Legislative Review July 10–16, 2026
COMMERCIAL AND CORPORATE LAW
ENERGY
– Amendments to the Energy Law foresee a more flexible regulation for the acquisition of state oil product security reserves into state ownership
– Cabinet Regulations No. 163 will be supplemented for the implementation of Directive 2024/2749 requirements
– The Central Finance and Contracting Agency (CFLA) has announced an open project selection for improving the energy efficiency of municipal buildings and their infrastructure
– The European Commission has approved the application for the integrated project “LIFE IP NECP Local” submitted by the Ministry of Climate and Energy (KEM)
LABOR LAW
ENVIRONMENTAL LAW
– New procedure for establishing micro-reserves
TAXES
– Amendments to the Law on Vehicle Operation Tax and Company Light Vehicle Tax
– Draft Law “Amendments to the Corporate Income Tax Law”
CUSTOMS
DISPUTE RESOLUTION
– Criminal liability for offenses committed with unmanned aerial vehicles and other airborne devices is strengthened
– A draft of amendments to the Law on the Procedure for Detention has been submitted to the Saeima
– Long-term storage of seized computer equipment in administrative offense proceedings may lead to disproportionate restriction of property rights and state liability for damages incurred
ECONOMIC CRIMES
COMMERCIAL LAW AND CORPORATE LAW
Case Law
The Senate grants interim protection and suspends the legal obligation imposed by the Competition Council (Case No. SKA-734/2026)
Decision adopted on July 10, 2026.
The case concerns an appeal against a decision by the Competition Council, which found that the Company had abused its dominant position in the online classifieds platform market by unilaterally blocking user accounts and deleting posted advertisements if users had also published them on a competing classifieds platform. Concurrently with the application, the applicant submitted a request to the court to suspend the contested decision in the part that imposed a legal obligation on it to clarify or introduce, within three months, terms of use for the classifieds platform that would contain clearly defined, objective criteria for deleting advertisements and blocking user accounts, as well as a procedure for handling user complaints. The Senate suspended the part of the Competition Council’s decision that imposed the obligation to clarify the terms of use of the classifieds platform. The Senate concluded that immediate execution of the obligation could cause significant and difficult-to-remedy harm, while the Competition Council had not sufficiently justified the urgency and proportionality of such an obligation, especially considering that the identified infringement had already ceased.
ENERGY
Draft Regulatory Acts
Amendments to the Energy Law foresee a more flexible regulation for the acquisition of state oil product security reserves into state ownership (Project ID: 26-TA-1379)
Submitted for public consultation from July 9 – 23, 2026.
The existing regulation stipulates that the security reserve manager shall acquire no less than 15% of the security reserve volume into state ownership annually during the transitional period until December 31, 2028. However, such a fixed annual acquisition requirement does not always provide sufficient flexibility in changing geopolitical circumstances and the oil market situation. The draft law proposes to rephrase point 80 of the transitional provisions of the Energy Law, providing a more flexible approach to the acquisition of security reserves during the transitional period. While maintaining the obligation to ensure the acquisition of 100 percent of security reserves into state ownership by December 31, 2028, the draft law proposes to abandon fixed minimum annual security reserve acquisition volume requirements.
Cabinet Regulations No. 163 will be supplemented for the implementation of Directive 2024/2749 requirements (Project ID: 26-TA-1301)
Public consultation July 8 – 22, 2026.
To supplement Cabinet Regulations No. 163 “Regulations on Noise Emissions from Outdoor Equipment” with two new chapters, which will define how the conformity assessment of outdoor equipment takes place if it is recognized as critical goods in a crisis, and also to establish derogations from conformity assessment procedures that require mandatory involvement of a notified body.
Industry News
The Central Finance and Contracting Agency (CFLA) has announced an open project selection for improving the energy efficiency of municipal buildings and their infrastructure (VARAM news)
EU fund support is intended for improving the energy efficiency and thermal insulation of buildings to reduce annual primary energy consumption, save energy, and decrease municipal expenses. The available European Regional Development Fund (ERDF) financing is 16.5 million euros. Funding can be received by municipalities, their institutions, and municipal or public-private capital companies that provide public services or perform administrative tasks delegated by the municipality. Each applicant can submit an unlimited number of projects, preparing a separate application for each building.
The European Commission has approved the application for the integrated project “LIFE IP NECP Local” submitted by the Ministry of Climate and Energy (KEM) (KEM news)
The total project funding for Latvia will be approximately 19 million euros, of which 60% will be allocated by the European Commission. It will be available to municipalities, planning regions, state institutions, scientific, and non-governmental organizations to prepare quality projects and attract European Union fund financing. This allows for the implementation of energy efficiency measures, adaptation of municipal infrastructure to risks caused by natural disasters, including modernization of streets, sidewalks, stormwater and water supply systems, as well as other environment and energy-related projects.
