Mandatory e-invoicing in Latvia. How will it impact Lithuanian businesses?
Starting January 1, 2025, Latvia has introduced a new requirement: all invoices sent to Latvian government institutions must be electronic. This means all business-to-government (B2G) transactions in Latvia have become fully digital. Consequently, every business working with Latvian public institutions must start using e-invoices.
What’s changing in Latvia?
The Latvian government has already implemented the B2G e-invoicing standard. From now on, all transactions with public institutions must use electronic invoices only. This is a significant step toward enhancing transparency and efficiency in the public sector, as well as ensuring faster and more secure invoice processing.
However, the changes don’t stop there. Latvia is already planning to extend this requirement to the business-to-business (B2B) sector. Starting in 2026, all Latvian businesses will be required to use e-invoices when providing goods or services to other businesses. This means businesses operating in Latvia must prepare for a transition to digital invoicing, not just in the public sector but also in the private sector.
Similar changes in neighboring countries
In addition to changes in Latvia, mandatory B2B e-invoices are being introduced in other neighboring countries:
Estonia. While B2G e-invoices have been used for years, starting in July 2025, B2B transactions will also require e-invoices (XML) if requested by at least one of the parties involved. By 2027, businesses will be required to use e-invoices exclusively.
Poland. Gradually implementing mandatory e-invoices for both B2G and B2B transactions starting in 2026, depending on company turnover and invoice amounts.
The EU is also aiming to modernize VAT management with the “ViDA” (VAT in Digital Age) directive. It promotes the use of B2B e-invoices in commercial transactions between EU countries. Lithuanian businesses with foreign partners should prepare to work with e-invoices.
How will this impact Lithuanian businesses?
Lithuanian companies will not be required to send B2B e-invoices to Latvian businesses. However, if foreign partners demand it, they will need to adapt to their partners’ expectations. When trading with foreign partners, it is advisable to prepare in advance by adopting solutions that enable seamless e-invoice submission.Observing changes in neighboring countries, Lithuanian businesses may face:
Partner Requirements. Companies working with partners in Latvia or other countries may be required to provide e-invoices. These markets will have already developed more efficient processes, and PDF invoices may no longer be acceptable. As a result, businesses will need to upgrade their accounting systems to meet client requirements. Similar trends are seen in Scandinavian markets.
Regulatory Changes. Lithuanian authorities, inspired by the successful experience of neighboring countries, may consider initiatives to encourage or mandate e-invoicing to increase transparency and improve VAT collection efficiency. Additionally, the EU “ViDA” directive foresees the gradual integration of e-invoices in cross-border transactions, making their use an essential part of business operations.
How Can Lithuanian Businesses Prepare?
Lithuanian companies working with Latvia or other countries where e-invoicing will become mandatory should invest in digital solutions that ensure efficient and legally compliant invoicing. This will not only simplify business processes but also help companies comply with local regulations and avoid potential penalties.With the right tools, businesses can ensure a smooth transition to e-invoicing:
For small and medium-sized businesses, the Banqup invoicing platform enables sending e-invoices to Peppol (a European e-invoicing network), SABIS (Lithuania’s B2G e-invoicing system), “e-adrese” (Latvia’s B2G e-invoicing system), and Estonia’s invoice exchange network. In the future, Banqup will also integrate with Poland’s local KsEF system when invoices cannot be submitted through Peppol. Additionally, this platform generates European standard-compliant e-invoices (XML/UBL) that can be easily sent via email.
For large enterprises seeking to automate their invoicing processes, more advanced technological solutions are available:
Euroconnector. A data exchange tool initiated by Lithuania’s Ministry of Economy and Innovation, managed via API, for sending invoices through the Peppol network. By linking an accounting system to Euroconnector, businesses gain capabilities such as sending e-invoices, tracking delivery statuses, exchanging messages, and receiving e-invoices from business partners automatically.
Unifiedpost offers integrated invoicing solutions not only for the Peppol network but also for local e-invoicing platforms and helps ensure correct e-invoice creation and transformation into European-standard-compliant data files.
Latvia’s requirements for mandatory B2G and B2B e-invoices are not only a significant step for the local market but also directly impact Lithuanian businesses. If your company works with foreign partners in countries planning mandatory e-invoicing, now is the ideal time to prepare for these changes. Doing so will help you comply with legal requirements while optimizing business processes, saving time, and reducing costs.
