Briefing document: Mandatory E-Invoicing and E-Reporting in Latvia as of Jan 1, 2026

Scope of mandate: Latvia’s e-invoicing requirements will cover nearly all domestic transactions between businesses and the public sector and between businesses themselves, in a phased manner. Key points:

• B2G (Business-to-Government) – Mandatory from 1 January 2025 for all invoices issued by Latvian-registered companies to Latvian public authorities (state or municipal budget institutions)[1][2]. This applies to any transaction with a government entity, not just public procurement contracts[1]. (Public institutions have been required to accept e-invoices since 2019 under EU Directive 2014/55/EU[3].) Notably, government entities must also send e-invoices for their own bills (G2B and G2G), with full adoption by 2026[4][5]. If a contract with a public entity was concluded before 31 Dec 2024, the e-invoice obligation could be deferred until 1 Jan 2026 as a transition[3]. By 2026, all invoices involving public sector (business ↔ government in either direction) must be electronic.
• B2B (Business-to-Business) – Mandatory from 1 January 2028 for all invoices between Latvian-registered businesses[2][3]. Originally the law had set this for 1 Jan 2026, but a two-year postponement to 2028 was passed on 5 June 2025 to give companies (especially small businesses, self-employed, NGOs) more time to prepare[2][2]. During 2026–2027, use of e-invoices in B2B is voluntary (encouraged) so that businesses can adapt before it becomes compulsory[4][5]. From 2028, all companies registered in Latvia must use structured e-invoices for domestic B2B sales of goods and services, with few exceptions (see below)[2][3].
• B2C (Business-to-Consumer) – There is no mandate for B2C invoices. Invoices issued to private individuals can continue in paper or standard electronic format (unless voluntarily using e-invoices). Latvia has not extended mandatory e-invoicing to consumer transactions[3][3].
• Cross-border transactions – Not yet in scope. The Latvian mandate focuses on domestic transactions. Invoices to or from foreign business partners are not required to be in the Latvian e-invoice system at this stage[1][1]. (Notably, the authorities indicated that purely local VAT registrations of foreign firms will be outside the initial scope[1].) Cross-border digital reporting will likely be addressed later in line with EU-wide plans (the EU “VAT in the Digital Age” reforms, which will require intra-EU e-invoicing by the end of the decade)[5], but currently Latvia imposes no national e-invoicing or e-reporting requirement on cross-border B2B/B2C trades.

Taxable persons in scope: All companies and taxable persons registered in Latvia are subject to these mandates once effective[2]. This includes corporations, small businesses and self-employed persons that issue invoices, as well as public institutions for their outgoing invoices[2][4]. In practice, any entity that is obliged to issue invoices under the VAT or accounting laws must comply (no specific turnover threshold is applied). Foreign businesses without a Latvian establishment are generally not required to follow the e-invoice mandate for their Latvian transactions (unless they choose to, or if a Latvian trading partner insists). Public sector bodies themselves must use e-invoices when transacting with each other and with businesses (by 2025–2026)[5]. Certain exemptions are provided in law for specific cases: for example, transactions recorded by cash register receipts (e.g. retail sales) or invoices generated by particular government systems (like health services or national security agencies) are excluded from the e-invoicing requirement[6][3].

Implementation timeline: Latvia is rolling out e-invoicing in phases, with accompanying legal changes and technical preparations:

