Legislative Review May 1 – May 7, 2026
COMMERCIAL AND CORPORATE LAW
– Dismissal of a cooperative society’s board and recognition of the election of a new board as lawful
– Annulment of the decision to terminate an association’s activities after regularizing the board composition
ENERGY
– The Cabinet of Ministers (CM) supports the developed support program for strengthening energy infrastructure
– The Cabinet of Ministers (CM) supports the program for the creation of two new biomethane injection points in Ragana and Rēzekne
REGULATORY LAW
– Seeking to reduce bureaucracy and administrative burden in the field of public benefit
ENVIRONMENTAL LAW
TAXES
– Plans to simplify tax regulation and strengthen supervision in the digital environment
– Useful information on work during summer holidays for students and their parents
– SRS has updated various methodological materials, taking into account the adopted amendments to the Law “On State Social Insurance”
– SRS binding ruling: “Application of VAT when transferring goods for sale”
– SRS binding ruling: “Procedure for issuing a tax invoice when providing a long-term service”
– SRS binding ruling: “Application of VAT norms to transfer pricing adjustments”
DISPUTE RESOLUTION
COMMERCIAL AND CORPORATE LAW
Case law
Dismissal of a cooperative society’s board and recognition of the election of a new board as lawful (Decision No. 1-5n/54)
Adopted on April 2, 2026
At an extraordinary general meeting of the society’s members on January 9, 2026, a decision was made to dismiss the previous board and elect a new board, as well as to approve amendments to the statutes. Former board members of the cooperative society submitted an application contesting the registration of the board change and the statutory amendments. The applicants claimed that the decision was made in violation of the number of votes specified in the statutes and that the minutes incorrectly stated their position as “Chairman of the Board,” although most were only board members. The Register concluded that it is not within its competence to verify the actual existence of members’ voting rights or the circumstances of the meeting, as this is a matter for the court. It was also found that the society’s statutes contained contradictory provisions regarding the number of votes required to dismiss the board; therefore, these parts were deemed non-existent. Consequently, the general principle was applied that a decision is to be made by a simple majority of the members present, which was observed in this case. The Chief State Notary recognized that the error in the job title in the minutes was not significant and did not affect the clear expression of the meeting’s will. Therefore, it was decided not to annul the previous decision on the board change and statutory amendments, and to recognize the appointment of the new board members as lawful.
Annulment of the decision to terminate an association’s activities after regularizing the board composition (Decision No. 1-5n/63)
Decision adopted on April 29, 2026
An apartment owners’ association submitted a request to annul a previously adopted decision to terminate the association’s activities. As early as 2025, the Register of Enterprises had established that the association’s board had lacked representation rights for more than two years and sent a warning regarding the need to elect a new board. Since the documents were not submitted within the specified deadline, a decision was made to terminate the association’s activities.
Later, the association submitted applications and documents confirming its desire to continue operations and regularize the board composition, as the members planned a building renovation. The Register initially identified deficiencies in the documents, but after they were rectified, the new board was registered in April 2026.
The Chief State Notary recognized that the original decision to terminate activities was lawful and reasonably adopted, as all legal prerequisites were met at that time. However, it was concluded that the association is actually continuing active operations and has rectified the previously identified deficiencies. Based on the principle of good governance and the Administrative Procedure Law, a decision was made to annul the termination of the association’s activities. As a result, the association can continue its operations with the new board.
ENERGY
Regulatory acts
The Cabinet of Ministers (CM) supports the developed support program for strengthening energy infrastructure (Project ID: 25-TA-1669)
Adopted at the CM meeting on May 5, 2026
EU fund resources are planned to be invested in the construction of new power lines or the reconstruction of existing lines, increasing the power system connection capacity at two substations, as well as for the purchase of generators and mobile substations.
Support will be provided to the joint-stock companies “Sadales tīkls” and “Augstsprieguma tīkls,” which ensure the operation of the electricity distribution and transmission systems throughout Latvia. The total funding for the support program is EUR 36,470,589, of which 85% consists of EU fund financing and 15% is national co-financing. Project implementation is planned until December 31, 2030.
