Legislation

The Ministry of Finance has prepared amendments to the Corporate Income Tax Law which, after public consultation, have been submitted for inter-institutional coordination. They would widen the definition of dividends (liquidation quota, consideration for share buy-backs), introduce a mechanism for corresponding transfer pricing adjustments, set the time for paying deferred CIT on deemed dividends in a reorganisation, exclude employee share plans from the calculation of reductions in equity and relax the conditions for deducting interest payments by applying a net interest calculation. The rules are also aligned with the amendments to the Social Enterprise Law that enter into force on 1 January 2027.

The Ministry of Finance has prepared amendments to the Corporate Income Tax Law to clarify the rules and prevent double taxation. The definition of dividends is widened (to include the liquidation quota and consideration for share buy-backs), a transfer pricing adjustment mechanism is introduced that allows the taxable base to be reduced where a related party's income has been adjusted, the rules on deferred payment for deemed dividends in reorganisations and the conditions for deducting interest are clarified, as are the provisions on employee share programmes and social enterprises. The public consultation has closed and the draft has been submitted for coordination.

An iBizness article (Artūrs Freibergs) on the amendments to the Tourism Law that entered into force on 10 July 2026 and implement EU Regulation 2024/1028 on data collection in short-term accommodation rental services. The law introduces the term "business tourism" and new requirements for short-term accommodation landlords (on Airbnb, Booking and other platforms) to provide data, and simplifies the granting of resort status to municipalities. The article is paywalled.

The publisher iŽurnāli has updated its handbook on internal whistleblowing systems in line with the amendments to the Whistleblowing Law that entered into force on 1 March 2026; an internal system is mandatory for organisations with 50 or more employees. The changes concern the procedure for the whistleblower contact person, the documentation of oral reports and an expanded list of prohibited adverse consequences (intimidation, blacklisting).

The Latvian Traders Association has submitted to the Saeima's Economic Affairs Committee and the government a protest against the amendments to the Consumer Rights Protection Law promoted by the Ministry of Economics. The Association considers the penalty system – up to 4% of turnover or EUR 300,000 – disproportionate and criticises vague concepts ("reasonable price", "reasonable period" for repairs and spare parts) that create a risk of arbitrary application by the Consumer Rights Protection Centre (PTAC), as well as the liability of small distributors for goods from third-country manufacturers. The LTA proposes a fixed penalty cap of EUR 1,000 for small businesses and an "advise first" approach.

The Ministry of Finance has drafted amendments to the Law on Annual Reports and Consolidated Annual Reports setting new thresholds for preparing a sustainability report: the obligation will apply to companies and group parent companies with net turnover above EUR 450 million and an average number of employees above 1,000. The same criteria will apply to the disclosure of non-financial information in the management report; voluntary application of European Commission standards must be stated in the management report. The public consultation runs until 14 September 2026.

On 3 September the Saeima conceptually supported, in the first reading, urgent amendments to the Protection Zone Law widening the strip to be cleared of trees and shrubs under 110 kV power lines from 13 to 18 metres on each side of the line axis. The amendments affect landowners whose properties contain power line protection zones; the justification is that in the storm of 22–23 August around 70% of the damage to 110 kV lines was caused by fallen trees. The draft law still has to be adopted in the final reading.

On 3 September the Saeima supported, in the first reading, amendments to the Spatial Development Planning Law transferring the power to suspend municipal spatial plans from the Minister for Environmental Protection and Regional Development to the Cabinet of Ministers as a collegial body. Sectoral ministries will be obliged to inform the responsible minister if a plan's solutions threaten state interests in the fields of security, defence, energy, climate or the environment. The draft law still has to be examined in the final reading; no entry-into-force date has been set.

