E-invoicing is the exchange of invoices in an electronic format. It is a growing trend in many countries around the world as businesses seek to streamline their invoice processing and management.
From 2025, e-invoicing will be mandatory for B2B and B2G transactions in Latvia per the Pan-European Public Procurement Online (PEPPOL) framework, providing a single standard for sending and receiving e-invoices.
Suppose you are a business operating in Latvia or planning to do business in Latvia. In that case, it is essential to familiarize yourself with the new regulation and take the necessary steps to ensure compliance.
This article serves as a guide to help you become compliant. We will provide you with critical information on the current e-invoicing status, how to send compliant e-invoices, what you can do as a business to become compliant with this regulation, and more.
With that said, let’s delve in!
What are the e-invoicing rules in Latvia?
On October 12, 2021, the Latvian Cabinet revised and approved a report proposed by the Ministry of Finance on implementing an e-invoicing system.
A significant update in this report is the introduction of mandatory e-invoicing in the business-to-business (B2B) and business-to-government (B2G) segments, which is set to commence in 2025.
This means that starting from that year, businesses will be required to receive and process e-invoices in these segments.
Who needs to comply with the e-invoicing regulations in Latvia?
In Latvia, the e-invoicing regulations require different entities to comply based on the segment:
For Business-to-Government (B2G), all contracting authorities are obliged to comply with the e-invoicing regulations. This means that public contracting authorities, public service providers, and public partners, or their representatives, are required to accept e-invoices prepared and issued in electronic form following Directive 2014/55/EU.
This requirement was introduced on April 9, 2019, for institutions of direct administration and was extended to other contracting authorities and public service providers from April 18, 2020.
On the other hand, there is no mandatory requirement for B2B e-invoicing compliance in Latvia presently. Following the post-audit model, taxpayers in the B2B sector can issue and exchange invoices and other documents in any format.
However, it is essential to note that starting in 2025, Latvia also plans to implement mandatory e-invoicing in the B2B segment. This will require businesses engaging in B2B transactions to comply with the e-invoicing regulations based on the PEPPOL standard, ensuring uniformity and efficient information flow.
How to send compliant e-invoices in Latvia?
There is no single mandatory infrastructure for e-invoice exchange in Latvia. However, electronic invoices may be sent by three methods:
That said, to send compliant e-invoices in Latvia, you can follow these steps:
Step one: Determine the appropriate method
Choose one of the following methods to send your e-invoice:
- If you are a company registered in Latvia, you can use the official electronic address “e-adrese” tool, which allows communication with Latvian public administrations.
- You can utilize the city’s e-services and options if you are dealing with the Riga Municipality.
- If you have a different means of communication previously agreed upon with the specific public administration, you can use that.
Step two: Prepare the e-invoice
Ensure that your e-invoice complies with the required standards and formats. For B2G transactions, it should adhere to the European Standard on e-invoicing (EN-16931).
For B2B transactions, you have the freedom to issue and exchange invoices and other documents in any format. However, this is subject to change come 2025, when B2BS must comply with the e-invoicing regulations.
Step three: Choose a service provider or platform
Depending on the chosen method, you may need to utilize service provider solutions available on the market, like Storecove, use the central platform called eAddress, or connect with the state platform called ePakalpojumi.lv for government-related invoicing.
Step four: Authenticate your identity
If you opt for the eAddress mailbox, you will need to authenticate your identity using an eID card, eParaksts, or eParaksts Mobile (a mobile app that allows secure identification without an eID card).
Step five: Send the e-invoice
Use the selected method to transmit your e-invoice to the relevant recipient, whether it’s a public administration or a business partner.
With these simple steps, you’ll be able to send compliant e-invoices to Latvia with ease!
However, businesses and suppliers looking for more interoperability and connectivity can choose a service provider like Storecove.
Storecove is a certified electronic-invoicing solution provider, meaning B2Bs and B2Gs can use our platform to send and receive electronic-invoices.
