodokļa likums.
           |
2009       | PVN raised 18 → 21% during the financial crisis (Dombrovskis
           | government). One of the EU's harshest adjustments at the time.
           |
2011-2012  | Temporary bump to 22%, then back to 21%. Stabilisation.
           |
2018       | Introduction of the 5% super-reduced rate on fresh fruit,
           | vegetables and berries — support measure for local producers,
           | initially temporary.
           |
2020-2022  | Successive 5% extensions via MK noteikumi and PVN likums
           | amendments (Latvijas Vēstnesis).
           |
2023       | Stabilisation: 21% standard, 12% medicines + thermal energy,
           | 5% fresh food, 0% specific cases.
           |
2024-2025  | Confirmation of the 5% sunset on 31 December 2027 — return
           | to 21% on fresh produce from 1 Jan 2028 unless extended.
           |
2026-2028  | ViDA alignment prep: transactional reporting, gradual phase-out
           | of recap statements (sales lists).

Governance — Finanšu ministrija + VID

Rates and exemptions are set in PVN likums, voted by the Saeima (Latvian parliament) on Finanšu ministrija's proposal. Application details (MK noteikumi) are published by the Council of Ministers in Latvijas Vēstnesis. Collection, audit and litigation fall to VID (Valsts ieņēmumu dienests). Every PVN return goes through EDS (Elektroniskās deklarēšanas sistēma).

Rate schema — 21 / 12 / 5 / 0%

# Latvian PVN regimes — overview (2026)

21%    Standard (PVN standarta likme)
       — PVN likums art. 41(1)
       — All transactions unless explicit exception
       — Aligned with EU-27 average (~21.5%)

12%    Reduced (samazinātā likme)
       — Human + veterinary medicines (PVN likums art. 41(2)(1))
       — Thermal energy (residential district heating)
       — Tourist accommodation
       — School textbooks, children's books

5%     Super-reduced (īpaši samazinātā likme)
       — Fresh fruit, vegetables and berries grown in Latvia
       — Sunset: 31 December 2027 unless MK noteikumi extension
       — Agricultural sector support measure

0%     Zero (nulles likme)
       — Exports to third countries
       — Intra-EU B2B supplies with VIES-valid VAT number
       — International transport
       — Marine + aviation fuelling

Exempt without deduction
       — Medical, education, financial, insurance services
       — Residential rent, gambling

Comparison — Latvia vs Estonia / Lithuania

Adoption — thresholds and MOSS / OSS

• Mandatory registration threshold: EUR 50,000 taxable annual turnover under PVN likums. Free registration via EDS.
• OSS / IOSS: Latvia applies the EU OSS regime since 1 July 2021 for cross-border distance sales. VID OSS portal integrated into EDS.
• PVN receipts: ~EUR 3.8B in 2024 per CSP — about 30% of total Latvian tax revenue.
• VAT Gap: ~9% in 2023 per the European Commission — consistently improving since 2018 thanks to EDS + eRēķins. SAF-T-LV prep 2027-2028 to push the gap below 6%.

Common pitfalls

• Applying 5% to processed products. The super-reduced rate only covers fresh, unprocessed products. Canned, pasteurised or stewed goods move to 21%. VID regularly reassesses this.
• Forgetting the local origin condition. 5% applies to fresh products grown in Latvia or the EU — third-country imports fall under 21%. Code this in the ERP via origin code.
• Assuming 12% covers all medicines. Only registered human and veterinary medicines get 12%. Food supplements, cosmetics, medical devices = 21%.
• Confusing exempt and 0%. 0% grants input PVN deduction. Exempt-without-deduction (medical, financial, education services) blocks deduction. Mixing the two breaks the EDS return.
• Malformed VAT number. LV + 11 digits (vienotais reģistrācijas numurs). If VIES rejects, check the prefix and the leading zero — the number can start with 0.

Cross-links

• Latvia hub — full view
• VID — tax authority + EDS
• Uzņēmumu reģistrs — company identifiers
• eRēķins B2G 2025
• ViDA + ENA — 2028 roadmap
• Likumi.lv — PVN likums (official text)
• VID — PVN portal
• Latvijas Vēstnesis — official gazette