VAT Rates in Latvia 2026: 21%, 12%, 5%, 0% Quick Reference

Latvia's PVN system operates on four rate tiers — a structure that has remained stable for years but gains a new wrinkle in 2026 with the food pilot program and the partial migration from 12% to 13% in select categories. Here is every rate, what it covers, and what changed.

The Four Tiers at a Glance

| Rate | Applies to | Key changes in 2026 | |------|-----------|---------------------| | 21% | Most goods and services: consulting, IT, retail, restaurants, professional services, electronics | No change | | 12% | Pharmaceuticals, medical devices, heating energy, public transport, hotel accommodation, food (pilot from July 2026) | Food pilot program adds qualifying staple products; some categories transitioning to 13% | | 5% | Local press, books (print and digital), baby food, certain pharmaceuticals | No change | | 0% | Exports outside EU, intra-Community supplies to VAT-registered EU businesses | No change |

What Each Rate Means in Practice

21% — the default. If a product or service is not explicitly listed under a lower rate, it falls here. This is where most businesses operate. A Latvian SIA providing software development, marketing consultancy, or legal advice charges 21% PVN on domestic invoices.

12% — the reduced rate with 2026 complications. The headline addition: selected food products qualify for 12% starting July 1, 2026 (fresh meat, fish, dairy, eggs, bread, fruits, vegetables, cereals, vegetable oils). Meanwhile, some historically 12% categories are migrating to 13% through regulatory amendments still being finalized. Check specific NACE and CN codes before invoicing. Details in our food VAT article.

5% — the super-reduced rate. Applies to a narrow list of socially significant goods. Misapplying 5% when 21% is correct creates immediate tax liability. VID does not treat rate misclassification leniently.

0% — zero-rated, not exempt. Critical distinction: zero-rated transactions are still taxable supplies. You report them in your PVN declaration, and you retain full input VAT deduction rights. This is why exporting businesses benefit enormously from PVN registration — 0% on sales, full recovery on costs.

(A note on exemptions: certain activities — financial services, insurance, education, healthcare — are VAT-exempt, which is different from zero-rated. Exempt activities do not generate output VAT and do not allow input VAT deduction. This is a worse position than zero-rating.)

Practical Tip

When in doubt about which rate applies to a specific product or service, request a binding ruling from VID before issuing invoices. Correcting rates retroactively — through amendment invoices, corrective declarations, and potential client disputes — costs far more than a proactive classification exercise.

For the complete VAT picture in Latvia, see our comprehensive PVN guide.

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Wrong Rate on an Invoice? It Costs More Than You Think.

Applying 21% when 12% applies means your customers overpay. Applying 12% when 21% is correct means you owe VID the difference plus interest. We verify PVN rate classification across your entire product and service catalog to ensure every invoice is correct.

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