Sorainen's tax news review (I. Zladeja, A. Lasmane, K. Erele, E. Hercenbergs, J. Taukačs). The Saeima has approved changes to the simplified tax regime for small-scale economic activity: the revenue threshold is lowered from EUR 25,000 to EUR 12,000, a 10% "starter" micro-enterprise tax rate is introduced, withheld automatically by the credit institution, with an additional 15% for non-compliance. Amendments to the Personal Income Tax Law have been submitted on eligible expenses for physician-prescribed medical devices (from 31 December 2026), along with clarifications of excise/natural gas trader status. The State Revenue Service's methodology clarifies that a permanent establishment's reporting period may not exceed 12 months and that ordering by QR code in a restaurant is not distance selling. The review also covers commentary on the OECD transfer pricing guidelines, EPPO searches at two Latvian hospitals (procurements worth EUR 657,000) and tax news from Lithuania and Poland.

The Ministry of Justice is promoting amendments to the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing: if a credit or financial institution terminates its relationship with a foreign resident or legal entity and closes the account, but the client does not exercise the right to withdraw the funds within five years, the funds escheat to the state. The rules do not apply to natural persons who are Latvian residents, nor to frozen, attached or pledged funds. At the start of 2025 there were 39,136 closed accounts at credit institutions holding approximately EUR 26.8 million; the funds are intended to be channelled into support for at-risk children and young people.

The Ministry of Finance has submitted for public consultation the draft law "Amendments to the Law on Annual Reports and Consolidated Annual Reports", transposing EU Directive 2026/470 on sustainability disclosures. A sustainability report will have to be included in the management report only by companies with net turnover above EUR 450 million and an average of more than 1,000 employees; the same criteria will apply to reporting on material intangible resources. Companies that report voluntarily under EU standards will have to state this in the management report. The deadline for submitting proposals is 14 September 2026.

On 3 September 2026 the Saeima convenes for the first sitting of its autumn session with 20 items on the agenda. Amendments to the Notariate Law simplifying notaries' work processes and reducing the administrative burden are scheduled for the third reading, and amendments to the Law on Judicial Power to strengthen judicial self-governance and improve the work of the courts for the second reading. In the final reading: amendments restricting the use of identity documents by persons declared wanted, and amendments to the National Security Law. Draft laws on preventing conflicts of interest in collegial institutions and on electoral rules are also being referred to committees.

The Saeima's Budget and Finance (Taxation) Committee is considering for the third reading amendments to the Micro-enterprise Tax Law introducing a simplified tax payment procedure for natural persons who provide services or sell goods only to other natural persons with annual turnover of up to EUR 12,000 (coaches, gardeners, private tutors, hairdressers, etc.). A "starter" micro-enterprise tax rate of 10% of turnover is envisaged, with registration at a bank by opening an economic activity income account and no bookkeeping obligation; the conditions are no registered economic activity in the last two tax periods, no employees, and all revenue passing through the account. Breaches carry an additional 15% surcharge and a ban on using the regime for two periods. Entry into force is planned for 1 April 2027; around 1,000 users and EUR 2.5 million a year for the budgets are forecast.

On 1 September 2026 the Cabinet of Ministers approved amendments to the Administrative Procedure Law. Authorities will be able to choose how to notify an unfavourable administrative act (not only by registered letter), the courts will expand the use of video conferencing and reduce the amount of personal data included in documents; legal entities will be able to request full or partial exemption from the state fee (until now only natural persons could), and procedural sanctions may be imposed for abuse of procedural rights. The amendments still have to be adopted by the Saeima.

The State Revenue Service (VID) reports that from 1 July 2027 customs representation services in Latvia may be provided only by persons registered in the Register of Customs Representation Service Providers, which will be maintained by the VID and whose data will be publicly available on its website. Currently the law does not require such registration – only a vehicle driver who communicates customs control decisions to the carrier is regarded as a customs representative.

Kaspars Treilibs, senior lawyer at TEGOS, explains the amendments to the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing (NILLTPFN) adopted on 3 December 2025, whose provisions on beneficial owner (PLG) data entered into force on 1 July 2026, implementing the requirements of Directive (EU) 2024/1640. From now on, for each beneficial owner the Enterprise Register must record all of their nationalities and a new element – the extent of control – in addition to identification data, country of permanent residence and type of control. Until 31 December 2026 the Enterprise Register will automatically record the extent of control where it can be determined from existing data (e.g. shareholder status); in other cases the entity itself must submit the information. From 1 July a beneficial owner may request that public access to their data be restricted if disclosure creates a risk of harm.

