Regulations for the registration of a Permanent Establishment of a Foreign Merchant

To apply the tax rules, a foreign merchant’s permanent establishment in Latvia is treated as a distinct inland taxpayer. A foreign business that has a permanent presence in Latvia must register with the SRS to become a taxpayer. To do business, a foreign merchant’s Latvian PE that is engaged in the inland supply of products or provision of services must first register with the SRS VAT Taxable Persons Register.

Requirements for foreign merchant permanent establishment

If all of the following requirements are met simultaneously, a foreign merchant is considered to have a permanent establishment in Latvia: 

  • the foreign merchant uses a fixed place of business in Latvia
  • the place of business is used for performing economic activity
  • the business is utilized permanently or has been developed to be used permanently

Regardless of the aforementioned requirements, a foreign merchant shall be deemed to have a permanent establishment in Latvia if it engages in at least one of the following activities: 

  • utilizes a construction site
  • performs construction, assembly, or installation works
  • or acts as a supervisor or consultant to the construction site or the aforementioned works
  • uses mineral research equipment, drilling platforms, and unique ships

Procedures for registering a Foreign Merchant’s (Non-resident) Permanent Establishment with the SRS

A foreign merchant (non-resident) must register a permanent establishment (PE) within ten days after the start of operations to do business in Latvia. A person authorized for representation in tasks relating to the registration of the PE may also register a PE. There are many ways to communicate with the SRS when submitting documents for a PE’s registration, including in person;

  • utilizing the SRS-assigned identifier and password to access the SRS Electronic Declaration System
  • using any of the authentication options provided by www.latvija.lv, such as the:
  • Internet banking system
  • electronic identification card (eID)
  • secure electronic signature (eSignature)
  • signing the documents electronically, and sending them to www.vid.gov.lv

A PE must be registered by the SRS no later than three business days after the SRS receives the paperwork needed for registration. The SRS public database will be updated with registration-related information.

Documents required for registration submission

The application must include the information listed below:

  • Principal data – name, registration code, phone number, address 
  • Data of the authorized person like:
  • Name
  • personal ID number
  • authorized person’s birth date
  • phone number
  • address 
  • Information on Current Accounts (in Latvian and Foreign Credit Institutions) 
  • Information on Founders 
  • Information on Officials Authorized to Sign 
  • Information on Beneficial Owners (if established)
  • Information on the main activity area
  • Consent of the legal possessor of the immovable property to the registration of the entity 
  • a copy of the document attesting to the foreign merchant’s registration in the relevant nation
  • a passport or ID card when presenting papers in person

Registering a structural unit

The following prerequisites must be satisfied before a structural unit may be registered:

  • the place where business operations are conducted for the business unit must be different from the registered location
  • the business unit must have a mobile application where customers can order and pay for products and services
  • the business must have a website where customers can order and pay for products and services.

Documents required to register a structural unit

There must be copies of the legal documents attesting to the structural unit’s right to use its premises when those premises are not located at the registered property. The owner or other legal possessor of the immovable property’s consent to the registration of the structural unit at the immovable property must also be available.

A personal establishment ceasing to operate

A PE must fulfill its tax responsibilities even if it chooses to stop doing business in Latvia. Specifically, this entails submitting tax returns and reports as required by tax rules and regulations, paying taxes, reporting the end of employee employment connections, and closing current accounts and structural units. After the decision to stop doing business has been adopted, this must be done within ten days.

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