Legislative Review May 8–14, 2026
ENERGY
– Amendments to the Law “On Environmental Impact Assessment”
– Calculator developed for calculating emissions and NRT for filling stations
– Energy Sector Review – April 2026
REGULATED RIGHTS
– Amendments to the Law on Accessibility of Goods and Services will introduce definitions in line with the European Union Directive
– Amendments to the Law on the Procurement of Public Service Providers improve a unified, efficient, and transparent procurement system
BANKING AND FINANCE LAW
– Amendments to the Consumer Rights Protection Law are intended to centralize the supervision of non-bank lenders and financial services within the Bank of Latvia, ensuring a unified and more efficient financial market regulation
– Municipal social services are granted the right to request bank account statements
FUNDS (PRIVATE WEALTH)
INTELLECTUAL PROPERTY (IP) & INFORMATION TECHNOLOGY (IT) & DATA PROTECTION
TAXES
– Draft Law: Law on Compensation for Legal Land Use Fees
– The CJEU recognized that a fixed late payment interest on VAT debt is a proportionate measure in accordance with EU law to ensure timely fulfillment of tax obligations
– The CJEU recognized that a subcontractor cannot adjust the VAT base for a claim against a developer acquired through assignment and not received
– Advocate General’s opinion on the application of tax to the transformation of a company without creating a new legal entity, in accordance with Directive 2008/7/EC
– SRS has published material on the wage tax booklet in the mobile app “MANS VID”
– SRS has updated the methodological material “Tax payment regimes for childcare service providers”
– SRS has updated the information material “Application of taxes to the income of professional athletes”
– Updated methodological material “Minimum compulsory state social insurance contributions
– SRS has updated the material “Personal income tax from the disposal of real estate income”
CUSTOMS
– Planned implementation of the eATA system and transition to the digitalization of the ATA Carnet
– SRS has published a reference “On the refusal of a reference and the provision of a reference regarding methanol of synthetic origin”
DISPUTE RESOLUTION
– Amendments to the Administrative Procedure Law
– Norms of the Jūrmala local plan, which determine the permissible building height on land property, do not comply with the Constitution
– The Senate annuls the judgment in the case regarding an apartment rental agreement and orders a full clarification of the will of the parties
– EU law prohibits financial compensation calculated based solely on the market value of the land at the time of the deletion of these rights from the Land Register
ENERGY
Draft Legislative Acts
Amendments to the Law “On Environmental Impact Assessment” (Draft Law No. 1349/Lp14)
Adopted in the 1st reading on May 14, 2026; Submitted for opinions until May 19, 2026.
In the Cabinet of Ministers meeting on April 28, 2026, the informative report “On the expediency of further application of the Law on the simplified procedure for the construction of energy supply structures necessary for the promotion of energy security and independence” was adopted, by which it was decided to recognize the Energy Security Law as invalid (Draft Law No. 1348/Lp14), while simultaneously determining that certain norms included in this law and recognized as effective are to be transferred to the Law “On Environmental Impact Assessment”.
In the future, the law will clearly define in which territories the construction of high-capacity wind power plants is generally permitted and clarify the cases in which it is necessary to perform an initial environmental impact assessment for the construction of a wind farm.
The law is scheduled to enter into force on July 15, 2026.
Industry News
Calculator developed for filling station emissions and NRT calculation (VVD: News)
The State Environmental Service (VVD) has developed an emissions and natural resource tax (NRT) calculation calculator for volatile organic compound emissions from filling stations (DUS).
The calculator allows the user, by entering information about the DUS address and fuel turnover in a specific period, to calculate the volume of emissions and the corresponding NRT amount. It is intended for the calculation of emissions and NRT generated by gasoline and diesel turnover.
