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.
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.
The tax authority has once again raised the issue of authentication procedures in the State Revenue Service’s (“SRS”) Electronic Declaration System (“EDS”), in line with national information system security policies and digital transformation guidelines.
This article discusses the proposed amendments to the Cabinet Regulation No. 7 “Regulations on the State Revenue Service’s Electronic Declaration System” of 9 January 2024 (“Cabinet Regulation No. 7”).
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.
In practice, there are cases where businesses located in different countries, having agreed to apply the laws of the Republic of Latvia (“RoL”) to a contract, are unaware or forget that not only the provisions of the Civil Law or the Commercial Law may apply, but also the United Nations Convention on Contracts for the International Sale of Goods (“Convention”), unless the contracting parties have excluded its application.
In this article, we look at the circumstances under which the Convention is applicable and how it can impact claims for damages.
In practice, the application of VAT to hire-purchase transactions (lease/finance lease) still leads to confusion, as a recent ruling by the Senate suggests (the ruling of 6 December 2024 in case A420225819, SKA-38/2024).
Intra-group financing transactions are a way for corporate groups to promote efficient capital allocation, stimulate development and provide more flexibility and control over financial resources than external financing. However, as with all other intra-group business transactions, transfer pricing risks should not be forgotten in financing transactions.
This article discusses an important but sometimes overlooked comparability factor to consider in cross-border financing transactions with related parties: the sovereign risk premium.
The topic of annual tax returns becomes a hot one in the public eye between late February and mid-March in Latvia. Whereas the State Revenue Service (SRS) works to strengthen its IT systems by implementing queues to ensure a smooth operation of its Electronic Declaration System on the first day of tax return submissions. Some taxpayers dive into the “lottery” as early as the end of February, while others either do not bother or are not in a rush to file their returns. Is it true that the outcome of filing an annual tax return depends on a person's luck or astrological sign?
On 17 October 2024, the Sustainability Disclosure Act (“ŠDA” or “Law”) came into force, which sets out the framework for sustainability reporting and adopts the provisions of the European Corporate Sustainability Reporting Directive (“CSRD”). The law aims to provide publicly available and comparable information on the impact of the activities of legal entities on sustainability aspects, including environmental protection, social rights, human rights and aspects of corporate governance, including anti-corruption and anti-bribery, as well as information on how these issues affect the development, performance and condition of legal entities. This information should be included in the sustainability report.
As of 1 January 2025, verification documents (invoices) will be created in a structured electronic invoice or e-invoice format for settlements with state and municipal institutions. Such an electronic invoice may contain trade secrets and certain procedures must be followed to ensure their protection. How can I protect trade secrets in electronic invoicing?
In everyday life, companies have to use an option such as borrowing money for various specific purposes. A significant increase in debt can present the company with challenges that impact balance sheet performance and potential tax risks.
One solution to the problem of increasing debt can be to capitalise the loan – a process whereby the creditor invests its debt rights as a financial asset in the borrower's equity.
This article describes the nature of the loan transaction and its capitalisation with practical examples of possible situations dealing with both corporate income tax (CIT) and transfer pricing (TP) aspects.
