B2B Peppol structured e-invoicing in fight to combat VAT fraud
The update to the Accounting Law to introduce mandatory structured e-invoices on B2B transactions by resident businesses has been promulgated on 12 November 2024. There will be two phases for resident businesses only:
- Jan 2025: B2G for new contracts only; and
- Jan 2026: B2B
Regulations on the issuance of e-invoicing should be provided by May 2025. Since many details remain outstanding, including automated reporting, the remains the risk of delays.
E-invoice data will be required to be submitted to the State Revenue Service from 1 January 2026. The government may offer a free e-invoicing platform to support the new mandate. All of the above should be confirmed with final legislation and regulations due on 1 May 2025.
The Government has said regulations developed to prescribe rules regarding the B2B invoicing obligations, including procedural rules and technical specifications. Invoices will either be able to submitted via:
- a free national delivery solution;
- PEPPOL services providers; or
- directly between taxpayers, when agreed between the two parties.
Latvia estimates its VAT Gap (missing tax revenues) is €162 million per annum.
Under the EU invoicing rules, Latvian public and government institutions must accept Business-to-Government electronic invoices. This is based on the PEPPOL standard – European Electronic Documents and e-Invoicing Network. Voluntary e-invoicing for B2B transactions is available via a number of routes today in Latvia:
- Via the government’s ePakalpojumi platform
- The capital’s authorities in Riga has an e-service option
- The public authorities’ own e-address
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Latvia joins European dash for transaction-based VAT reporting
Latvia will join Italy’s SdI pre-clearance model, which Belgium, Bulgaria and France are rolling out in the forth coming 24 months. Whilst others have opted for post-issuance live invoice reporting, including Hungary, some like Spain e-invoicing proposal show a switch to the model used across South America and Asia.
EU VAT in the Digital Age reforms include a channel for harmonised Digital Reporting Requirements (DRR) and Continuous Transaction Controls (CTC) by EU states. This grew from the 2020 Tax Package proposals for a fairer and more efficient EU tax regime.
VAT Calc’s VAT Calculator tax engine can provide live global VAT or GST determination for your e-invoicing or real-time reporting obligations.
PEPPOL – EU standard for einvoicing going global
(Pan-European Public Procurement Online) is a set of specifications maintained by the OpenPEPPOL non-profit organisation with the aim of standardizing cross-border, electronically supported procurement procedures. PEPPOL is managed by the OpenPEPPOL Association. It features, among other things, electronic invoicing. In addition to specifications PEPPOL consists of a delivery network. It started off as a development project with the same name under the European union Competitiveness and Innovation Programme from May 2008 to August 2012.
