Selling consulting, B2B services or SaaS to Latvia from a company outside the EU
Your company is based outside the EU and you invoice Latvian businesses for consulting, development or a software subscription. A Latvian client that pays a non-resident for management or consulting services withholds 20% corporate income tax, and the same rate applies to payments to a company established in a low-tax or non-cooperative jurisdiction. From 1 January 2028, B2B e-invoicing becomes mandatory for companies registered in Latvia.
What applies when you sell services into Latvia
Four rules, who carries them and when they apply.
| Obligation | Rule | Who | When or how long | Official source |
|---|---|---|---|---|
| Withholding on management and consulting fees | 20% corporate income tax on payments to a non-resident | The Latvian client that pays you | On each payment | VID, UIN law, section 5 |
| Withholding on payments to low-tax jurisdictions | 20% on payments to a person established in a low-tax or non-cooperative jurisdiction | The Latvian payer | On each payment | VID |
| B2B e-invoicing | Mandatory for companies registered in Latvia, under an amendment to the Accounting Law | Latvian-registered companies, including a Latvian SIA you form | From 1 January 2028 | Ministry of Finance |
| VAT on services to Latvian consumers | Non-Union One-Stop Shop: one registration in one EU country, VAT for all the others declared there | The seller established outside the EU | Quarterly return | European Commission |
We found no official guidance on a Latvian withholding on royalties paid to an ordinary non-resident, and no Latvian digital services tax. The rest of this page takes each line in turn, as the official texts stood on 6 November 2026.
The 20% withholding on fees paid from Latvia
Your Latvian client deducts it before paying you. You receive the balance.
Section 5 of the Latvian Corporate Income Tax Law (the UIN law), in its version in force on 1 January 2026, makes a Latvian payer withhold corporate income tax on payments to a non-resident for management and consulting services, vadības un konsultāciju pakalpojumi in the wording of the State Revenue Service (VID). The rate is 20% (UIN law, section 5). The VID sets out the rule in its guidance on the taxation of non-resident income, last updated on 8 October 2026 (VID, non-resident income).
The duty to withhold sits with the Latvian payer, which deducts the tax from the payment. What changes for you is the amount that reaches your account, so settle it in the contract before the work starts.
Management and consulting fees
Management and consulting services billed by a non-resident carry the 20% withholding on each payment, unless a tax treaty between Latvia and your country gives a lower rate (VID).
Low-tax or non-cooperative jurisdictions
Section 5 also sets a 20% withholding on payments to a person established in a low-tax or non-cooperative jurisdiction. The Latvian payer withholds it (VID). If your company is incorporated in a low-tax country, check its status with the VID before the first invoice.
Worked example: a EUR 10,000 consulting invoice
A Latvian company owes you EUR 10,000 for a consulting engagement and no treaty rate has been applied. It withholds 20%, so EUR 2,000, and transfers EUR 8,000. A founder who priced the job expecting the full amount receives a fifth less than planned. Agree in the contract whether your fee is gross or net of Latvian tax, and settle the treaty question before the client pays.
Services the VID guidance does not classify
The 20% rule names management and consulting. Other services need a written answer.
Consulting or not
The official guidance we read does not say whether software development or a SaaS subscription counts as a consulting service for the VID. Ask your Latvian client how its accountant books your invoice before the first payment, and confirm the answer with the VID or a licensed adviser if it is unclear.
No rule on the VID page
The VID page on non-resident income does not mention a withholding on royalties paid to an ordinary non-resident (VID). We found no other official guidance, so if you license software rather than supply a service, confirm the treatment before you sign.
Treaty relief
A tax treaty between Latvia and your country may lower the 20% or remove it. The treaties and the VID procedure for applying a treaty rate were outside the official sources of this page, so we quote no treaty rate here. Because the client withholds when it pays, raise the question when you sign: ask the client which documents it needs from you, and confirm the procedure with the VID or a licensed adviser.
Digital services tax
We found no Latvian digital services tax in the official sources.
Mandatory B2B e-invoices from 1 January 2028
The obligation follows Latvian registration.
An amendment to the Accounting Law makes B2B e-invoicing mandatory for companies registered in Latvia from 1 January 2028, as announced by the Ministry of Finance (Ministry of Finance). The obligation is set for companies registered in Latvia, so a foreign company with no Latvian registration is outside it as announced.
Selling from your home company
Your own invoices fall outside the 2028 obligation as announced. Your Latvian clients are registered in Latvia and fall within it, so ask each one which invoice format it will expect from you after that date.
