Legislative Review July 6–July 9, 2024
COMMERCIAL AND CORPORATE LAW
REAL ESTATE AND CONSTRUCTION
– Amendments to Cabinet Regulation No. 294 “Regulations on Latvian Construction Standard LBN 261-15 ‘Internal Electrical Installation of Buildings'”
– Amendments to Cabinet Regulation No. 500 “General Construction Regulations” submitted for public consultation, developed for the regulation of construction project implementation in stages
– Amendments to Cabinet Regulation No. 529 “Building Construction Regulations” submitted for public consultation, developed to accelerate the construction implementation process
ENERGY
REGULATED LAW
BANKING AND FINANCE LAW
– Adopted regulations on the preparation of reports on covered deposits and the calculation of payments into the deposit guarantee fund
– Adopted action plan for supporting the trade sector
– Amendments to the Consumer Rights Protection Law provide for entrusting the supervision of financial services consumer rights to the Bank of Latvia
– Amendments to the Financial Instrument Market Law transpose EU directive requirements regarding information accessibility and risk management
INTELLECTUAL PROPERTY (IP) & INFORMATION TECHNOLOGY (IT) & DATA PROTECTION
TAXES
– Intent to adopt special taxation rules for natural persons providing services only to other natural persons through amendments to the Micro-enterprise Tax Law, the Law “On Personal Income Tax,” and the Law “On Taxes and Duties”
– Application of VAT and reporting in the declaration when importing goods
– Distribution of assets of a public benefit organization under liquidation
– Application of value added tax to transactions of public persons and private persons performing delegated or authorized state administration tasks
– Regarding the value added tax exemption provided by Council Regulation (EU) 2025/1106 of May 27, 2025, establishing the instrument “Action for European Security by Strengthening the European Defense Industry” (SAFE)
CUSTOMS
– Regarding new measures and proof of origin for goods from the United States of America
– Amendments to the Customs Law establish new requirements for companies providing goods storage services or operating in a free zone
DISPUTE RESOLUTION
– Case initiated in the Constitutional Court regarding the right of a legal person to receive compensation for damages after the termination of proceedings regarding criminally acquired property
– Case initiated in the Constitutional Court regarding the compliance of the regulation on the purchase, compensation, and availability of medicines with the Constitution
COMMERCIAL AND CORPORATE LAW
Case Law
Non-compliance of meeting continuation with regulatory requirements and its impact on the validity of adopted decisions (No. 1-5n/89)
Decision adopted on June 30, 2026.
A company submitted an application to the Register of Enterprises for amendments to its articles of association and a change of the board, attaching minutes of general meetings. At the first general meeting, the amendments to the articles of association were not adopted and the meeting was terminated prematurely, but the second general meeting was indicated as a continuation of the first meeting. All decisions were adopted at the second general meeting.
The Chief State Notary concluded that the first meeting was not terminated in accordance with the procedure provided by regulatory enactments, as there was no vote by members and no decision on the break and continuation on another date. Therefore, the second meeting cannot be considered a continuation of the previous meeting but must be evaluated as a new general meeting. Since this new meeting was not announced at least 30 days in advance, the requirement of the Law on Cooperative Societies regarding the term for convening a meeting was violated. Consequently, it must be recognized that the decisions adopted at the second meeting regarding the election of the board and amendments to the articles of association are not considered legally adopted.
REAL ESTATE AND CONSTRUCTION
Regulatory Enactments
Amendments to Cabinet Regulation No. 294 “Regulations on Latvian Construction Standard LBN 261-15 ‘Internal Electrical Installation of Buildings'” (25-TA-1257)
Adopted at the Cabinet meeting on July 7, 2026.
Chapter III1 “Requirements for Electromobility” of the current version sets out requirements for the installation of charging points. The regulation of this chapter is being clarified and transferred to Cabinet Regulation No. 693 “Construction Standard LBN 200-21 ‘General Requirements for Structures'”, therefore this chapter is being deleted from construction standard LBN 261-15.
Draft Regulatory Enactments
Amendments to Cabinet Regulation No. 500 “General Construction Regulations” submitted for public consultation, developed for the regulation of construction project implementation in stages (Project ID: 26-TA-1462)
Public consultation from July 8, 2026, to July 22, 2026.
The Saeima has adopted Amendments to the Construction Law, which provide for a new construction process – implementation of a construction project in stages. In accordance with the amendments to the law, it is necessary to amend Cabinet Regulation No. 500/2014, providing for a 10-working-day term for building board decisions on each construction stage and clarifying the procedure for construction project expertise.
Amendments to Cabinet Regulation No. 529 “Building Construction Regulations” submitted for public consultation, developed to accelerate the construction implementation process (Project ID: 26-TA-1392)
Public consultation from July 8, 2026, to July 22, 2026.