LABOR LAW
Case Law
The objectives of child and youth rights protection cannot be broadly interpreted as a basis for VAT exemption (Case No. SKA-103/2026)
Judgment adopted on July 8, 2026.
An association that organizes tennis lessons for children and young people submitted an application to the court. The State Revenue Service had recognized that the applicant’s income from organizing lessons was considered income from economic activity subject to value-added tax (VAT). Since the applicant was not registered as a VAT payer, the service, after checking data compliance, had imposed an obligation on it to pay the calculated VAT and late payment interest. The applicant disagreed, believing that its services were public benefit activities for the protection of children’s and youth rights, and therefore should be exempt from VAT payment. The Administrative District Court rejected the application, whereas the Administrative Regional Court granted it, recognizing that the applicant was a public benefit organization during the disputed period, whose activity was aimed at achieving the objectives of child and youth rights protection.
The Senate, if it were to accept that everything beneficial for the physical and intellectual development of children is aimed at protecting children’s and youth rights, then the exemption would effectively have to apply to any children’s goods and services intended for children. In the Senate’s view, there would have been grounds to apply the VAT exemption if the services had been provided specifically for a public benefit purpose; however, the regional court’s judgment did not justify how the applicant’s activity differs from ordinary service provision in a free market.
ENVIRONMENTAL LAW
Regulatory Acts
New procedure for establishing micro-reserves (Amendments to Regulations)
Adopted at Cabinet meeting on July 14, 2026. Enters into force on July 17, 2026.
Amendments to Cabinet Regulations No. 940 “Regulations on the Procedure for Establishing and Managing Micro-Reserves, their Protection, as well as the Designation of Micro-Reserves and their Buffer Zones” stipulate that a person initiating the establishment of a micro-reserve must submit an expert opinion from a species and habitat protection specialist along with the application. Until now, an expert opinion could be optionally attached to the application, but if it was not submitted, the responsible institution provided an expert, which was often time-consuming and prolonged the micro-reserve establishment process. The content of the expert opinion has also been clarified, stating that it must clearly indicate not only the justification for establishing the micro-reserve but also the necessary management measures and activities that can be carried out without endangering protected species or habitats. The application form for establishing a micro-reserve has also been simplified, and requirements for submitting territorial data have been clarified. In the future, data on the micro-reserve territory must be submitted in digital format to the European Land Reporting System.
TAXES
Regulatory Acts
Amendments to the Law on Vehicle Operation Tax and Company Light Vehicle Tax (Amendments to Regulations)
Adopted at Cabinet meeting on July 7, 2026. Entered into force on July 10, 2026.
Amendments to Cabinet Regulations No. 858 “Procedure for Payment of Vehicle Operation Tax and Company Light Vehicle Tax” clarify the application of tax exemption for persons caring for a child with a disability, define the calculation of tax for vehicles removed from registration, and extend the tax exemption for large families to include adult persons up to 24 years of age who are pursuing education or performing national defense service.
Draft Regulatory Acts
Draft Law “Amendments to the Corporate Income Tax Law” (Draft Law No. 1449/Lp14)
Submitted to the Saeima on July 10, 2026; Referred to committee
The draft law was developed to harmonize the conditions for applying Latvia’s tonnage tax with the requirements set out in EU law, so that Latvia’s tonnage tax regime can be maintained and continue to be applied after January 1, 2027. If the tonnage tax scheme is not harmonized with the conditions of the EC guidelines and EC decision practice by the specified deadline, the tonnage tax scheme will be qualified as illegal aid from January 1, 2027.
On January 20, 2026, the European Commission’s Directorate-General for Competition submitted a letter to Latvia, informing that the existing tonnage tax scheme is no longer compatible with the internal market and inviting Latvia to make the amendments to the regulatory acts on the application of tonnage tax indicated in the letter.
The amendments plan to limit the tonnage tax scheme in time, as well as to stipulate that the calculation of the tonnage tax amount is based on calendar days, not ship operating days. It is also stipulated that the applicable rates must comply with the rates set in the tonnage tax schemes of other member states approved by the European Commission. It is also planned to define the types of ships for which the tonnage tax may be applied. When determining the types of activities for which tonnage tax may be applied, the conditions in the EC Guidelines and the tonnage tax schemes of other member states approved by the European Commission must be observed.
At the same time, it is necessary to ensure compliance with the conditions for aid accumulation (if accumulation is possible), the separation of activities subject to tonnage tax from activities subject to corporate income tax under the general procedure, and to ensure that all current corporate income tax liabilities under the general corporate income tax regime have been fulfilled before joining the tonnage tax scheme.