The Cabinet of Ministers (CM) supports the program for the creation of two new biomethane injection points in Ragana and Rēzekne (Project ID: 25-TA-1670)
Adopted at the CM meeting on May 5, 2026
The total funding for the project is EUR 4,705,883, of which EUR 4,000,000 consists of EU fund financing and EUR 705,883 is national co-financing provided by Conexus. The new injection points in Ragana and Rēzekne will be created using the virtual pipeline principle already tested in Latvia – biomethane will be compressed and transported in containers from various regional producers to the injection point. The construction of both biomethane injection points will be implemented by the unified gas transmission and storage system operator AS “Conexus Baltic Grid” (Conexus). Project implementation is planned until December 31, 2029.
REGULATORY LAW
Draft regulatory acts
Seeking to reduce bureaucracy and administrative burden in the field of public benefit (Project ID: 25-TA-2976)
Submitted for public consultation from April 29, 2026, to May 13, 2026
The amendments to the Law on Public Benefit Organizations are intended to simplify the procedure for approving the personnel of the Public Benefit Commission, delegating this function to the Minister of Culture in the future. At the same time, it is planned to transition to electronic communication with public benefit organizations. The draft law also provides for the elimination of unnecessary administrative actions in cases where the name or legal address of a public benefit organization changes. Additionally, the regulation regarding the procedure by which public benefit organizations provide information on their activities is being clarified, establishing that the necessary information must be included in the management report of the annual account and submitted electronically.
ENVIRONMENTAL LAW
Industry news
MEC and SES strengthen cooperation with municipalities and seek solutions in spatial planning matters (News)
At the end of April, the State Environmental Service (SES) and the Ministry of Climate and Energy (MEC) met with representatives of municipalities to agree on a common approach to assessing environmental protection aspects in the spatial planning process. During the meeting, topics relevant to municipalities in spatial planning were discussed, including wastewater management requirements in densely populated areas, and the regulation of protection zones for coasts, rivers, polluted sites, and water intake points. Municipal solution options within the framework of the regulatory environment were also analyzed.
TAXES
Draft regulatory acts
Plans to simplify tax regulation and strengthen supervision in the digital environment (Project ID: 25-TA-2335)
Submitted for public consultation from April 30, 2026, to May 14, 2026
Amendments to the Law “On Taxes and Duties” provide for the regularization of terms used in the law and the exclusion of norms that are no longer relevant or are not applied in practice. At the same time, the duties of taxpayers and the administration are being clarified. It is planned to introduce the possibility of preparing warnings electronically without an official’s signature in certain cases, thereby reducing the administrative burden. The amendments also provide for modernizing the regulation of e-commerce supervision, establishing an appropriate procedure for the regulatory framework on restricting illegal online content and requesting information from intermediary service providers, including regarding the restriction of domain name operations and blocking access.
Industry news
Useful information on work during summer holidays for students and their parents (SRS: Current Events)
Information updated on the SRS website on May 6, 2026.
The SRS informs that in 2026, parents still have the right to retain tax relief for children who work only during the summer holidays, are under 19 years of age, and are studying at a general, professional, higher, or special educational institution.
SRS has updated various methodological materials, taking into account the adopted amendments to the Law “On State Social Insurance” (regarding minimum mandatory contributions)
According to the amendments to the Law “On State Social Insurance,” which entered into force on May 6, 2026, starting from January 1, 2026, minimum mandatory contributions will no longer be calculated for the self-employed, and they do not need to submit an application regarding planned income. The aforementioned legislative amendments mean that recipients of royalties whose planned quarterly income in 2026 will not exceed EUR 2,340 no longer need to submit the SRS “Self-employed person’s certification of planned income.”
In this regard, the material “Self-employed person’s state social insurance mandatory contributions 2026” (methodological material) has been updated, and the material “Taxes on Royalties” (methodological material) has been updated by deleting the section on minimum state social insurance mandatory contributions.
Additionally, the material “Micro-enterprise tax” (methodological material) has been updated.
SRS binding ruling: “Application of VAT when transferring goods for sale” (SRS: Current Events)
Published on May 6, 2026.
The company is engaged in wholesale and wishes to distribute goods through customers’ stores, retaining ownership of the goods until they are sold. The goods are transferred to the customer for sale without initial VAT application; the customer stores and sells them to end buyers, but settlement and VAT application are intended only for the goods actually sold at the end of the month.
The applicant wished to clarify, firstly, whether the applicant is allowed not to pay VAT to the budget from the initial delivery of goods intended for sale if the ownership of the goods is not transferred to the customer but remains with the applicant. Secondly, whether the provisions of the Value Added Tax Law will be applied correctly if the tax invoice for the sold goods is issued once a month at the end of the month and VAT is paid according to the tax invoice only for the sold goods.
