Over 4,200 transport and logistics companies operate in Latvia, and the sector accounts for roughly 9% of GDP — a disproportionately large share for a country of under two million people. Geography explains part of it: Latvia sits at the crossroads of EU trade corridors, with Rīga's port handling 20 million tonnes of cargo annually and Latvian trucks covering routes from Lisbon to Moscow. What geography does not explain is why so many of these companies struggle with accounting structures designed for stationary businesses.

Transport accounting has its own logic. Costs are measured in kilometers and liters, not just euros. Assets lose value at rates determined by road quality and load weight, not straight-line assumptions. And your workforce is physically in a different country every 48 hours.

Fuel Costs: The Largest Variable Expense

Fuel typically represents 25–35% of a transport company's total operating costs. For a fleet of 20 trucks covering international routes, that can mean EUR 400,000–700,000 annually. The accounting treatment matters enormously.

Fuel cards vs. cash purchases. Most Latvian transport companies use fuel cards (DKV, UTA, Euroshell). The card provider issues a consolidated invoice — usually bi-weekly or monthly — covering fuel purchases across multiple countries. This creates two accounting challenges:

Multi-currency conversion. Fuel purchased in Poland (PLN), Hungary (HUF), or the Czech Republic (CZK) must be converted to EUR. The card provider's exchange rate rarely matches the ECB reference rate. The difference is an exchange rate gain or loss in your accounts.
VAT recovery across borders. Fuel purchased in other EU countries includes local VAT (19% in Germany, 23% in Poland, 27% in Hungary). Latvian companies can reclaim this foreign VAT through the EU VAT refund directive — but the process requires filing refund applications in each country where fuel was purchased, typically by September 30 of the following year. Many Latvian transport companies leave thousands of euros unclaimed simply because the paperwork seems burdensome.

Fuel consumption norms. VID expects transport companies to establish fuel consumption norms per vehicle — typically expressed as liters per 100 km, adjusted for loaded vs. empty runs, season (winter consumption is 10–15% higher), and terrain. If actual consumption significantly exceeds the norm without explanation (vehicle malfunction, detours), VID may disallow the excess as a non-deductible expense.

Documentation requirements: For each trip, maintain a CMR consignment note, a route sheet (maršruta lapa) showing departure and arrival points, kilometers driven, and fuel filled. GPS/telematics data strengthens your position during audits but is not legally required as primary documentation.

Vehicle Depreciation and Fleet Management

A new Scania R450 long-haul truck costs approximately EUR 110,000–130,000. How you depreciate it affects your financial statements and tax position for years.

Latvian tax depreciation rules classify vehicles into Category 3 of fixed assets, with a maximum annual tax depreciation rate of 20% using the declining balance method. This means:

Year 1: EUR 120,000 × 20% = EUR 24,000
Year 2: EUR 96,000 × 20% = EUR 19,200
Year 3: EUR 76,800 × 20% = EUR 15,360
And so on.

Accounting depreciation can differ from tax depreciation. Many transport companies use straight-line depreciation over 5–7 years for accounting purposes, reflecting the actual expected useful life of the vehicle. The difference between accounting and tax depreciation creates a deferred tax position.

Trailers and semi-trailers are separate fixed assets, depreciated independently from the tractor unit. A new Schmitz Cargobull trailer costs EUR 25,000–40,000 and is typically depreciated over 7–10 years.

Leasing vs. buying. Most fleet acquisitions in Latvia are financed through financial leasing (capital lease). Under Latvian GAAP:

Financial leases: the vehicle is recorded as an asset on your balance sheet, with the lease obligation as a liability. You depreciate the asset and recognize interest expense on the liability.
Operating leases: the monthly payment is a period expense. The vehicle does not appear on your balance sheet. Less common for trucks, more common for company cars.

Vehicle disposal. When selling a used truck, the gain or loss is the difference between the sale price and the book value. If you sell a truck with a book value of EUR 35,000 for EUR 42,000, you have a EUR 7,000 taxable gain. If you sell it for EUR 28,000, you have a EUR 7,000 deductible loss — but only if the sale price is at arm's length. Selling to a related party at below-market value will trigger VID scrutiny.

International Routes: Per Diems and Posted Workers

Latvian truck drivers on international routes are entitled to daily allowances (komandējuma dienas nauda). The rates depend on the destination country and are set by Cabinet Regulation No. 969.

