January, 2025

Changes in various tax areas

From 1 January 2025, changes to labour and personal income taxes come into force, increasing the minimum wage, introducing a single (fixed) tax-free minimum, raising the tax-free minimum for pensioners and increasing the tax rate on capital gains. Amendments have also been introduced to the Micro-enterprise Tax Law, the gambling sector and the level of fees for issuing identity documents.

Changes to Value added tax

The changes to VAT are related to the implementation of the EU Directive's requirements for small and medium-sized enterprises, which will be exempted from VAT in the relevant EU Member State if VAT-taxable transactions are also carried out in other EU Member States. The changes provide that from 1 January 2025 the VAT registration threshold for registration in the VAT register of the State Revenue Service will be calculated on a calendar year rather than the previous 12 months. The VAT rate of 12% on fruit, berries and vegetables will be permanently maintained from 2025.

Changes in Succession law

On 1 January 2025, changes to the succession part of the Civil Law, the Notary Law and the Law on the Credit Register entered into force. The new legislation clarifies the system of acceptance of succession, introduces limited liability of heirs towards  creditors of a deceased’s estate, clarifies the procedure for acceptance of creditors' claims and the rules on guardianship of succession, and amends the law on disbursements received in advance and on the division of succession, affecting fungible items and share capital. Consequently, heirs will no longer be able to accept an inheritance tacitly if an interested party has initiated the succession proceedings, the testator will no longer be able to set a time limit for applying to accept the inheritance, the liability of heirs will be limited to the amount of the inheritance and the notary will be obliged to ascertain the potential heirs up to the third class. The new rules apply to succession matters opened after 1 January 2025.

NACE Revision 2.1

NACE is a classification system for collecting and presenting statistical data according to economic activity. NACE Rev.2.1 will enter into force from 2025. The taxpayer must submit the current NACE Rev.2.1 code for the main activity himself by 20 January 2025 if the NACE Rev.2 code for the main activity previously filed with the National Revenue Service is split over several codes. The taxpayer does not need to notify the National Revenue Service and the change will take place automatically if, according to the transitional table of the Central Statistical Office, the previously submitted NACE Rev.2 code for the main activity is changed to one of the new NACE Rev.2.1 codes. If the taxpayer has changed the declared main activity in 2024, the change must be notified to the State Revenue Service by 1 May 2025. The requirement for 1 May 2025 is laid down in the Law on Taxes and Fees, while the requirement for 20 January is laid down by the State Revenue Service and Central Statistic Bureau.

Changes to the Land Register Law

As of 1 January 2025, new disclosure requirements will be introduced for the registration of immovable property rights. The requirements apply to legal persons registered abroad and to legal persons that have registered a representative office and a branch in Latvia and impose an obligation to disclose beneficial owners. The level of enforcement depends upon the country of registration of the trader and whether the country is an EU Member State or not. A person registered in Latvia does not have to make additional disclosures, as the information can be obtained from the commercial register. For persons registered abroad, additional filing is required.

Amendments to the Copyright Law

On 11 January 2025, amendments to the Copyright Law entered into force, providing additional protection for authors in relation to unlawfully published copyright or related rights objects. The amendments provide for the right of authors to apply to the National Council for Electronic Media (NCEM) for an injunction to stop unlawful publication of copyright or related rights. The Council will be able to restrict or block illegal and harmful websites. Until now, authors could only protect their rights through the courts.

Changes to the prescription of medicinal products

On 1 January 2025, Cabinet of Ministers Regulation No.175 "Regulations Regarding Manufacture and Storage of Prescription Forms, and Writing out and Storage of Prescriptions" entered into force. The amendments provide that a medical practitioner may issue a prescription in paper form if the patient needs the medicine or medical device immediately and the prescription cannot be issued in the health information system for technical reasons. The amendments also give the right to prescribe to medical assistants, nurses and midwives.

Changes in the tobacco sector

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