In its response, the SRS states that the VAT Law does not provide for a specific type of transaction called “transfer of goods for sale,” so general rules must be applied. The SRS also points out that in the planned situation, the Value Added Tax Law does not provide that the applicant (supplier of goods) would have the right to issue a
tax invoice to the customer (recipient of goods) once a month at the end of the month only for
the goods sold rather than for all the goods transferred.
SRS binding ruling: “Procedure for issuing a tax invoice when providing a long-term service” (Binding Ruling)
Published on May 6, 2026
The applicant is engaged in forestry and leases forest and agricultural land belonging to them. Lease agreements are mainly concluded for 12 months, and in some cases for 5 years. The possibility of issuing one invoice for the entire 12-month period is being considered. Therefore, the applicant wishes to clarify whether such an invoice may be issued and whether it complies with the requirements of the Accounting Law and the Value Added Tax (VAT) Law.
In its response, the SRS states that accounting regulations do not prohibit issuing one invoice for a longer period. However, according to the VAT Law, issuing one tax invoice for a 12-month period is permissible and does not violate the regulation of Section 32 of the VAT Law if the transaction corresponds to what is specified in the fourth paragraph of this section. Conversely, in cases where a service is provided continuously over a long period, including a real estate lease service for 12 months, but it is not covered by the fourth paragraph of Section 32 of the VAT Law, the regulation of the third paragraph of this section is applicable. Namely, the period of service provision may not be longer than six months; therefore, a tax invoice must be issued at least once every six months, meaning at least two tax invoices must be issued in a 12-month period.
SRS binding ruling: “Application of VAT norms to transfer pricing adjustments“ (Binding Ruling)
Published on May 6, 2026.
The applicant produces gas springs for related companies and in 2025 issued invoices for transfer pricing adjustments to companies in Sweden, Denmark, and the United Kingdom. The amounts were calculated using the transactional net margin method, taking into account the planned segmentation of the profit or loss account in 2025, where the achieved operating profit margin in each segment of related transaction partners is calculated. The applicant wishes to clarify whether these transfer pricing adjustment amounts are subject to VAT and should be indicated in the VAT declaration, as well as how they should be reflected in the annual account.
In its response, the SRS states that if a transfer pricing adjustment is made that is not attributable to any specific delivery of goods or provision of services and that adjusts the overall annual result of a related foreign company in accordance with the company’s transfer pricing policy, the provisions of the VAT Law are not applicable to such a transfer pricing adjustment and it does not need to be indicated in the VAT declaration. In the applicant’s case, such income must be shown in the annual account under the profit or loss account item “Other operating income.”
DISPUTE RESOLUTION
Regulatory acts
Amendments to the Law “On State Compensation to Victims” provide for a fairer and clearer procedure for granting state compensation (Promulgated version)
Entered into force on May 19, 2026
The amendments increase the maximum amount of state compensation from five to six minimum monthly salaries. The law also clarifies which persons can receive state compensation if a person has died due to a criminal offense. Additionally, it is established that henceforth, if several crimes of the same type are identified in one criminal proceeding, state compensation will be determined in a larger percentage amount, not exceeding the maximum set by law. Furthermore, a special procedure has been established for the payment of compensation to victims who are in places of imprisonment, preventing funds from falling into the hands of third parties.
Regulation for the protection of persons involved in the public interest against unfounded legal proceedings enters into force (Promulgated version)
Entered into force on May 7, 2026
The Law on Persons Involved in the Public Interest applies to all persons acting in the public interest and against whom a court claim may be brought with malicious intent in connection with their activities in the public interest. Such a claim is brought to prevent or restrict this person’s activities in the public interest or to punish the person for it, usually using a superiority of financial resources or other types of influence, rather than to genuinely defend one’s infringed or contested civil rights or legally protected interests in court. The law specifies signs that may indicate the bringing of such a claim. If a claim has been brought against a person in connection with their activities in the public interest and the court has initiated a civil case, then the law provides protection options for this person, for example, asking the court to order the plaintiff to pay security in the amount of reasonably foreseeable litigation costs. Additionally, the law increases penalties for the dishonest use of rights in court, and the court will be able to apply a fine for bringing a malicious claim.
Need help? Contact us
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.