Set up Latvian taxes in your Shopify store

Correct VAT calculation on a Latvian Shopify store depends primarily on your VAT-registered status.

Latvia applies a single standard VAT rate domestically, but the rate and registration requirements change once you sell to customers in other EU countries, depending on your turnover and the type of customer you're selling to.

This guide walks you through how to configure tax settings and tax rates in Shopify so you charge the correct VAT to every customer.

Once your tax settings are correct, Sufio, an invoicing app for Shopify stores, automatically generates compliant invoices with the right VAT breakdown for every order.

Last updated on July 31, 2026.

This article covers:

• Tax settings
• Tax rates in Latvia and the EU
• Selling goods to customers in Latvia
  • My business is not VAT registered
  • My business is VAT registered
• Selling goods to customers in other EU Member States
  • Selling as a micro-business
  • Surpassing the micro-business threshold
  • Country-specific registration
• Selling goods outside the EU
• Where to find further information

As a Latvia-based store, you can choose how VAT is displayed in your product prices, depending on whether you sell mainly to consumers or to businesses.

Shopify gives you two configurations to pick from.

For B2C sales, displaying prices with VAT included shows shoppers the exact amount they'll pay at checkout.

To display your product prices including VAT but still allow your business customers to have VAT deducted at checkout:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Global settings section, check Include sales tax in product price and shipping rate.
3. Click Save to apply the changes.

Optionally, you can enable dynamic tax inclusion. This Shopify feature automatically includes or excludes the tax based on the customer's region and adjusts the tax rate accordingly.

To activate dynamic tax inclusion:

1. In your Shopify admin, go to Settings → Markets, and select the market you want to configure for tax collection.
2. Click Duties and taxes, then click Edit next to Storefront and checkout pricing.
3. Under Domestic taxes, select Dynamic taxes, then click Done.
4. Click Save to apply the changes.

In case your customers are mostly businesses (B2B), you can choose to have your product prices displayed as excluding VAT.

To display your product prices excluding VAT:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Global settings section, uncheck Include sales tax in product price and shipping rate.
3. Click Save to apply the changes.

You can also disable dynamic tax inclusion if you'd rather keep prices consistently VAT-excluded across all markets:

1. In your Shopify admin, go to Settings → Markets, and select the market you want to configure for tax collection.
2. Click Duties and taxes, then click Edit next to Storefront and checkout pricing.
3. Under Domestic taxes, select Don't add taxes, then click Done.
4. Click Save to apply the changes.

As of 2026, the standard VAT rate in Latvia is 21%.

Certain goods and services qualify for reduced VAT rates of 12% or 5%, while others are subject to a 0% VAT rate under the Latvian VAT Act.

When selling goods to customers in Latvia—whether they're businesses (B2B) or consumers (B2C)—you must always charge Latvian VAT.

If your business isn't VAT registered, you don't charge VAT, and you can't include VAT on your invoices until you register.

Most businesses start unregistered. You must register for VAT once your taxable turnover exceeds €50,000 in a calendar year—or you can register voluntarily before then.

If your Latvia-based business is VAT-registered, the VAT you charge depends on where your customer is located.

When selling goods B2B to other EU Member States, these sales are zero-rated: you still show VAT on your invoices, but at 0%.

Under the reverse-charge mechanism, the customer accounts for the VAT themselves.

When selling goods B2C to other EU Member States, you do charge VAT, but the rate depends on whether your sales breach the micro-business threshold.

If your taxable turnover during a calendar year outside your home country but still within the EU does not surpass a threshold of €10,000 (excluding VAT), you qualify for the micro-business exemption.

Once you apply for it at your local tax authority, you will charge the VAT rate of the country your business is based in.

To use this scheme, apply for the exemption with your local tax authority; you'll only need one VAT registration within the EU, set up once in your Shopify admin.

To set VAT rates for the micro-business exemption scheme and charge your home country's VAT rate on all orders:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Regional settings section, click European Union.
3. In the Collect VAT cross-border section, click Collect VAT.
4. In the Collect across the EU window, select Collect using your home country registration.
5. Select your Country of registration and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet; you can add it later.
6. Click Collect VAT to save your changes.

Once your combined sales to other EU Member States in a calendar year exceed €10,000 (excluding VAT), you must charge the VAT rate of the country you're shipping to.

In practice, this means customers in different EU countries will be charged different VAT rates, ranging from 17% to 27%.

Registering for VAT separately in each EU country you sell to is time-consuming.

In this case, you can choose to use the One-Stop Shop (OSS) Union scheme, which means you still charge VAT at the rate of the country where you are selling, but you only have to report on one OSS VAT return.

Shopify lets you set up these tax settings for individual VAT registrations and automatically charges the correct tax to your EU customers.

To charge your customers abroad the correct VAT rate, set your tax settings accordingly. Shopify lets you select OSS as your VAT registration type, so the right rate is applied automatically.

To set VAT rates for the OSS scheme and charge your customers' shipping-country VAT rate on all orders:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Regional settings section, click European Union.
3. In the Collect VAT cross-border section, click Collect VAT.
4. In the Collect across the EU window, select Collect using a One Stop Shop (OSS) registration.
5. Select your Country of OSS registration and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet; you can add it later.
6. Click Collect VAT to save your changes.

Now, your customers' shipping country VAT rates automatically apply to all EU sales.

Some businesses choose to keep a separate VAT registration for each EU country they ship to.

If that's your situation, you can add a local VAT registration number for any additional country in Shopify, and the correct VAT rate will be applied automatically based on that registration.

To add the local VAT registration number:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Regional settings section, click European Union.
3. In the Collect VAT in an EU country section, click Collect in another location.
4. Select the Registration country and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet; you can add it later.
5. Click Collect VAT to save your changes.
6. To add registration numbers for additional countries, repeat by clicking Collect VAT in an EU country and confirming with Collect VAT.

If you can't select an additional country you're VAT-registered in, you may need to create a shipping zone first:

1. In your Shopify admin, go to the Settings → Shipping and delivery page.
2. In the Shipping section, click the shipping profile you want to add zones to.
3. In the Shipping zones section, click Add shipping zone.
4. Name the zone, add the country (or countries) you're VAT-registered in using the search bar, and click Done.
5. Add shipping rates to make the zone available.
6. Click Save to apply the changes.

If you're selling goods from Latvia outside the EU, whether B2B or B2C, these sales are exempt from VAT. This means you don't charge VAT on your invoices.

Once your tax rates are set up correctly, Sufio automatically generates and sends valid invoices with an accurate VAT breakdown for every order.

For personalized advice based on your specific business situation, consider consulting a tax professional or accountant who specializes in VAT and ecommerce.