E-Invoicing in Latvia

by | Mar 11, 2024 | E-invoicing

The Latvian Ministry of Finance has recently published a draft plan aimed at curbing the shadow economy for the period of 2024-2027, which includes the implementation of a mandatory e-invoicing system for all B2B transactions.

Impact

According to the draft plan, issuing and receiving structured e-invoices for B2B transactions will become mandatory. This initiative is designed to streamline the invoicing process and introduce a technical solution for the efficient circulation of e-invoices. Additionally, the system will feature the implementation of real-time reporting, aimed at enhancing the monitoring and compliance of VAT payment obligations.

Latvia is paving the way for mandatory B2B e-invoicing, with further details anticipated to be released in the coming months.

Currently local government institutions in Latvia are required to accept e-invoices in their public procurement process as per the specifications established by the European Union. However, the Latvian Finance Ministry is proposing a plan to introduce electronic invoicing as mandatory for both B2B and B2G transactions from 2025. At that stage the circulation of e-invoices will have to be made in accordance with the European Electronic Documents and e-Invoicing Network (PEPPOL) which allows both sending and receiving of e-invoices in a standard mode.

Understanding the Landscape

E-invoicing and e-procurement are pivotal aspects of 21st-century business. The Latvian government has taken significant steps to promote e-invoicing adoption.
Here are the key points:

Mandatory Implementation Timeline:

Phase 1 (May 1, 2022): Suppliers in the public sector must use e-invoices when billing the government. The government receives and stores these invoices.

Phase 2 (July 1, 2022): Public entities send e-invoices to companies, which should be able to receive and store them.

Phase 3 (January 1, 2023): E-invoicing becomes mandatory for the entire B2B sector.

  • Target Completion (December 30, 2025): Full implementation of Latvia’s electronic invoicing system.

PEPPOL Standard

  • Latvia’s e-invoicing will align with the European Electronic Documents and e-Invoicing Network PEPPOL (Pan-European Public Procurement Online) standard.
  • The government aims to set up interoperability and connectivity between Latvia and other EU Member States through the PEPPOL network.

Latvia’s E-Invoicing Solution

Latvia has developed an e-invoicing solution based on its existing Secure Electronic Delivery Platform (e-Address).
Key features include:

  • E-invoicing integration in eAddress for secure transmission.
  • An interface for submission and receipt of e-invoices.
  • A public e-invoicing API library for transmission between different accounting systems.
  • Connection with the PEPPOL network.

Benefits for Businesses

  • Efficiency: Streamlined processes save time and reduce paperwork.
  • Accuracy: Digital invoices minimize errors and enhance data accuracy.
  • Cost Savings: Reduced printing and postage costs.
  • Compliance: Adherence to legal requirements ensures smooth operations.
Nathan Trouwloon
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