CUSTOMS
Industry News
Informative material on the import of goods and equipment intended for charity or philanthropic activities with exemption from import duty (Material)
The informative material explains that public benefit organizations and state or municipal institutions can import goods intended for charity from non-EU countries without import duty and VAT if they are intended to support the needy, for charitable events, or for the organization’s activities. To receive the exemption, a customs declaration with the necessary documents must be submitted, and records of the imported goods must be maintained.
DISPUTE RESOLUTION
Regulatory Acts
Criminal liability for offenses committed with unmanned aerial vehicles and other airborne devices is strengthened (Amendments to the Criminal Law)
Entered into force on July 10, 2026.
The amendments were developed taking into account the trends in crime observed in practice, namely, law enforcement agencies are increasingly detecting cases where criminal offenses (e.g., smuggling) are committed by moving goods, substances, or other valuables using devices that move in airspace (e.g., aerostats, unmanned aerial vehicles, meteorological probes, etc.).
The purpose of the amendments to the Criminal Law is to ensure that the Criminal Law regulation complies with modern crime development trends by strengthening criminal liability in cases where criminal offenses are committed using devices that move in airspace (e.g., aerostats, unmanned aerial vehicles, meteorological probes, etc.).
Draft Regulatory Acts
A draft of amendments to the Law on the Procedure for Detention has been submitted to the Saeima ( No. 1453/Lp14)
Submitted on July 10, 2026.
The purpose of the draft law is to expand the scope of communication rights for detainees, establish more detailed regulations for visits and meetings, and make other amendments to the Law on the Procedure for Detention to improve the execution of detention. The project also includes amendments aimed at reducing the informal hierarchy among prisoners, reducing the circulation of unauthorized items and substances, and reducing opportunities for unauthorized communication.
Case Law
Long-term storage of seized computer equipment in administrative offense proceedings may lead to disproportionate restriction of property rights and state liability for damages incurred (Case No. A420229019)
Judgment adopted on July 13, 2026.
The State Police initiated administrative offense proceedings regarding the fact that unregistered business activities (illegal printing) were possibly being carried out in a residential building, for which liability is provided in the Latvian Administrative Offenses Code. On November 16, 2017, police officers inspected the said residential building, during which they seized computer processors and an external hard drive as tools for committing the administrative offense. On June 29, 2018, the applicant was issued an administrative offense report for copyright infringement. The administrative offense case materials were sent to the Zemgale District Court, which on September 10, 2018, decided to terminate the administrative offense proceedings, as it found that the statute of limitations provided in the code had expired. In execution of the court’s decision, the police returned the seized property to the applicant. The applicant approached the State Police with an application, requesting compensation for damages and non-pecuniary harm incurred due to the police actions in the administrative offense proceedings. The police rejected the applicant’s claim. The applicant approached the administrative court with an application for compensation for damages and non-pecuniary harm. The Administrative Regional Court partially granted the application with its judgment. In its judgment No. SKA34/2025 of June 16, 2025, the Senate pointed out the legal and factual circumstances that had not been fully examined and evaluated in the Administrative Regional Court’s judgment, and referred the case for re-examination.
In its judgment, the Senate indicated that the court must assess whether the seizure of computer equipment and its subsequent storage was determined by law and aimed at achieving a legitimate goal, and whether a fair balance was ensured between the interests of society and the individual. If the court concludes that the seizure and storage of computer equipment was determined by law and aimed at achieving a legitimate goal, it should be considered whether the preparation of the administrative offense case for examination was carried out within a reasonable time, bearing in mind that the person whose property rights have been interfered with does not have procedural status and cannot fully exercise the right to defense.
The Regional Court concluded that, although the initial seizure of computer equipment was lawful, its prolonged storage for more than ten months, despite the creation of mirror copies, was unjustified and restricted the applicant’s property rights. This action was recognized as a significant procedural violation, and the court awarded compensation for non-pecuniary harm, computer equipment rental expenses, and a portion of legal assistance expenses.
ECONOMIC CRIMES
Case Law
Three individuals are being prosecuted for money laundering of almost 1.5 million euros (Prosecutor’s Office: News)
08.06.2026. criminal case sent to the Economic Affairs Court
The individuals are accused of legalizing financial assets – 1,731,802.32 virtual currency units, or no less than 1,497,062.86 euros – obtained as a result of an unspecified criminal offense during the investigation. This was done by forming an organized group, converting criminally obtained virtual currency assets into other values, changing their location and ownership. Since no specific predicate offense has been established in the criminal case, there is reason to speak of autonomous legalization or a stand-alone case, i.e., when the direct origin of the property is unknown.
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PARTNER, ATTORNEY AT LAW
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