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The Latvian Ministry of Finance is driving a significant change in the country's business landscape by implementing mandatory electronic invoicing, with a strategic roadmap that aims to streamline operations and enhance transparency nationwide.
From 1 January 2028, mandatory electronic invoicing (e-invoicing) will be fully enforced for all applicable taxpayers involved in business-to-business transactions in Latvia. This marks the second delay to the implementation timeline for e-invoicing. The original deadline for structured e-invoices was 1 January 2025, before being pushed back to 1 January 2026. It's important to note that electronic invoicing has been mandatory for transactions with state budget institutions (also known as business-to-government, or B2G, transactions) since 1 January 2025.
The current three-year extension of the B2B deadline is intended to give small businesses, the self-employed, religious and public organisations, and other companies sufficient time to prepare technologically and organisationally for the full adoption of e-invoicing.
“As we observed during the implementation of the B2G mandate on 1 January 2025, the government e-invoicing system did not support all use cases, invoice types and exemptions. Additionally, the existing system architecture does not seem to be optimally suited to larger data volumes. A redesign or scaling strategy will most likely be revisited during the additional two years in order to improve performance. Of course, we also still have to implement a significant number of changes to the legal setup, adjust operational procedures for businesses and government sectors alike, and undertake technical preparations. Furthermore, time will be needed to create an adequate level of support, communicate the practicalities of e-invoicing effectively, and allow the economy to accept and adapt to the changes.” Edgars Strazds, Banqup Latvia.
This initiative is geared towards streamlining operations, fostering transparency, and tackling the grey economy.
In late January 2024, Latvia introduced an extensive four-year strategy designed to combat the informal economy effectively. A key component of this strategy involves encouraging non-cash transactions, with a particular emphasis on e-invoicing.
E-invoicing for government transactions (B2G has been in place since January 2025. The 2028 rollout will expand the mandate to include business-to-business (B2B) transactions, with the structured “Peppol” invoice, following the European norm (EN 16931), anticipated as the default, according to the Ministry of Finance.
In line with the European Commission’s VAT in the Digital Age (ViDA) proposal, the Latvian Ministry has also foreseen real-time reporting of invoicing data.
The business benefits
The Latvian government has outlined two key benefits of electronic invoicing for B2B and B2G transactions.
Time
The transition to e-invoicing will reduce the need for manual tasks, minimise invoice errors and speed up the delivery of invoices to accounting and tax departments. Overall, these benefits will decrease the time spent on administrative work, although the exact impact will depend on the specifics of the e-invoice system developed.
Costs
Invoicing costs are expected to decrease due to the shift towards electronic processes, rather than physical paper-based processes. There will be a reduction not only in paper, but also in the costs associated with print and post.
Additionally, the reduction in the risk of invoice errors and the faster delivery of invoices to accounting and the tax administration will reduce overall labour costs.
Next steps
The process of introducing e-invoicing in Latvia is currently still in its preparatory stage, with a B2G mandate launched and B2B implementation underway.
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