The amendments provide for determining the level of detail of the construction project for construction intentions implemented in stages (to enter into force on March 1, 2027). It is also intended to provide that a notification of the construction of a new building is used if the new construction or placement of a first-group residential building, auxiliary building, or agricultural non-residential building and small building on one’s own plot of land is planned (to enter into force from January 8, 2027). For acceptance into operation within the framework of the building permit construction process, cases where an opinion from the Health Inspectorate is required will be clarified. It would be important to determine that the opinion is necessary for objects under the supervision of the Health Inspectorate rather than for any third-group building, including multi-apartment residential buildings.
ENERGY
Regulatory Enactments
Adopted amendments to Cabinet Regulation No. 155 “Regulations on the Support Program for Greening Business, Use of Renewable Energy Resources, and Increasing Energy Efficiency” (Project ID: 26-TA-488)
Adopted at the Cabinet meeting on July 7, 2026.
The amendments stipulate that support will be granted as a priority to projects whose implementation site is Saulkrasti Municipality, Limbaži Municipality, Tukums Municipality, or Ogre Municipality. The company “Altum” will evaluate project applications and grant funding in the order of their submission. Acceptance of project applications whose implementation site is outside Saulkrasti Municipality, Limbaži Municipality, Tukums Municipality, and Ogre Municipality, as well as for large economic operators throughout the territory of the Republic of Latvia, will begin starting from the 61st working day since the day of the start of application selection.
REGULATED LAW
Regulatory Enactments
Amendments to the Road Traffic Law provide for expanding the regulation on actions after a road traffic accident has occurred (Draft Law No. 1435/Lp14)
Submitted to the Saeima on July 3, 2026.
With the amendments to the law, the cases when the driver of a vehicle will have an obligation to report a road traffic accident to the State Police are expanded. Such amendments will be introduced to protect the property interests of third parties and drivers of vehicles damaged in an accident who are not at the scene of the accident, to prevent danger to road traffic, or to prevent drivers from evading responsibility for driving a vehicle under the influence of alcohol, narcotic, or other intoxicating substances. Also, in the future, if more than two vehicles are involved in a road traffic accident, the drivers, if no other instructions are received from the State Police, will be entitled to fill out the agreed statement forms and leave the scene of the accident. In this way, the State Police will be able to remotely decide on the necessity for State Police officials to travel to the scene, as well as consult drivers on filling out the agreed statement forms.
BANKING AND FINANCE LAW
Regulatory Enactments
Adopted regulations on the preparation of reports on covered deposits and the calculation of payments into the deposit guarantee fund (Bank of Latvia Regulation No. 421)
Entered into force on July 2, 2026.
The regulations establish the procedure and term by which a deposit taker prepares and submits to the Bank of Latvia a report on covered deposits, as well as the requirements for the calculation and making of payments by deposit takers into the deposit guarantee fund.
Adopted action plan for supporting the trade sector (Project ID: 25-TA-3074)
Adopted at the Cabinet meeting on July 7, 2026.
The plan provides for (1) a review of regulatory requirements by evaluating problem issues identified by the sector, (2) a reform of the regulation for placing advertisements in public places to simplify and accelerate the coordination process, (3) a reform of the street trade regulation, and (4) research into possible policy initiatives for small traders in the regions.
Draft Regulatory Enactments
Amendments to the Consumer Rights Protection Law provide for entrusting the supervision of financial services consumer rights to the Bank of Latvia (Draft Law No. 1381/Lp14)
The Committee reviewed and supported on July 8, 2026.
The amendments provide for the gradual transfer of consumer rights protection supervision in the field of financial services, which was previously implemented by the Consumer Rights Protection Centre (PTAC), to the Bank of Latvia starting from 2027. The draft law provides that the Bank of Latvia will take over the licensing and supervision of consumer lenders, the registration and supervision of credit intermediaries and their representatives, the control of financial services advertising and unfair commercial practices, as well as the handling of consumer complaints and the provision of assistance in dispute resolution. The amendments also provide for the introduction of a new approach to the licensing of consumer credit service providers. Special permits or licenses will henceforth be issued for an indefinite period, but the requirements for obtaining them, suspension of activities, and cancellation will be determined by the Bank of Latvia.
Amendments to the Financial Instrument Market Law transpose EU directive requirements regarding information accessibility and risk management (Draft Law No. 1438/Lp14)
The planned changes to the Financial Instrument Market Law provide for the implementation of European Single Access Point (ESAP) requirements in Latvian regulation. The goal is to ensure the availability of information in the European Single Access Point (ESAP), which is intended as a centralized access point for publicly available information on financial services, capital markets, and sustainability. The draft law provides for clarifying the regulation on the approval of prospectuses and the preparation procedure, as well as promoting companies’ access to the capital market.
INTELLECTUAL PROPERTY (IP) & INFORMATION TECHNOLOGY (IT) & DATA PROTECTION
Case Law
Copyright in the European Union and geo-blocking: a work that is publicly available can be published online for free in one member state, even if it is still protected in another member state (Case C-788/24)
Judgment adopted on July 9, 2026.
