Latvia: Amendments to law on excise tax, application of excise tax to distance sales

Amendments to law on excise tax introduce changes to application of excise tax

Amendments to law on excise tax introduce changes to application of excise tax

Amendments to the law on excise tax introduce changes to the application of excise tax to distance sales of excise goods.

The purpose of the amendments is to align the excise tax law with the new EU Directive 2020/262/EU, which will supersede the existing Directive 2008/118/EC. The amendments would become effective the same date as the new EU Directive, 13 February 2023.

In particular, the amendments would introduce an equivalent application of excise tax to supplies of alcoholic beverages delivered to Latvia by way of distance sales (currently applicable only to coffee and non-alcoholic beverages and alcoholic beverages).

According to the amendments, payment of excise tax in Latvia will be the responsibility of the supplier of goods—a person of another member state or a Latvian representative appointed by the taxpayer. Tax will be applied at rates in force in Latvia according to the local payment procedure.

KPMG observation

Note that the new law would also apply to those Latvian companies that deliver excise goods from Latvia to individuals in other member states. Latvian suppliers will need to pay excise tax in the member state where their customer is located in accordance with the rules on excise tax applicable in that member state. If excise tax on goods supplied to individuals in another member state has been already paid in Latvia, it will be possible to recover it according to the procedure specified in the law.

Read a December 2022 report prepared by the KPMG member firm in Latvia


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