Effective from 11 January 2024, the Ministry of Finance has amended the Cabinet of Ministers’ Rule No. 1507 of 17 December 2013, ‘The procedure for refunding VAT to a taxable person registered in a third country or territory’, and Rule No. 1514 of 17 December 2013, ‘The procedure for filing a registered taxable person’s VAT refund claim in another EU member state and the procedure for refunding VAT to a taxable person registered in another EU member state’.

The amendments apply in particular to EU and non-EU registered taxable persons that are not established in Latvia but acquire services related to real estate (RE) and claim a VAT refund because the services are acquired to make supplies that attract Latvian reverse-charge VAT.

On 21 December 2023 the Court of Justice of the European Union (CJEU) passed ruling C-288/22 on whether a public limited company’s board members are taxable persons for VAT purposes. This ruling is important because it explains what criteria must be met if a person is to be treated as carrying out an economic activity that forms the basis for paying VAT and what factors should be considered to determine whether someone is an independent taxable person.

In its ruling C26128713, SKC-201/2019 of 28 June 2019, the Supreme Court took a different view on the VAT Act’s condition that the taxable amount should include only taxes payable in relation to a supply of services. The dispute involved a forced lease of land that stipulated a rent plus a compensation of real estate tax (RET). The Supreme Court was assessing whether VAT should be charged on the compensation. First of all, the assessment focused on what items attract RET and who is liable to pay it.