Energy Sector Review – April 2026 (KEM: News)
The average electricity price in April was 23% lower than in March. April significantly strengthened the role of solar energy in Latvia’s energy balance, reducing the need for fossil fuels, especially natural gas, in electricity generation. In the spring of 2026, several new large-scale solar parks were connected to the grid, including projects by the company “Sunly” projects, which together provide 225 MW of capacity and account for approximately a quarter of the total volume of large solar projects in Latvia. At the same time, wind energy production also increased significantly – in April it almost doubled, rising from 14.4 GWh in March to 28 GWh, thereby further strengthening the dominance of renewable resources in electricity generation.
REGULATED RIGHTS
Draft Legislative Acts
Amendments to the Law on Accessibility of Goods and Services will introduce definitions in line with the European Union Directive (Draft Law No. 1339/Lp14)
Adopted in the 2nd reading on May 14, 2026
Amendments to the Law on Accessibility of Goods and Services will establish the necessary definitions that have not yet been transposed into Latvian legislation from Directive 2019/882. Specifically, the amendments to the law will introduce definitions for the terms “audiovisual media services”, “harmonized standard”, “technical specifikācija”, and “rail passenger transport services”.
Amendments to the Law on the Procurement of Public Service Providers improve a unified, efficient and transparent procurement system (Draft Law No. 1346/Lp14)
Adopted in the 2nd reading on May 14, 2026
The draft law “Amendments to the Law on the Procurement of Public Service Providers” was developed to harmonize the Law on the Procurement of Public Service Providers with amendments to the Public Procurement Law and to ensure a unified regulation throughout the public procurement system. It provides for clarifying the rules for the exclusion of candidates and applicants, their verification procedure, as well as regulation regarding subcontractors, contract amendments, administrative penalties, and green public procurement requirements. The aim of the amendments is to make the procurement process more efficient, flexible, and to prevent the application of different rules in various procurement procedures.
BANKING AND FINANCE LAW
Draft Legislative Acts
Amendments to the Consumer Rights Protection Law are intended to centralize the supervision of non-bank lenders and financial services within the Bank of Latvia, ensuring a unified and more efficient financial market regulation (Project ID: 26-TA-744)
Coordination concluded on May 8, 2026
Currently, non-bank consumer lenders are supervised by three institutions – the Bank of Latvia, PTAC, and the State Revenue Service. The amendments provide for integrating the supervision of non-bank consumer lenders and credit intermediaries into the Bank of Latvia. Furthermore, the Bank of Latvia will henceforth ensure the supervision of unfair commercial practices and advertising regarding services provided by financial market participants.
Simultaneously, amendments have been prepared for several related legislative acts to ensure unified application of the regulation, including the Law on Alternative Investment Funds and Their Managers, the Financial Instrument Market Law, the Law on Investment Management Companies, the Unfair Commercial Practice Prohibition Law, the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing, the Law on Accessibility of Goods and Services, the Payment Services and Electronic Money Law, the Advertising Law, the Law on International and National Sanctions of the Republic of Latvia, the Private Pension Funds Law, the Civil Procedure Law, and the Crowdfunding Services Law.
Municipal social services are granted the right to request bank account statements (Draft Law No. 1337/Lp14)
Submitted to the Saeima committee on May 14, 2026
Amendments to the Credit Institution Law provide that Credit Institutions may, upon request of a municipal social service, provide information regarding a natural person’s account statement as defined in the Account Register Law. The social service could receive information regarding an account statement for a time period of three to twelve full calendar months, information on monetary income and expenses during this time, and the account balance at the beginning and end of the period.
FUNDS (PRIVATE WEALTH)
Industry News
European Commission notice on the interpretation and application of specific legal norms of the Money Market Funds Regulation (EC Notice)
Published on May 13, 2026
The European Commission has prepared answers to frequently asked questions about money market funds (MMFs). The notice clarifies the norms that establish portfolio requirements that MMFs must take into account to ensure their liquidity and stability.
INTELLECTUAL PROPERTY (IP) & INFORMATION TECHNOLOGY (IT) & DATA PROTECTION
Draft Legislative Acts
Amendments to the Artificial Intelligence Center Law integrate the functions of the Artificial Intelligence Center Secretariat into the Center’s operations for more efficient and independent management (Draft Law No. 1341/Lp14)
Adopted in the 2nd reading on May 14, 2026.
