Is VAT Registration Required When Importing Goods?

State Revenue Service (VID)

Reader asks: An individual – a self-employed person who is a personal income tax payer – makes jewelry. They purchase the necessary materials (beads, hooks, and threads) on online platforms such as Temu.com and Etsy.com. In such a case, is it necessary to register as a value-added tax (VAT) payer? Is VAT registration required in Latvia if the materials are purchased from countries outside the European Union (EU)?

VAT application may vary significantly depending on the specific situation and the terms of the transaction. The transaction description in the question is not sufficient to provide a specific answer, so general information is provided regarding registration with the State Revenue Service (VID) as a VAT payer.

Any person engaged in economic activity under the meaning of the Value Added Tax Law (VAT Law) must register with the VID VAT register in the following cases:

• the total value of VAT-taxable supplies of goods and services over the previous 12 months exceeds EUR 50,000;
• the total value of intra-EU acquisitions of goods without VAT in the current calendar year reaches or exceeds EUR 10,000;
• before providing a service where the place of supply, under Article 19, Paragraph 1 of the VAT Law, is in another EU member state and the tax liability lies with the service recipient;
• before receiving a service where the place of supply is determined according to Article 19, Paragraph 1 of the VAT Law, from another EU member state or from any third country or third territory, if the service provider does not conduct business in Latvia.

For example, if a private person receives paid services for using an online platform or advertising from another EU member state or from a third country or territory not operating in Latvia, they must register with the VID VAT register before receiving such services.

VAT regulatory legislation does not require mandatory registration in the VID VAT register when importing goods.

This article was created in cooperation with iBizness.lv

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