Per diem rates (selected countries, 2026):

Germany: EUR 66/day
France: EUR 65/day
Poland: EUR 42/day
Lithuania: EUR 45/day
Sweden: EUR 72/day

These amounts are tax-free for the employee and deductible for the company. Amounts paid above the official rates are taxable as employment income.

The posted workers complication. Under the EU Posted Workers Directive, drivers operating in another EU country for extended periods are subject to that country's minimum wage and employment conditions. France's Loi Macron and Germany's MiLoG require:

Pre-registration of each driver before entering the country.
Payment of the local minimum wage for hours worked in that country (Germany: EUR 12.82/hour in 2026; France: EUR 11.88/hour).
Retention of payslips and employment contracts in the local language, available for roadside inspection.

The accounting impact: you must track hours worked per country, calculate wage supplements where the Latvian salary falls below the local minimum, and maintain country-by-country payroll records. Non-compliance results in fines of EUR 1,500–10,000 per violation in Germany and up to EUR 4,000 per violation in France.

Road Taxes, Tolls, and Vignettes

Transport companies operating across Europe face a patchwork of road charges:

Country-specific systems:

Germany (Maut): distance-based toll for vehicles over 7.5 tonnes. Rates vary by emission class and number of axles. Average: EUR 0.15–0.19/km. Annual cost per truck: EUR 8,000–15,000.
Poland (e-TOLL): distance-based, EUR 0.05–0.12/km depending on road category and vehicle emission class.
Austria (GO-Maut): distance-based, OBU required.
Baltic states: Latvia, Lithuania, and Estonia use vignette systems. Latvia's vignette for vehicles over 12 tonnes: EUR 750/year for EURO VI.

Accounting treatment: Road tolls and vignettes are operating expenses, fully deductible. Multi-year vignettes (some countries offer 12-month or multi-year options) are prepaid expenses, amortized over the validity period.

VAT on tolls: Some toll systems include VAT (Germany, Austria), which can be reclaimed. Others do not charge VAT (some vignette systems). Check each country's rules — this is a frequent area of missed recoveries.

Tachograph Compliance and Record-Keeping

Digital tachographs are mandatory for all commercial vehicles over 3.5 tonnes. The accounting connection is less obvious but important:

Tachograph data validates driver hours and, by extension, payroll calculations. If your payroll records show a driver working 8-hour days but the tachograph shows 10-hour driving periods, VID and the State Labor Inspectorate will notice the discrepancy.
Data retention: Tachograph data must be downloaded from the vehicle unit every 90 days and from driver cards every 28 days. Records must be retained for at least 12 months (EU regulation) but practically 3–5 years to align with Latvian accounting retention requirements.
Rest period violations result in fines and, in extreme cases, vehicle impoundment. The financial exposure can reach EUR 3,000–8,000 per incident in Western European countries. These fines are generally not tax-deductible.

Transport-Specific VAT Issues

Fuel VAT recovery is covered above, but transport companies face additional VAT complexity:

International transport services (goods transport with departure or destination outside Latvia) are typically zero-rated or exempt, depending on the route. Intra-community transport of goods is taxable in the country where transport begins, but the reverse charge mechanism often applies.
Cabotage operations (domestic transport within another EU country by a foreign carrier) may trigger VAT registration obligations in that country if they become regular rather than occasional.
Vehicle repairs performed abroad are subject to the reverse charge if the repair provider is in another EU country — the Latvian company self-assesses VAT.

Cost Structure of a Typical Latvian Transport Company

For a fleet of 20 trucks generating EUR 3 million in annual revenue:

Fuel: EUR 750,000–1,050,000 (25–35%)
Driver salaries and social contributions: EUR 600,000–750,000 (20–25%)
Vehicle depreciation/leasing: EUR 300,000–450,000 (10–15%)
Road tolls and vignettes: EUR 150,000–250,000 (5–8%)
Insurance (OCTA, KASKO, CMR): EUR 90,000–150,000 (3–5%)
Maintenance and repairs: EUR 120,000–180,000 (4–6%)
Administration and overhead: EUR 90,000–150,000 (3–5%)

Margins in Latvian international transport typically run 3–8%. At these margins, accounting precision is not a luxury — a 2% error in fuel allocation or a missed VAT recovery claim can eliminate profitability on an entire route.

If your transport company needs accounting that speaks in kilometers and CMR notes rather than just debits and credits, contact our team.

Accounting for Transport and Logistics Companies in Latvia