At the time of the adoption of the Artificial Intelligence Center Law in 2025, the foundation “Artificial Intelligence Center” was still in the process of being established, therefore its secretariat functions were provided by the State Digital Development Agency. This solution was initially effective as it allowed the Center to quickly start operations without creating additional administrative infrastructure. However, the Center has now established its own team and operational processes, therefore it is necessary to review the existing model. The aim of the draft law is to stipulate that the Center itself provides the secretariat functions, thereby gaining greater control over resources and operational planning. This approach has also been conceptually supported by the Center’s board, and the Ministry of Smart Administration and Regional Development has expressed no objections. The amendments are necessary to adapt the regulation to the Center’s level of development and ensure more efficient performance of functions. The law is scheduled to enter into force on June 1, 2026.
TAXES
Draft Legislative Acts
Draft Law: Law on Compensation for Legal Land Use Fees (Project ID: 26-TA-978)
Adopted at the Cabinet of Ministers meeting on May 12, 2026
From January 1, 2025, with amendments to the State Real Estate Cadastre Law, two cadastral values were introduced. The transitional provisions of the law stipulate that the fiscal cadastral value is used for the calculation of taxes, state fees, and other payments into the state or municipal budget (thus also for the calculation of real estate tax). Consequently, in cases of forced divided property, in certain situations, the legal land use fee does not cover the real estate tax for land owners. This arises because the use fee is calculated from the universal cadastral value, but the tax – from the fiscal cadastral value. The Constitutional Court recognized that such a situation may disproportionately affect the property rights of land owners. Therefore, the draft law Law on Compensation for Legal Land Use Fees has been developed, which provides for a one-time state compensation for those land owners whose use fee is less than the real estate tax payable. The compensation will be administered by the State Land Service.
Case Law
The CJEU recognized that a fixed late payment interest on VAT debt is a proportionate measure in accordance with EU law to ensure timely fulfillment of tax obligations (Case No. C–544/24)
Judgment delivered on April 30, 2026
The Lithuanian tax administration found that the company had deducted VAT indicated in invoices without legal force and had participated in transactions related to VAT fraud. Sanctions were applied to the company: VAT EUR 6,517,901.36, late payment interest EUR 2,431,505.31, fine EUR 1,862,257. The company requested to be released from the late payment interest and fine, but the tax administration did not agree. The company considered the late payment interest to be disproportionate because it was calculated retroactively for the entire period from the moment the tax was due, including the periods of tax audits and legal proceedings. The company argued that the late payment interest should be considered a criminal penalty because it includes a punitive element, namely, the rate is increased by seven percentage points.
The national court turned to the Court of Justice of the European Union (CJEU) asking whether such Lithuanian national regulation complies with EU legal norms.
The CJEU recognized that Article 50 of the Charter is not applicable in a situation where an administrative process and a criminal process have been initiated for the same tax violation, and in both, neither a conviction nor an acquittal has been pronounced. Furthermore, the CJEU recognized that a regulation in which late payment interest on VAT debt is calculated at a fixed rate regardless of the severity of the violation, and the tax administration cannot reduce or cancel it except in cases specifically provided by law, complies with EU norms. Late payment interest is a necessary and proportionate measure to motivate taxpayers to fulfill their tax obligations in a timely manner and to prevent situations where non-payment of debt creates unjustified financial advantages. Its amount is related to the duration of non-payment of the debt and is not in itself considered excessive.
The CJEU recognized that a subcontractor cannot adjust the VAT base for a claim against a developer acquired through assignment and not received (Case No. T–233/25 Mokoryte SRL)
Judgment delivered on April 22, 2026.