On 1 September 2026 the Cabinet of Ministers approved amendments to the Administrative Procedure Law prepared by the Ministry of Justice (25-TA-2124), which will now go to the Saeima. They would drop the mandatory registered letter for notifying unfavourable administrative acts, expand the use of video conferencing in administrative courts, limit the amount of personal data in documents and rulings, provide a state-paid interpreter only where the court so assesses, and extend the exemption from the state fee and security deposit on grounds of financial hardship to organisations and companies as well. Sanctions are to be introduced for "procedural hooliganism" – the abuse of procedural rights to delay proceedings.

On 1 September the Official Gazette (Latvijas Vēstnesis, No. 167) published the amendments to the Consumer Rights Protection Law adopted by the Saeima on 20 August, which enter into force on 15 September (some provisions on 20 November; language requirements must be met by 30 June 2027). New definitions are introduced (creditor, credit intermediary, deferred payment service, tying practice), offering credit without the consumer's express request is prohibited, creditworthiness assessment is strengthened using verified income data and credit information bureaus, and reasonable forbearance measures are set out in the event of payment arrears. Large companies providing deferred payment services must register in the PTAC register; restrictions on remuneration policies for creditors' employees and intermediaries are set, and the withdrawal period for distance contracts is extended where information has not been provided.

On 1 September the Official Gazette (Latvijas Vēstnesis) published the amendments to the Credit Information Bureaus Law adopted by the Saeima on 20 August, which enter into force on 15 September; the new paragraphs of Section 12 enter into force on 20 November 2026. Natural persons' rights are strengthened to obtain credit information about themselves and to monitor assessments of their creditworthiness, as well as to register in the bureau's system a note declining credit offers, visible to all bureau users (creditors); the bureau must delete a withdrawn note within three days.

The State Revenue Service reminds that under Cabinet of Ministers Regulation No. 509 of 25 August 2026, issued on the basis of Section 8.6 of the Law on Support for Ukrainian Civilians, from 1 September 2026 until 30 June 2027 it is prohibited to import goods of Russian and Belarusian origin in seven chapters of the Combined Nomenclature: printed matter (49), knitted and other clothing (61, 62), made-up textile articles and used clothing (63), footwear (64), headgear (65), toys and sports equipment (95). The ban also applies to goods of these origins imported from third countries.

On 1 September the Cabinet of Ministers approved amendments to the Administrative Procedure Law prepared by the Ministry of Justice, which will next be examined by the Saeima. They would drop the mandatory registered mail requirement for notifying administrative acts, expand the use of video conferencing in administrative courts, reduce the amount of personal data in documents and rulings, and provide a state-paid interpreter more selectively. The possibility of exemption from the state fee and security deposit on grounds of financial status is to be extended to legal entities as well, and procedural sanctions are to be introduced for deliberate delay of proceedings and contempt of court.

Sorainen's review of legislation and case law for 11–25 August. Key points for businesses: on 19 August amendments to the Unfair Trading Practices Prohibition Law entered into force; on 20 August the Saeima adopted in the 3rd reading amendments to the Consumer Rights Protection Law and the Credit Information Bureaus Law, and in the 2nd reading amendments to the Advertising Law, the Payment Services Law and others, under which consumer supervision in financial services passes from PTAC to the Bank of Latvia from 1 January 2027; Cabinet regulations on registration of deferred payment service providers (registration fee EUR 50,000) and consumer credit amendments (Directive 2023/2225) have been drafted. In the Account Register regulations the Insolvency Control Service (to be liquidated on 1 October 2026) is replaced by the Ministry of Justice; amendments to the Advocacy Law shorten the practice requirement from 7 to 5 years. The review also covers Constitutional Court case 2026-13-01 on compensation for losses in the event of an unjustified attachment of property and Senate judgments SKC-526/2026 and SKA-393/2026.

