What should a self-employed to know about business activity documents?

As a self-employed person, it is important to record every business transaction with a proper document. A document is the only way to legally prove that the transaction is genuinely related to your business activity.

Keep in mind! Prepare the document in a way that:

• the included information does not get lost and the document retains its legal validity throughout the storage period;
• it is possible to produce a copy of the document;
• it cannot be easily altered technically and is technically stable (for example, do not use pencil to fill it in).

Before accepting any document related to your business activity, make sure to check:

• whether the document includes all required details to be considered valid;
• whether all the above technical requirements are met;
• whether the document contains no mistakes and all details are written correctly, including calculations like the receipt amount.

What are the mandatory elements of a business document?

We often notice that some documents used in business activities are missing required elements. But remember – only properly completed documents are valid and applicable to business activities. So, if you want to deduct costs like a mobile bill, fuel for your car, or other expenses, but don’t have a proper document proving their relation to your business, you won’t be able to write them off.

Business documents must comply with the Accounting Law and must include mandatory elements if the transaction exceeds €30 (excluding VAT). Save this list and always double-check whether you have included all necessary fields:

• document type, date, and number;
• details about the issuer – the business (transaction party) issuing the document;
• name of the issuer (company name, for sole traders – the firm name), registration number or taxpayer code. If the issuer is a self-employed individual who is not a sole trader, then – name, surname, and taxpayer registration code;
• information identifying other parties to the transaction, if any (same information as for the issuer);
• if the other party is an individual not engaged in business activity, indicate their name and surname. Personal ID is indicated only upon request or if required by law;
• transaction description and amount in euros; quantity and unit if necessary;
• signatures of the persons responsible for the transaction and the accuracy of the information (unless exempted by law).

Self-employed people often ask – do I need to request my details on the receipt every time I buy goods for my business? Yes, you must. As mentioned – it’s the only way to ensure the document is recognized as related to your business activity. Although it may seem inconvenient, it’s the only way to claim the expense and reduce your taxable income. Note – if you enter expenses in your journal without proper documents, the State Revenue Service (VID) may challenge them and classify them as non-business-related.

Some documents, such as VAT invoices, have additional mandatory fields. If you are also a VAT payer, you must comply with Article 125 of the VAT Law regarding invoice requirements.

How long should these documents be stored?

Recording data in the journal alone is not enough – you are required to store these documents. Supporting documents like invoices, receipts, and handover-acceptance acts must be stored for 5 years. Accounting documents, including the journal, must be stored for 10 years. Also, note that scanned copies are not valid – you must keep the original.

Learn more about storage periods in the Accounting Law.

How to add business documents to the journal easily and quickly?

Use our newest feature – photograph the receipt, upload it to the pats.lv system, and the information from the receipt will automatically appear in your business journal! Visit es.pats.lv and try out this new function in your profile! Everyone gets 5 trial uses, while PRO and MAX plan users can use it without limits!