• April 2019: As an EU member, Latvia required that all contracting authorities can receive e-invoices according to the European standard (EN 16931) from this date (transposing Directive 2014/55/EU)[3].
• 31 Oct 2024: The Saeima (Parliament) approved initial Accounting Law amendments introducing mandatory e-invoicing: making B2G compulsory from 2025 and B2B from 2026[3].
• 1 January 2025: Phase 1 – B2G goes live. E-invoices became compulsory for all B2G transactions (suppliers must send structured e-invoices to state and municipal institutions)[1][3]. Also from this date, public entities should exchange invoices electronically among themselves (G2G)[3]. In practice, 2025 served as a kick-off year focused on the public sector. (Contracts predating 2025 got a grace period until end of 2025 as noted.)
• Early 2025: Government bodies and the State Revenue Service (VID) were tasked with developing detailed rules. The State Revenue Service (VID) was expected to issue technical regulations by mid-2025 (initially by July 1, 2025) to define how e-invoices must be reported to tax authorities[1]. (This process was delayed due to the timeline change, see below.)
• 5 June 2025: In response to stakeholder readiness concerns, Parliament adopted further amendments to the Accounting Law delaying the B2B mandate. The planned B2B mandate was officially postponed from 1 Jan 2026 to 1 Jan 2028[2]. This also deferred the start of mandatory e-invoice data reporting to the tax authority until 2028[7]. The revised plan introduced a longer transition and a phased approach to implementation.
• Late 2025: Authorities aim to publish updated guidelines and technical specifications. By end of 2025, the Ministry of Finance and VID are expected to provide guidance for generating and exchanging e-invoices under the new system[8]. (Draft regulations were opened to public consultation in June 2025[8].)
• 1 January 2026: Phase 2 – Public sector reporting and voluntary B2B: While B2B is not yet mandatory, e-invoicing becomes fully operational for all government-related transactions. Critically, as of 2026 any e-invoices involving a public institution (B2G or G2G or even G2B) must now also be reported to the State Revenue Service (VID) in the central system[5]. This marks the start of electronic reporting (“e-reporting”) for those invoices. In addition, starting 2026 businesses may begin using the e-invoicing system for B2B on a voluntary basis[4][5]. The official government e-invoice platform (the eAddress portal on Latvija.lv) will open for B2B invoice exchange as of March 30, 2026 (the voluntary launch date)[7]. This two-year voluntary period (2026–2027) allows companies to test and adapt their invoicing systems ahead of the mandate.
• Throughout 2026–2027: Development of the central platform continues. The government will make improvements to the eAddress service to better support high volumes of B2B invoices and ensure smooth integration by 2028[7]. Companies are expected to prepare their IT systems, integrate with service providers or the portal, and possibly pilot sending e-invoices so that by the end of 2027 many will already be compliant.
• 1 January 2028: Phase 3 – Full mandate: Mandatory B2B e-invoicing and e-reporting begins[2][5]. From this date, all invoices between Latvian-registered businesses must be issued in electronic structured format, and all such invoice data must be submitted to the State Revenue Service in near real-time. This is the final step to a comprehensive e-invoicing regime covering B2B, in addition to the already-mandatory B2G. Starting 2028, the Latvian tax authority will receive invoice data for all domestic B2B and B2G transactions for VAT control purposes[8]. (Further, as part of the same phase, any remaining G2B invoices from government to businesses would also be subject to reporting if not already.)
• Future outlook: These national measures position Latvia for upcoming EU-wide digital reporting requirements. The country’s timeline aligns such that by 2028 it will meet the likely EU standards for transactional VAT reporting. Latvia’s approach mirrors trends in other EU countries (Italy, France, Poland, etc.) moving toward continuous transaction controls[8][5]. There is no indication of additional phases beyond 2028; rather, the focus will be on fine-tuning the system and integrating with the EU’s central VIES reporting once that becomes necessary.

Data and reporting requirements: Under the e-invoicing mandate, businesses must transmit specified invoice data in a standardized format to ensure tax authorities receive the information promptly:

