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.

The payment of stamp duty is an unavoidable part of the process, if not a mandatory prerequisite for the initiation of proceedings. The amount of the duties is regulated by the Civil Procedure Law (hereinafter – “CPL”) and depends on the amount of the claim. Often, the amount of stamp duty has deterred potential claimants from filing a lawsuit. In addition, legal entities were previously not allowed to apply to the court for a reduction or deferral of the payment of stamp duty, which meant, for example, that a company in financial difficulties could not adequately defend its rights in court.

The amendments, which came into force on 1 April 2025, were aimed at implementing several rulings of the Constitutional Court. They mainly concern the calculation and determination of stamp duties and grant private legal entities the right to apply for exemption from court costs and bail and deferral of court cost payments. This article focuses more on the changes related to the determination and payment of stamp duties. These changes have significantly changed and clarified both the amount of the fees and the calculation procedure. Almost nothing remains of the previous provisions on the amount of fees and the calculation procedure, which were contained in section 34 of the previous CPL.

SAFE (Security Action for Europe) is a European Union financial instrument established to provide financial assistance to Member States, enabling them to undertake urgent and substantial public investments in support of the European defence industry. It forms part of the EU’s broader response to the markedly deteriorated security environment in Europe and is designed to reinforce the European Defence Technological and Industrial Base (EDTIB). SAFE aims to promote joint procurement, boost defence production capacity, and reduce strategic dependencies on external suppliers. It will make available up to EUR 150 billion in low-cost, long-term loans, aligned with Member States’ national defence investment plans.

The instrument entered into force on 29 May 2025, and includes a provision for value added tax (VAT) exemptions on contracts concluded under its framework. Read more in this article.

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.

The European Union is about to embark on one of the most significant modernisations of the value-added tax (VAT) system since the introduction of the VAT Directive. The driving force behind these changes is the “VAT in the Digital Age” (ViDA) legislative package, which will have a profound impact on the business environment across the EU. In response to this crucial legislative phase, the EU VAT Committee convened an extraordinary 126^th meeting on 21 March 2025 to provide clarification and guidance to Member States on the practical implementation of the planned reforms, particularly regarding e-invoicing and digital reporting.

It is important for finance professionals — accountants, finance directors and company directors — to understand the conclusions of this meeting and their implications for the regulatory framework. This article provides a detailed analysis of the key legal aspects, the policy directions and the necessary actions that businesses need to take to ensure compliance and maintain their competitiveness.

Good things are worth waiting for. This could be said about the new amendments to Latvian transfer pricing regulations, which this time are especially favourable for taxpayers (hereinafter – “TP”). Changes have come into force that allow local transfer pricing documentation to be prepared in English. This article covers the new changes, the details of their application and possible challenges. 

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. 

The European Union has launched its most comprehensive VAT reform to date with the initiative “VAT in the Digital Age” (“ViDA”), marking a turning point in both tax administration and business operations across the EU. ViDA has three main goals: 1) to reduce VAT fraud, 2) to improve the efficiency of tax administration, and 3) to adapt the existing VAT system to the digital economy. One of the cornerstones of this initiative is the introduction of structured e-invoices and digital transaction reporting for cross-border transactions.

Although ViDA will officially come into force gradually, starting in 2028, businesses engaged in cross-border B2B transactions must already prepare for significant changes. The impact of the Directive will be felt far beyond VAT reporting — it will affect financial processes, IT infrastructure, data management, and the overall corporate compliance strategy. This article explores how ViDA will change the rules of the game, the main obligations and risks for businesses, and why it is essential not to wait until the last minute to start preparations.