On 5 June 2025, the Parliament of the Republic of Latvia (Saeima) adopted amendments to the Accounting Law, which provide for the mandatory use of structured electronic invoices between companies, with the exception of budgetary institutions, to be postponed until 1 January 2028. The Saeima’s decision to postpone the date reflects the country’s adaptation to the challenges of digital transformation and gives companies, especially small and medium-sized enterprises, additional time to fully prepare for system adaptation and process modernisation.

The European Commission (EC) has amended the rules on state aid to improve public access to legal proceedings on environmental issues. These changes allow environmental non-governmental organisations (NGOs) to challenge EC decisions approving state aid where there is a suspicion of breaches of EU environmental law. This is a significant change because, for the first time, environmental NGOs can formally request the European Commission to review such decisions, particularly where there are concerns about compliance with EU environmental rules.

Historically, transfer pricing in the Latvian market was usually considered from a compliance perspective. The focus has been on preparing adequate transfer pricing documentation to demonstrate that the transfer prices applied are at arm’s length (market price) and making adjustments where necessary. However, there is an increasing trend for companies to develop transfer pricing policies as strategic tools that contribute not only to compliance but also to risk management and business planning.

A recent Baltic human capital and work environment survey reveals that Latvian organisations have a limited and fragmented approach to diversity and inclusion (D&I) matters. Employers acknowledge that attracting, retaining, and effectively managing human resources, as well as fostering innovation and a positive work environment, are critically important for ensuring long-term growth. However, only 19% of surveyed employers have developed a strategy to address human capital issues. An overwhelming 94% of employees across the Baltics consider an inclusive work environment a crucial factor when choosing an employer, but just 16% of employers in Latvia are actively working to foster inclusion and manage diversity in the workplace. 

Internet portal serves as a company’s business card, making it essential to ensure uninterrupted access to information and seamless communication. To guarantee maximum availability and optimal performance, AI-driven website monitoring is employed. This enables businesses to track the performance of their websites and online services, identify issues early, and proactively resolve them before they impact users.

Variable pay is an essential tool that companies use to motivate employees, achieve business goals, and foster a results-oriented culture. It is becoming increasingly popular in Latvia and the Baltics, where companies are seeking flexible ways to respond to market changes while also retaining top talent. 

An employee’s absence from work can be grounds for termination of the employment contract. But what happens if the employer has not specified a particular place of work? Could this affect the termination? The case law (20 May 2025) provides answers that help clarify the nuances of the dismissal process in such a case.

In preparation for the mandatory introduction of electronic invoices from 2026 or 2027, there is growing interest in Latvia both in the role of e-invoice operators and in the corresponding legal framework in the Republic of Latvia (RoL). Although the legal framework is still inconsistent, companies need to be able to assess service providers’ offerings and technical compliance today to prepare for the changes in time. This article deals with issues related to e-invoice operators in the RoL and selecting a suitable cooperation partner.

On 21 May 2025, the Ministry of Smart Administration and Regional Development (VARAM) published an information report entitled “On the progress of the introduction of structured electronic invoicing”. The report proposes to postpone the mandatory introduction of electronic invoicing in business-to-business (B2B) transactions from 1 January 2026 to 1 January 2027, while allowing voluntary use from March 2026. These changes are justified by several critical factors, including technical readiness, a lack of digital skills and insufficient preparation time.

State support for companies is often associated with direct subsidies, grants, or tax reliefs. However, a state or municipal investment in a company's share capital, which may take the form of acquiring shares or stocks, in-kind contributions (such as the transfer of real estate or equipment), or recapitalisation, also constitutes a form of state aid. It is important to remember that any public investment in a company’s share capital, if it meets the criteria set out in Article 107 of the Treaty on the Functioning of the European Union (TFEU), is considered state aid and is subject to EU regulation. This is a grave error that Member States occasionally make, as they fail to recognise that any such investment must be assessed against these criteria, which may otherwise result in the granting of unlawful state aid. 

In today’s world, innovation has become a critical component of competitiveness and economic growth. Companies and individuals around the world are looking for new solutions in the hope that the market will recognise and demand them. Innovation usually means the introduction of new ideas, methods or products that promote growth and competitiveness by improving processes, services or technologies. However, when pursuing progress, it is important to assess whether innovations will truly improve society as a whole and whether the benefits they offer are accessible to everyone. Specifically, will innovations be inclusive? In this article, we will explore the link between social innovation and social justice, or how innovation can help reduce social exclusion, provide accessible solutions for all and promote long-term positive change in society.

NIS2 (Network and Information Security Directive) is a European Union (EU) directive aimed at strengthening cybersecurity across the EU, particularly concerning critical infrastructure and essential services. In Latvia, this directive has been transposed into national legislation by the adoption of the National Cybersecurity Law (NCL). Right now, companies should have clarity about their status (whether NCL subject or not) and should have registered by 1 April 2025, at the National Cybersecurity Centre (NCC). Organisations are due to appoint a cybersecurity manager and submit their first self-assessment report by 1 October 2025 and begin reporting cybersecurity incidents from 1 July this year. 

In commercial transactions, there may be cases when a buyer, upon discovering defects in the purchased goods, wishes to cancel the contract or claim damages. However, not every defect identified by the buyer is necessarily considered a legitimate defect. Furthermore, it must be noted that the buyer (the business) is required to take certain actions in order to retain the right to compensation for damages or contract cancellation when defects in the goods are properly identified. This article casts more light on this. 

In Latvia, there is frequent talk of progress in gender equality, yet the reality is harsher. Latvia ranks last in the European Union for gender pay equality, and the gap between men’s and women’s wages is unfortunately growing. While the EU’s average gender pay gap in 2023 was 12%, in Latvia this figure reached 19%, worsening the country’s position (17.1% in 2022) and placing it last among all 27 Member States. In other words, for every euro earned by a man in Latvia, a woman earns only 81 cents.

Digital transformation in both the public and private sectors is rapidly advancing, with one of its central elements being the digitisation of document circulation. On 17 April 2025, the Ministry of Finance (“MoF”) submitted proposed amendments to the Value Added Tax (“VAT”) Law for public consultation, aiming to align it with the requirements set out in the Accounting Law regarding the issuance of structured electronic invoices, or e-invoices. These changes represent a significant step toward a fully digital and efficient accounting and tax administration system in Latvia.