• Structured e-invoice format: All in-scope invoices must be issued as structured electronic invoices that are machine-readable. Latvia has adopted the European e-invoicing semantic standard EN 16931. In practice, invoices need to be in an XML format following the PEPPOL BIS Billing 3.0 specification[6][1]. This means invoices will contain a standardized set of data fields (buyer and seller details, VAT numbers, invoice date, invoice number, line item details, taxable amounts, VAT rates, totals, etc.) conforming to the EU core invoice model. Unstructured formats like PDF or paper are not accepted for mandated transactions – those must be converted into the official XML format. (Digital signatures on invoices are not required under the Latvian system, as authenticity is ensured through controlled transmission channels[5].)
• Scope of data reported: The full invoice detail is to be reported. The structured file includes all mandatory information required by Latvian VAT law and EU standards. This covers fields such as: seller’s and buyer’s VAT identification, addresses, document date and number, description and quantity of goods/services, unit prices, taxable amount, applicable VAT rate(s), VAT amount, total amount, and payment terms. Essentially, all the data normally on a VAT invoice must be captured in the e-invoice and sent to the authorities in electronic form. There are no extra data points beyond standard invoice content explicitly announced; the focus is on receiving the same information in a consistent digital format. (If any specific additional data becomes required, it would be defined in the forthcoming regulations, but as of now the European standard suffices[8].)
• Transmission channels: Latvia is using a decentralized model for e-invoice exchange. There will be multiple options to send/receive e-invoices, giving flexibility to businesses[6][8]:
  • A free government web portal – the national e-invoicing platform accessible via the official e-Address (e-adrese) system on Latvija.gov.lv[6][8]. Businesses can use this service (or integrate via API) to submit invoices to public entities and (optionally) to other businesses.
  • Certified e-invoicing service providers – particularly PEPPOL Access Points. Companies can use a Peppol network provider to exchange invoices domestically and internationally. The Latvian system is Peppol-compatible, so using a compliant service ensures your invoices meet the format and can route to recipients or the tax authority[8][5].
  • Direct transmission (bilateral) – If two parties agree (for example, via an EDI connection or even email with XML attachments), they may exchange e-invoices directly between their systems[6][8]. This might suit large trading partners with established links.

  Regardless of the delivery method, invoice data must reach the State Revenue Service (VID). The law foresees a “continuous transaction control” approach: a copy of each e-invoice is automatically submitted to the tax authority for audit and VAT reporting purposes[4][5]. In practice, if you use the eAddress platform or a Peppol access point, the system will forward the invoice data to VID. If you use direct bilateral exchange, you will likely be required to send a duplicate of the invoice (or a report of it) to the VID’s system. The technical regulation detailing this is expected by late 2025, but it is confirmed that all e-invoices have to be transmitted to the government’s central system one way or another[4].

• Timing (due dates for reporting): The model calls for real-time or near-real-time reporting of invoice data. In other words, when an invoice is issued, its data should be sent to the State Revenue Service essentially immediately[8]. Latvia intends to implement a system akin to Italy’s clearance or Hungary’s live reporting – i.e., invoice data is submitted at issuance (or at least within a very short window). The amended law specifically ties the reporting requirement to the invoice issuance. While exact deadlines (e.g. “within X hours”) will be defined in the implementing regulations, officials have indicated it will be a continuous, automated reporting flow, not a periodic batch. For B2G invoices, starting in 2026 the expectation is that as you invoice a government entity via the portal, the data is simultaneously lodged with VID[5]. For B2B from 2028, similarly, the aim is instant electronic reporting for each invoice. There is no separate monthly listing to send; the individual invoice transmissions are the reporting. (In summary, data must be passed to the tax authorities at the time of invoice exchange – effectively a real-time system.)
• Technical platform: The State Revenue Service will collect e-invoice data through a centralized portal/database. This infrastructure is being built on the existing e-Address platform and VID’s systems. By 2028, the VID’s portal will store all received invoice data from both public and private sector transactions[4]. Taxpayers or their software will interface via API for automated submissions. The e-invoicing system follows the PEPPOL 5-corner model, meaning invoices travel from sender to receiver through access points, with the government as an intermediate recipient of data[8].
• Data retention: By law, electronic invoices must be archived by businesses for the standard retention period (in Latvia, accounting documents including invoices typically must be kept for 5 years, or up to 10 years for certain transactions)[5]. The electronic format needs to be preserved for audit. The tax authority will also keep the reported data in its systems.