The Developer entered into a contract with the Contractor for a business center project in Romania. The Contractor entrusted the construction work to the Subcontractor. The Developer became insolvent, and the Contractor remained in debt to the Subcontractor. During the legal proceedings, an agreement was reached on the payment of part of the debt, but for the remaining debt, the Contractor and the Subcontractor entered into an assignment agreement, as a result of which the Subcontractor acquired the right of claim against the Developer. The debts were not recovered, and the process of removing the Developer from the commercial register was initiated. In 2021, the Subcontractor issued 5 credit invoices to the Developer, canceling invoices for construction work performed in 2009. The tax administration did not allow the adjustment of the VAT payable.
The CJEU was asked whether Article 90 of the VAT Directive precludes the possibility that in contractual relations – arising from a contract followed by a subcontract – in which an assignment of claims occurs between the contractor and the subcontractor, whereby the subcontractor assignee acquires a claim against the final recipient of the works, the subcontractor assignee may adjust the VAT base.
The CJEU recognized that the VAT Directive precludes a subcontractor, who has acquired a claim through assignment that the contractor has against the developer under a contract, from adjusting the VAT base in the event that the developer has not paid this claim.
Advocate General’s opinion on the application of tax to the transformation of a company without creating a new legal entity, in accordance with Directive 2008/7/EC (Case No. C–197/25, A. sp. z o.o)
Opinion delivered on April 23, 2026.
Case regarding the application of Directive 2008/7/EC concerning indirect taxes on the raising of capital.
The case examines a situation where a limited partnership is transformed into a general partnership. Applying the principle of continuity, which according to Polish law is applicable to this type of transaction and according to which the same legal entity remains in the event of a company transformation, no new legal entity was created as a result of the transaction, but only the legal form of this company was transformed by amending the founding document.
The Polish tax authority taxed the transformation transaction with a tax on civil law transactions. The said authority considered that if the assets of the transformed partnership exceed the assets of the limited partnership, this increase must be taxed with the tax on civil law transactions, as the said tax has not been applied previously. Thus, the Polish tax authority taxed the difference between the value of the assets invested in the general partnership and the value of the limited partnership’s assets previously taxed.
The Advocate General recognized that if Member States decide not to consider the legal entities mentioned in Article 2(2) of this Directive as capital companies for capital tax purposes, they retain the freedom to determine the legal framework for taxing the said legal entities (i.e., the tax in this situation does not contradict Directive 2008/7/EC).
Industry News
SRS has published material on the wage tax booklet in the mobile app “MANS VID” (SRS: News)
The State Revenue Service informs that the mobile app “Mans VID” provides the opportunity to conveniently and securely, directly from a personal smart device, manage one’s wage tax booklet.
SRS has updated the methodological material “Tax payment regimes for childcare service providers” (Informative material)
According to the amendments to the Law “On State Social Insurance” of April 16, 2026, which entered into force on May 6, 2026, minimum compulsory state social insurance contributions are not calculated for a self-employed person from January 1, 2026. In view of the above, the sections of the methodological material: “Taxes from economic activity” and “Micro-enterprise tax” have been changed and supplemented.
SRS has updated the information material “Application of taxes to the income of professional athletes” (Informative material)
According to the Sports Law, a professional athlete is a natural person who, on the basis of an employment contract and for the agreed remuneration, prepares for and participates in sports competitions. From the athlete’s employment income, the employer calculates, withholds, and pays into the budget compulsory state social insurance contributions (VSAOI) and personal income tax (IIN). The material explaining its application has been updated.
Updated methodological material “Minimum compulsory state social insurance contributions (Informative material)
The methodological material has been updated in accordance with the “Amendments to the Law “On State Social Insurance”” adopted on April 16, 2026, which were published in the official gazette “Latvijas Vēstnesis” on May 5, 2026, and entered into force on May 6, 2026. Namely, for the social insurance period starting from January 1, 2026, self-employed persons will no longer be calculated minimum compulsory state social insurance contributions. Therefore, in the future, it will not be necessary to submit a certification of planned income in the Electronic Declaration System of the State Revenue Service.
