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 October 26, 2026.

This article covers:

• Tax settings
  • Display product prices including VAT
  • Display product prices excluding VAT
• 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
  • Selling with a country-specific registration
• Selling goods outside the EU
• Invoices
• 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 with VAT included:

1. In your Shopify admin, go to Settings → Taxes and duties.
2. In the Additional configuration section, turn on 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 Markets and click the market you want to configure.
2. In the Inherited section, click the + icon next to Taxes and duties.
3. Under Tax display, select Dynamic tax display, 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 Markets and click the market you want to configure.
2. In the Inherited section, click the + icon next to Taxes and duties.
3. Under Tax display, select Show as line item, 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.

If you’re VAT-registered and selling goods to customers in Latvia—whether they’re businesses (B2B) or consumers (B2C)—you must 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 cross-border B2C sales to other EU countries (distance sales of goods plus telecommunications, broadcasting, and electronic services) stay at or below €10,000 (excluding VAT) in both the current and the previous calendar year, you can charge Latvian VAT on those sales.

This rule only applies if your business is established only in Latvia and your goods are shipped from Latvia.

No application or approval is needed—simply set up your tax settings in Shopify admin. This only needs to be done once.

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 Settings → Taxes and duties.
2. In the Tax regions 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 the current or the previous 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 Settings → Taxes and duties.
2. In the Tax regions 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.

You need a local VAT registration in another EU country if you make taxable sales there that OSS doesn’t cover, for example, if you store stock in that country and ship to customers from there. In that case, you can no longer use the €10,000 threshold.

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 a local VAT registration number:

1. In your Shopify admin, go to Settings → Taxes and duties.
2. In the Tax regions section, click European Union.
3. In the Collect VAT in an EU country section, click Collect in another location if you already have a registration.
4. Select the 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 update it later.
5. Click Collect VAT to save your changes.

The country must be part of one of your shipping zones before you can add it as a tax region. If you can’t select it, create a shipping zone first:

1. In your Shopify admin, go to Settings → Shipping and delivery.
2. In the Shipping profiles section, click the profile you want to add the zone to (for example, General profile).
3. In the Shipping zones section, click + 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.