Penalties for non-compliance: Failure to comply with the e-invoicing and e-reporting mandate can lead to both practical and legal consequences:

• Invoice rejections (B2G): For B2G transactions, non-compliance has an immediate business consequence: if a supplier does not submit a proper e-invoice, the government entity will not accept it. Public institutions are required to reject invoices not meeting the e-invoice standard, meaning the supplier will not get paid unless they re-issue the invoice in the correct format. Thus, companies dealing with government have a strong incentive to comply to ensure payment.
• Fines and sanctions: Although specific fines dedicated to e-invoicing violations have not been widely published yet, general tax and accounting compliance penalties will apply. Latvia’s existing laws allow for monetary fines for failing to comply with invoicing and record-keeping requirements. For example, late submission of VAT returns can incur fines up to €700, and underreporting VAT can trigger penalties of 10%–30% of the tax due[9]. Similar fines could be imposed for not issuing invoices in the required format or not submitting the data (since it would be a violation of the Accounting Law and VAT Law obligations). Repeated or willful non-compliance might also attract higher fines or audits. In short, businesses that ignore the e-invoicing mandate in 2028 risk administrative fines and increased scrutiny by tax authorities.
• Contractual and legal liability: Because the mandate is backed by law, issuing an invoice in paper/PDF when an e-invoice is required will essentially mean the invoice is not legally valid for VAT purposes after the mandate dates. A business customer could refuse to accept it for deduction, and the State Revenue Service could deem the transaction improperly documented. This could lead to compliance audits. Additionally, public sector contracts now often include e-invoicing as a condition – non-compliance could be seen as breach of contract in a B2G context.

(Note: As of now, Latvian officials have not set a unique penalty specifically like “X € per invoice” for failing to e-invoice. Enforcement will likely rely on existing frameworks – non-compliant invoices simply won’t be processed (for B2G), and tax authorities can impose fines for breach of the Accounting Law or VAT law reporting requirements. Businesses are strongly advised to comply on time to avoid these risks.)

Format of e-invoice and e-reporting: The technical format is standardized:

• European Standard (EN 16931): Latvia’s e-invoices must conform to the EU’s semantic data model for electronic invoices (EN 16931-1:2017)[6]. This ensures all core information is present and structured.
• XML syntax – PEPPOL BIS 3.0: The required format is an XML file following the PEPPOL BIS Billing 3.0 specification, which is an implementation of EN16931[1][4]. In practice, this is the same format used widely across Europe for e-invoicing (often referred to as the UBL XML for invoices). By adopting Peppol BIS, Latvia ensures compatibility and interoperability across borders and with common e-invoicing software.
• “E-rēķins” standard: Locally, the term “strukturēts elektroniskais rēķins” (structured e-invoice) is used, and it adheres to the above EU standards. There is no proprietary national format; it’s based on the European standard as a national standard (LVS EN 16931)[6].
• Reporting format: The data that gets reported to VID is essentially the same XML invoice file or its content. The system does not require a separate summary report – it is a continuous transmission of the invoice in the standard format. So, e-reporting in Latvia = sending the e-invoice data (XML) to the tax authority in real time. The State Revenue Service will thus receive the data in a standardized XML schema. No additional manual forms are expected for invoice reporting.
• No additional format for B2C: Since B2C isn’t mandated, there’s no special e-receipt format mandated. Standard receipts or invoices for consumers can continue as is, unless voluntarily using the same system.
• Portal and integration: The official portal (latvija.gov.lv eAddress) and service providers will all handle the EN16931/Peppol BIS format. Companies may need to use an adapter or software that produces the XML from their billing system. The same format is used for both domestic and (if opted) cross-border invoices, though cross-border use remains voluntary for now. Using the Peppol network means a Latvian e-invoice can be sent to other countries’ systems if needed as well.

Pre-filled VAT returns: Currently, Latvia does not offer pre-filled VAT returns based on e-invoice data. The introduction of e-invoicing and real-time reporting is primarily to close the VAT gap and improve compliance monitoring, rather than to pre-populate tax declarations for taxpayers. As of 2025, businesses must continue to prepare and file their own periodic VAT returns (usually monthly) through the existing Electronic Declaration System (EDS), as before[9]. The VAT return form and due dates remain unchanged (typically due by the 20th or 23rd of the following month, depending on the taxpayer).