SRS has updated the material “Personal income tax from the disposal of real estate income” (Informative material)
The material has been updated according to the situation in 2026. The changes made mainly concern the application of the consumer price index (CPI), as well as the clarification of dates and deadlines in the examples.
CUSTOMS
Industry News
Planned eATA system implementation and transition to ATA Carnet digitalization (SRS: News)
Planned to start implementation on June 1, 2026
2026. On June 1, European Union member states, including Latvia, together with Norway, Switzerland, and the United Kingdom, will begin the implementation of the eATA Carnet system developed by the International Chamber of Commerce, gradually replacing the current use of the ATA Carnet in paper format. To ensure a gradual transition to the new solution, a transition period is planned from June 1, 2026, to December 31, 2027, during which both paper-format ATA Carnets and eATA Carnets will be used simultaneously.
SRS has published a reference “On the refusal of a reference and the provision of a reference regarding methanol of synthetic origin” (Reference)
The company turned to the SRS with a request to evaluate the possibility of moving methanol of synthetic origin between two adjacent free zones via a stationary pipeline. Currently, the product is moved by rail tankers or in containers on a rail platform using the rail trestle of SIA “BBB”, applying the transit customs procedure and then releasing the product for free circulation. The new solution would involve pumping methanol via a pipeline from the tank of SIA “BBB” to the applicant’s tank.
The applicant asked the SRS to clarify whether the creation of a pipeline between the two free zones is permissible; what customs procedure would be applicable to such movement; what accounting and supervision requirements should be observed; whether and what excise supervision would be applicable to the movement and storage of methanol of synthetic origin in such a solution.
The SRS refused to provide a reference for part of the questions because they concerned the rights and obligations of another person – the declarant of the transit procedure SIA “CCC” – rather than the applicant’s own legal situation. Furthermore, some of the questions were general and did not meet the conditions for providing a reference.
The SRS explained that the accounting of the free zone must ensure the information on the product and its movement as specified in the legislative acts. Evaluating the “KRAVAS” system, the SRS concluded that the necessary data are already being accounted for, while in the case of movement via pipeline, the mark “pipeline” must be indicated in the column “Transp.reģ.nr.”. The SRS also pointed out that the movement of methanol via pipeline within the framework of the transit procedure takes place under customs supervision, therefore additional excise supervision requirements are not applicable. The SRS provided answers to the remaining questions in accordance with the procedure established in the Law on Submissions.
DISPUTE RESOLUTION
Draft Legislative Acts
Amendments to the Administrative Procedure Law (Draft Law No. 1353/Lp14)
Submitted to the Saeima on May 14, 2026
In administrative proceedings, the court maintains case files in the e-case court information system. To ensure the possibility for courts to fully adapt to changes in the case management process, the draft law extends the deadline of the transitional provisions of the Administrative Procedure Law until May 31, 2027.
Case Law
Norms of the Jūrmala local plan, which determine the permissible building height on land property, do not comply with the Constitution (Case No. 2025-11-03)
Judgment delivered on May 12, 2026.
The court recognized the local plan of the Jūrmala state city municipality as non-compliant with the Constitution insofar as it allows a building height of up to 20 meters and five floors at Turaidas iela 10/12, Jūrmala. The case was initiated following an application by the Jūrmala Protection Society, stating that the Jūrmala City Council had not justified a significant public benefit from the increased building height in the local plan.
The Constitutional Court concluded that the local plan does not comply with the Jūrmala territory plan and development strategy because the building height was not based on objective calculations. The court also emphasized that the National Cultural Heritage Board did not support the proposal, as it could diminish the value of the cultural monument. Consequently, the court recognized that the local plan violates the principle of mutual consistency, the principle of sustainability, and the right of every person to live in a favorable environment, which stems from Article 115 of the Constitution.
The Senate annuls the judgment in the case regarding an apartment rental agreement and orders a full clarification of the will of the parties (Case No. SKC-411/2026)
Judgment delivered on April 29, 2026.