Selling through a Latvian company
An SIA is a company registered in Latvia, so it must use B2B e-invoicing from 1 January 2028. Choose accounting software that handles it when the company is set up.
VAT follows the EU rules
Set at EU level, so the comparison sits on our hub page.
VAT on cross-border services is set by EU rules, which our guide to selling services and SaaS in Europe compares country by country. For sales to private customers in Latvia, a business with no establishment in the EU can register for the non-Union One-Stop Shop in a single member state and declare there, in a quarterly return, the VAT due in all the others (European Commission). From 1 January 2027 the scheme covers all services supplied to private customers in the EU, with no condition on where the customer lives (Directive (EU) 2025/516).
In the order a newcomer meets them
Dates are official dates. The other steps count from your contract and from each payment.
Classify what you sell
Management and consulting fees carry the 20% withholding. For development, SaaS or a licence, get your client's position in writing.
Check where your company is established
Payments to a company in a low-tax or non-cooperative jurisdiction carry 20% withholding. Check your country's status with the VID.
Settle treaty relief and the fee terms
Ask the client which documents it needs for a treaty rate, confirm the procedure with the VID or a licensed adviser, and state whether the fee is gross or net of Latvian tax.
The client withholds
Where a 20% rule applies, the Latvian payer deducts the tax and pays you the balance. Check each payment against your invoice.
OSS return for consumer sales
If you also sell to private customers in Latvia through the non-Union scheme, the VAT goes in the quarterly return.
The non-Union scheme widens
It covers all services supplied to private customers in the EU, whatever their residence.
E-invoicing for Latvian companies
B2B e-invoicing becomes mandatory for companies registered in Latvia, including your SIA if you have formed one.
What the official sources do not settle
Five points remain open after reading the official sources. The VID guidance does not say whether software development or a SaaS subscription counts as a consulting service. Which jurisdictions count as low-tax or non-cooperative is not set out in the sources of this page. The tax treaties between Latvia and non-EU countries, which may lower or remove the withholding, were not part of the sources, and neither was the procedure for applying them. We found no official guidance on royalties paid to an ordinary non-resident. How Latvia has written the 2027 widening of the non-Union scheme into its own VAT law was not checked. Confirm each point with the VID or a licensed adviser before you rely on it.
What Balt Partners coordinates
We are based in Riga. The Latvian side is handled from here, and regulated advice comes from licensed advisers.
Withholding map before you sign
For each Latvian client: which of your fees fall under the 20% rules, what the client will ask you for, and which questions remain open, set out before the first invoice.
Questions for the VID
We prepare the open questions with you, such as how a SaaS subscription or a development contract is classified, and coordinate them with the VID from Riga.
SIA, bank account and accounting
If you want a Latvian company to contract with Latvian clients, we form the SIA and coordinate its bank account and accounting set-up, including the e-invoicing it will need from 1 January 2028.
Licensed advice where it is required
Treaty relief and the tax effect of a Latvian company are questions for a licensed adviser, and we bring one in when your case needs it. FPFM SIA does not give legal or tax advice.
If a Latvian entity fits your plans, our page on opening a Latvian subsidiary of a foreign company explains that route. For the rules in other European countries, see our country-by-country comparison for service and SaaS sellers.
Questions about selling services and SaaS to Latvia
Yes. Under section 5 of the Latvian Corporate Income Tax Law, a Latvian payer withholds 20% on payments to a non-resident for management and consulting services. A tax treaty between Latvia and your country may lower or remove that rate, so check it before the first payment.
The official guidance we read does not say whether development or a SaaS subscription counts as a consulting service for the State Revenue Service (VID). Ask your Latvian client how it classifies your invoice and confirm the answer with the VID or a licensed adviser.
A Latvian payer withholds 20% on payments to a person established in a low-tax or non-cooperative jurisdiction. Check with the VID whether your country of incorporation is treated as one.
The treaties and the VID procedure were outside the sources of this page. Because your client withholds when it pays, raise the treaty question before the first payment: ask the client which documents it needs and confirm the procedure with the VID or a licensed adviser.
From 1 January 2028, B2B e-invoicing is mandatory for companies registered in Latvia. A foreign company with no Latvian registration is outside the obligation as announced by the Ministry of Finance. A Latvian SIA you form would be covered.
We found no digital services tax in Latvia in the official sources as of 6 November 2026.
The official sources on this page set no such requirement. A Latvian client can pay your foreign company, withholding 20% where a withholding rule applies, and VAT on consumer sales can go through the non-Union One-Stop Shop. Whether a Latvian SIA suits your plans is a question for a licensed adviser.