On 31 August the Official Gazette (Latvijas Vēstnesis, No. 166) published Cabinet of Ministers Regulation No. 509 of 25 August, which enters into force on 1 September and, on the basis of the Law on Support for Ukrainian Civilians, prohibits the import into Latvia of industrial goods of Russian and Belarusian origin – including when they are imported from other third countries. The ban covers seven groups of the Combined Nomenclature: printed matter (49), knitted and other clothing (61, 62), made-up textile articles (63), footwear (64), headgear (65) and toys and sports equipment (95).

Cabinet of Ministers Regulation No. 499 of 25 August, published on 31 August and in force from 1 September, amends the procedure for obtaining exemption from natural resources tax on environmentally harmful goods. Waste management operators and their cooperation partners must be registered in the relevant producer registers (electrical equipment, batteries), the reporting deadline is moved from 31 March to 31 August (for the period from 1 January to 30 June), and authority action is provided for where the 40% collection target is not met; a more detailed reporting section on battery recycling applies from 2027–2028.

The Cabinet approved rules banning, from 1 September 2026, imports of printed materials, clothing, footwear and toys originating in Russia and Belarus, including goods routed through third countries. The rules supplement existing EU sanctions and will be reviewed annually. Imports from these countries have fallen 91% since 2022.

The Cabinet decided that line ministries must, by 30 September, review planned and ongoing public procurements valued at 140,000 euros or more for supplies/services, or 1 million euros for construction. They must assess whether the procurement is necessary, whether supplier requirements are proportionate, and the risk of cost overruns. State-owned enterprise supervisors must complete their reviews by 1 September.

The Cabinet approved draft laws by the Finance Ministry and the Bank of Latvia transposing EU Directive 2025/1 on recovery and resolution of insurers. Insurance and reinsurance companies will have to prepare recovery plans, and if a company faces serious difficulty, the supervisor may apply resolution tools such as business or asset sales, a bridge institution, or write-down of liabilities. Costs will be covered by the Insurance Guarantee Fund, funded by licensed insurers.

A law published on 25 August lets the state, as airBaltic's shareholder, creditor and bondholder, apply up to four stabilisation measures for AS "Air Baltic Corporation" — extending a 30-million-euro state loan, converting it into equity, converting up to 50 million euros of state-held bonds, or buying up to 30 million euros of new bonds. The Cabinet decides which measures to use, with quarterly reporting to the Saeima's Budget and Finance Committee. The law entered into force on 26 August.

Amendments to the Law on Maternity and Sickness Insurance, published on 25 August, change how parental benefit is calculated for working parents who are not on formal child-care leave. From 1 January 2027 such parents will receive the benefit at 75% of the full rate. The law took effect on 8 September, though the new rule only applies from 2027.

The Cabinet approved Finance Ministry amendments to the Personal Income Tax Law. Key changes raise the tax-exempt ceiling for volunteer and clergy expense reimbursements from 1,000 to 3,000 euros a year, exempt loyalty-programme cashback from tax, and widen tax-free gifts between relatives. The re-election period for the reduced patent tax is also shortened from five to two years.

Justice ministers of Latvia, Lithuania and Estonia met in Tallinn to discuss cooperation on protecting democratic institutions and the rule of law. Latvia's minister stressed that EU requirements should be transposed proportionately, avoiding unnecessary administrative burden on business. No specific legislative changes were announced.

On August 21 the Saeima backed, in its second reading, amendments to the Civil Procedure Law that streamline judgment enforcement. Where a company's reorganisation is already registered in the Enterprise Register, bailiffs will no longer need extra steps to continue a case, and notices to parties whose address is unknown may be published in the official gazette "Latvijas Vēstnesis". The amendments also bring the Bank of Latvia into handling consumer collective complaints alongside the PTAC consumer rights body; the changes are due to take effect on 1 January 2027.

On 20 August the Saeima adopted amendments to the Consumer Rights Protection Law introducing a new "capital release credit" product, allowing loans secured against real estate that is not the borrower's declared residence. The loan may not exceed 70% of the property's market value, the repayment term can run up to 30 years, and the borrower's liability is limited to the mortgaged asset. The new rules take effect in mid-September and aim to boost Latvia's low lending-to-GDP ratio (27.5%, versus the eurozone average of 76.9%).