The tenant entered into a residential lease agreement for a fixed term, agreeing that no rent would be paid for the use of the premises. During the term of the lease agreement, the lessor entered into a gift agreement with the Plaintiff and gifted him the apartment property rented by the Tenant. To achieve the eviction of the defendant and her daughter from the apartment, the Plaintiff brought an action in court, arguing that the concluded lease agreement is actually a gratuitous loan agreement and is not binding on the Plaintiff because it had not been entered in the Land Register. The District Court partially satisfied the claim, while the Regional Court dismissed it, recognizing the lease agreement as legally concluded and valid, as well as binding on the new owner of the apartment.
The Senate recognized that the appellate court had not sufficiently evaluated the true will of the parties and the legal nature of the agreement, emphasizing that a lease agreement requires remuneration, and the covering of utility payments in itself is not rent. The court also pointed out that it must be evaluated whether the agreement is not a simulated transaction and whether the new owner acted in accordance with the principle of good faith.
EU law prohibits financial compensation calculated based solely on the market value of the land at the time of the deletion of these rights from the Land Register (Case No. C-286/25)
Judgment delivered on May 13, 2026.
2013. In 2014, Hungary adopted a regulation by which agricultural land use rights were deleted for persons without a kinship link with the land owner; however, it was later recognized as non-compliant with EU law, acknowledging that it violated the principle of free movement of capital and the right to property. Subsequently, a compensation system was introduced allowing any natural or legal person whose use rights had been deleted from the Land Register to request the restoration of these rights in the Land Register and receive financial compensation. Hungarian legislation provides that compensation is calculated as follows: 1/20 of the market value of the property on the day of deletion, multiplied by the number of years that have passed between deletion and restoration. A Hungarian company achieved the restoration of its use rights; however, considering that this compensation is not adequate for the damage caused to the company, it brought an action in a national court. The national court asked the Court of Justice of the European Union (CJEU) whether Union law precludes national rules that limit compensation to financial compensation calculated based solely on the market value of the property at the time of the deletion of the use rights.
The CJEU concluded that such an approach is not sufficient because it does not take into account potential loss of profit from the use or leasing of the land. Member States have discretion to determine the criteria for determining the amount of compensation; however, the complete exclusion of loss of profit from the scope of compensable damages can practically make it impossible to compensate for the damage suffered. The court emphasized that compensation must be proportionate to the damage actually caused and must effectively protect the rights of persons.
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VIKTORIJA Cherkas
PARTNER, ATTORNEY AT LAW
Viktorija is a Latvian legal expert recognized by international directories in project management and mergers and acquisitions (M&A), including energy projects (development of wind and solar park projects).
Viktorija also provides legal advice for day-to-day business operations – from company formation, management, shareholder relations, restructuring, and other business-related matters. At the same time, Viktorija is an expert in real estate development, acquisition, and leasing, and provides assistance to individuals and companies regarding relocation or property acquisition in Spain.
ALISA LEŠKOVIČA
PARTNER, ATTORNEY AT LAW
Alisa is an experienced advocate and a partner at RockBridge Legal. Since 2008, Alisa has advised clients and provided legal assistance in complex tax and customs matters.
Alisa also specializes in anti-money laundering (AML), sanctions, and compliance matters. Alisa has significant experience in corporate crime and investigation cases related to tax, customs, and sanctions issues.
Viktorija Jarkina-Toča
PARTNER, ATTORNEY AT LAW
Dr. iur. Viktorija Jarkina is a partner at RockBridge Legal, ranked by international legal directories Chambers Europe, Chambers Global, Best Lawyers, and Legal 500 among the leading criminal defense attorneys in Latvia.
Viktorija specializes in shareholder disputes, civil and commercial litigation, as well as criminal law, providing representation and defense in white-collar crime cases, including money laundering and environmental offenses. Additionally, Viktorija has extensive experience working with franchises, providing full legal assistance related to franchising.