Speak to Dan to learn how we can help you securely issue or receive invoices in your country.
Characteristics of the electronic invoice in Latvia
Electronic invoices have been introduced into Latvia as announced by the Cabinet of Ministers on 12th October 2021.
The following are some of the characteristics of e-invoicing in Latvia that you must comply with.
What e-invoice format will be required?
UBL 2.1, CII should be used for e-invoices.
Public administrations must accept electronic invoices in PEPPOL BIS billing 3.0 format from those suppliers that want to invoice electronically.
What payment data needs to be submitted?
When submitting an e-invoice, certain payment data typically needs to be included. Latvia, invoices generally entail the following information:
- The date of the invoice.
- A unique identifier for the invoice.
- The VAT identification number of the recipient or provider.
- The full name and registered address of the supplier of products or provision of services (the natural person’s name, surname, identity number, and place of permanent residence).
- The person receiving the goods or services' full name and legal address (for a natural person: name, surname, identity number, and permanent residence).
- The date of product delivery, service provision, or advance payment.
- The designation and number of goods, or the kind and number of services.
- A description of the products or services offered.
- The cost of the items or services provided (the unit price excluding tax).
- Any discounts or rebates, if not included in the unit cost.
- The VAT rates and the computed tax.
- A suitable reference to the legal basis for VAT treatment applied if not standard-rated.
- A reference to the applicable provision of the VAT Law for zero-rated supply.
- A legend such as “Triangulation Transaction — Article 141 EC Council Directive 2006/112/EC — Reverse-Charge” is used for intermediaries providing invoices in transactions using the triangular transaction simplification scheme.
What network should be used?
The PEPPOL network should be used for submitting e-invoices in Latvia, as mentioned in the published report of the Latvian Ministry of Finance. This is in preparation for setting up interoperability and connectivity between Latvia and other EU Member States.
Is there a need for a digital signature?
In Latvia, an electronic signature is not required for e-invoices.
What archiving regulations apply?
The archiving regulations require a period amounting to 5 years for goods and services and 10 years for real-estate-related invoices.
What should businesses do to comply with e-invoice regulations in Latvia?
To comply with e-invoice regulations in Latvia, businesses should take the following steps:
- Familiarize with the e-invoice regulations in Latvia, including the specific requirements and standards applicable to your business segment (B2B or B2G).
- Ensure that your e-invoices are structured and formatted according to the relevant standards.
- Identify the appropriate means of sending your e-invoices.
- Ensure that your e-invoices contain all the mandatory information required by the e-invoice regulations in Latvia.
- Establish internal controls and processes to ensure the accurate and compliant generation, transmission, and archiving of e-invoices.
- Maintain complete and accurate records of your e-invoices as applicable regulations require.
- Regularly monitor updates and changes to e-invoice regulations in Latvia.
- Consult with tax advisors, legal experts, or industry professionals with knowledge of e-invoicing regulations to ensure ongoing compliance with the latest requirements.
Takeaway: Latvia e-invoice compliance key facts
E-invoicing is a requirement in Latvia for B2Gs and B2Bs and is set to commence in 2025. This means that starting from that year, businesses will be mandated to receive and process e-invoices in all of their business and financial transactions in accordance with the Directive 2014/55/EU.
This regulation aims to increase transparency and efficiency in invoicing and impacts all contracting state and local authorities and registered legal entities in Latvia.
Your business must be prepared for this change hence ensure that you familiarize yourself with the e-invoice regulations and stay updated on any changes or updates to the rules to ensure ongoing compliance.
While getting your company ready for this change, you can partner with a service provider like Storecove to ensure interoperability and connectivity. We provide a comprehensive e-invoicing solution so companies like yours are assured of using the correct sending and receiving infrastructure e-invoicing compliant with the Latvia government’s legal requirements.
More information about E-Invoice Requirements in Latvia?