• No immediate plan for pre-population: Unlike some countries (e.g. Italy) that have started using invoice data to draft returns for taxpayers, Latvia has not announced such an initiative. The focus is on ensuring the tax authority has all invoice data to cross-check declarations and fight fraud, rather than providing the taxpayers with a pre-completed return. In the future, if the system is well-established, the government could consider leveraging the data for simplified compliance (such as pre-calculating VAT liabilities), but as of now there are no pre-filled VAT report programs. Taxable persons should thus not expect the tax authority to send them a pre-drafted VAT return – they must compile their VAT figures (sales, purchases, etc.) as usual, with the knowledge that the tax authority can verify those figures against the e-invoices reported.

Official regulations and resources: The Latvian e-invoicing framework is grounded in law and official decisions. Key legal acts and sources include:

• Accounting Law Amendments 2024–2025: The Law on Accounting (Grāmatvedības likums) was amended to mandate e-invoicing. Notably, amendments adopted on 12 Nov 2024 introduced the 2025/2026 mandates, and further amendments adopted on 5 June 2025 set the new 2028 date[2][5]. These laws stipulate the obligation to use structured e-invoices and empower the Cabinet to issue detailed regulations. (Reference: Saeima plenary decision of 5 June 2025, Bill No.967/Lp14, final reading.)
• Cabinet of Ministers Regulation No. 154 (2019): This is an existing regulation which requires public sector bodies to accept and process e-invoices according to the European standard[3][3]. It effectively made B2G e-invoicing possible by transposing the EU e-Invoicing Directive into Latvian law. It remains in force, and the new Accounting Law provisions build on this, extending the requirements to businesses.
• Forthcoming Cabinet Regulations (2025): The government (Cabinet of Ministers) is expected to issue a new regulation detailing the procedure for the circulation and submission of e-invoices (as authorized by the Accounting Law). A draft was anticipated by May 2025 but delayed; these regulations should cover technical specifications, data transmission rules, and any exemptions/procedures. Businesses should watch for this official regulation likely in late 2025.
• State Revenue Service (VID) guidance: The VID (Valsts ieņēmumu dienests) will be the authority enforcing e-invoicing. They are responsible for the technical platform and will publish guidelines and documentation for taxpayers and software providers. The VID’s website (latvija.gov.lv or the VID site) will host the integration specs, API documentation, and user guides once available (the mandate in the law set a deadline to establish rules by 1 July 2025[1], which will be adjusted to the new timeline).
• Ministry of Finance reports: The policy originates from the Ministry of Finance’s plan to combat the shadow economy and reduce the VAT gap. The Ministry’s report “On the introduction of an electronic circulation system for supporting documents” (approved by Cabinet) provided the rationale for these mandates[6]. Press releases or information from the Ministry and the Parliamentary Budget and Finance Committee (e.g., comments by committee chairperson Anda Čakša on the June 2025 amendment[2]) are also useful resources for understanding the intent and expected benefits.
• Official news sources: The adoption of the e-invoicing mandate has been covered by Latvian news outlets and global tax newsletters. For instance, Latvian Public Media (LSM) published an article “Saeima extends e-invoices deadline for business until 2028” on 5 June 2025, summarizing the legislative change[2]. International tax advisory firms (EY, PwC, KPMG, etc.) and EU publications have also issued alerts that provide overviews (see EY Global Tax Alert, 7 Dec 2022; European Commission eInvoicing Country Factsheet for Latvia, updated Aug 2025[3][3]).

By following these regulations and guidance, businesses in Latvia should prepare for a fully digital invoicing era – starting with B2G e-invoicing now in force, a gradual ramp-up through voluntary adoption in 2026–27, and culminating in a mandatory real-time e-invoicing & reporting system for all B2B dealings by 2028. Compliance will be crucial, as the tax authority will use this system to facilitate audits and ensure VAT is correctly reported, while hopefully reducing administrative burdens in the long run.