VAT threshold will be raised to 50,000 euros in Latvia

The Latvian cabinet approved draft measures October 9 that will see the threshold at which companies must be registered for Value Added Tax (VAT, or PVN in Latvian) rising from 40,000 euros to 50,000 euros. The move is a response to high inflation which has seen prices and therefore turnover rising, forcing more and more businesses towards the existing 40,000 euro threshold.

"Raising the VAT registration threshold to EUR 50,000 will reduce the effects of inflation specifically for small businesses," said the Ministry of Finance.

In addition the draft law proposes not levying VAT at all on some services such as sports coaching and educational camps for children. It was also decided to review the VAT regulationapplying to the Corporate Income Tax Law regarding legitimate expenses for company cars.

The bill is included in the package of accompanying bills of the bill "On the state budget for 2024 and the budget framework for 2024, 2025 and 2026", which enters into force on January 1, 2024, subject to approval by the Saeima.


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