On August 20 the Saeima adopted amendments to the consumer rights protection and credit information laws letting residents register with credit bureaus a refusal to borrow, which lenders will then have to respect when assessing applications. The law also curbs unsolicited credit offers, sets requirements for remote lending and disclosure of AI-personalised offers, and introduces a new home-equity loan product capped at 70% of property value. It further extends registration requirements to credit intermediaries and large deferred-payment providers.

In an emergency sitting on August 20, the Saeima passed in its final reading a law letting the state extend repayment deadlines and convert its loan and bond claims against airBaltic into equity. It allows the state to buy up to €30 million of newly issued company bonds and convert up to €50 million of existing bond claims into capital, with specific decisions left to the Cabinet of Ministers. The government must report on implementation to the Saeima's Budget and Finance Committee at least once a quarter.

Falber Investments, parent company of Estonian dairy producer Agrone, has agreed to acquire the Rigas piena kombinats group, which includes Valmieras piens. Completion is subject to approval by the competition authorities in Estonia and Latvia, and until then both companies will keep operating independently. Financial terms were not disclosed.

Latvia's Ministry of Defence has drafted amendments to the National Cyber Security Law creating a legal framework for security researchers to access information systems to identify vulnerabilities, without unduly burdening systems or compromising security. The rules would cover essential and important service providers and critical infrastructure operators. The proposal follows a 2026 court case in which inventor Raimonds Skuruls was fined EUR 4,290 for reporting a vulnerability to CSDD; public consultation runs through the end of August.

Latvia's statistics office published its first monthly list of Latvian-registered companies trading with Russia or Belarus, under June amendments to the law supporting Ukrainian civilians that override tax-secrecy rules. The tax authority must now feed this data to the statistics office for disclosure. Updates are planned monthly.

Amendments effective from 19 August transfer maintenance of the real estate intermediaries register from the Economics Ministry to the industry association LANĪDA. Registration becomes fully electronic and faster, while the EUR 40 registration/supervision fee and professional requirements stay unchanged. LANĪDA will not have access to tax or criminal record data.

A "Jurista Vards" conversation with sworn advocate Katrine Plavina-Mika and procurement specialist Arija Vecmane discusses the decade's biggest reform of Latvia's public procurement rules, aimed at making the process faster and cheaper.

At an extraordinary session, the Saeima urgently considered amendments to the National Security Law allowing temporary requisition of privately owned real estate in case of a threat caused by military operations. The initial seizure period would be 14 days, extendable by the Cabinet of Ministers, with compensation guaranteed to owners for any damage. The measure covers only emergency wartime powers, not peacetime nationalization.

As of August 19, amendments to the Consumer Rights Protection Law lifted an eight-year ban on consumer credit advertising, replacing it with a responsible-advertising regime requiring cost warnings and barring implications that credit is easily available. PTAC can fine violators up to EUR 300,000.

Amendments to the Unfair Trading Practices Prohibition Law took effect on 19 August, requiring buyers to give suppliers at least 30 days' notice before delisting a product, introducing clearer rules for delivery forecasts, and limiting unilateral penalties where shortfalls stay within 10% of the forecast. Retailers must now pay for regular fresh vegetable and berry deliveries within 20 days. KP is urging market participants to review their cooperation agreements.

The Mere retail chain was shut down after Russian businessman Sergey Schneider, owner of the company managing Mere through Latprodukti LLC, was placed under the EU's 21st sanctions package. On 6 August Latvia's Financial Intelligence Unit issued a general administrative act allowing suppliers to reclaim goods held by sanctioned companies without a separate permit, coordinating with the Food and Veterinary Service and other agencies. Sanctions do not cancel the sanctioned companies' payment obligations to suppliers, but settlements must follow sanctions procedures.

Ahead of the expected "airBaltic" financial stabilisation law, the Prime Minister said the Saeima must make a fundamental decision on whether the state will remain an owner of the airline, given its financial troubles and the further investment required.