The Court rules that a work that is publicly available in certain member states can be published for free on a website, even if it is still protected by copyright in another member state. However, this is subject to the condition that the website must include a geo-blocking measure designed to ensure that access to this website is blocked for internet users visiting it from that other member state. As long as it complies with the latest technology, such a measure can be considered effective even if it can be bypassed with a VPN or similar service.
TAXES
Draft Regulatory Enactments
Intent to adopt special taxation rules for natural persons who provide services only to natural persons with amendments to the Micro-enterprise Tax Law (No. 1407/Lp14), the Law “On Personal Income Tax” (No. 1408/Lp14) and the Law “On Taxes and Duties” (No. 1409/Lp14)
Adopted in the 1st reading on June 18, 2026. Proposals are expected until July 27, 2026.
The draft laws provide for the possibility for a natural person to provide a service to another natural person without registering with the State Revenue Service (SRS) as an economic operator or choosing one of the legal person forms. A person will be able to start using the simplified tax payment solution by opening a settlement account at a service provision institution (bank). The remaining exchange of information, tax withholding, and payment into the state budget takes place between the service provision institution and the State Revenue Service. The regulation can be used by all natural persons who provide services to another natural person and the turnover does not exceed EUR 25,000 during the taxation period. It is planned that the micro-enterprise tax rate for such activity will be 10%. If the draft laws are adopted, the amendments will enter into force from January 1, 2027.
Industry News
Application of VAT and reporting in the declaration when importing goods (Explanation)
The applicant requested an SRS explanation regarding the application of VAT to port terminal service costs that were included in the taxable value of the import transaction. The SRS explained that since these costs are included in the customs value of the imported goods, they are taxed with VAT within the framework of the import procedure, therefore additional VAT does not need to be calculated. In turn, the import transaction must be shown in lines 60 and 61 of the VAT declaration (if necessary, also in line 66) and specified in Part I of the VAT 1 report.
Distribution of assets of a public benefit organization under liquidation (Material)
The material explains the procedure for the distribution of assets of a public benefit organization under liquidation. It sets out the duties of the liquidator and the SRS, and provides that the remaining assets must first be transferred to another public benefit organization with a similar purpose, but if this is not possible, they shall fall to the state. This procedure also applies to certain associations, foundations, and religious organizations.
Application of value added tax to transactions of public persons and private persons performing delegated or authorized state administration tasks (Methodological material)
Based on proposals from the Treasury, the material has been supplemented and clarified regarding the application of VAT in specific situations. It includes new examples 13 and 14, clarifies examples 4–9, and adds a new chapter “Registration in the SRS VAT Taxpayer Register in a Special Procedure,” which explains the application of Section 139.² of the Value Added Tax Law.
Regarding the value added tax exemption provided by Council Regulation (EU) 2025/1106 of May 27, 2025, establishing the instrument “Action for European Security by Strengthening the European Defense Industry” (SAFE) (Informative material)
The material explains the application of the VAT exemption established by Council Regulation (EU) 2025/1106 (SAFE) to the supply, import, and acquisition of defense products carried out within the framework of procurement supported by the SAFE instrument. It explains the conditions for applying the exemption, the necessary documents, the procedure for deducting input tax, and the declaration of transactions in the VAT declaration.
CUSTOMS
Regulatory Enactments
Regarding new measures and proof of origin for goods from the United States of America (Regulation 2026/1455)
Enters into force from July 1, 2026.
Regulation (EU) 2026/1455 establishes special customs conditions for the import of specific goods of US origin into the European Union, providing for 0% customs duty, reduced rates, or tariff quotas for certain goods. To apply these benefits, the importer must prove the US origin of the goods.
Amendments to the Customs Law establish new requirements for companies providing goods storage services or operating in a free zone (Adopted version)
Enters into force from July 10, 2026.
With the amendments to the Customs Law, a new procedure is established for receiving goods that will be delivered by road or rail transport under the transit procedure for storage in a temporary storage facility, customs warehouse, or free zone.
With the entry into force of the amendment, it will be possible to receive goods and complete the transit procedure only by using the status of authorized consignee, except in cases where the use of such status is not permitted in accordance with Paragraph 23 of Cabinet Regulation No. 499 “Regulations on Customs Authorizations” (specifies regarding what the authorization to use the status of authorized consignor and the authorization to use the status of authorized consignee is not used).
DISPUTE RESOLUTION
Industry News
Case initiated in the Constitutional Court regarding the right of a legal person to receive compensation for damages after the termination of proceedings regarding criminally acquired property (Case No. 2026-10-01)
Initiated on July 6, 2026.
A case has been initiated in the Constitutional Court regarding the compliance of Section 4, Paragraph two of the Law on Compensation for Damages Caused in Criminal Proceedings and Administrative Offense Proceedings (in the version until May 31, 2026) with the third sentence of Article 92 of the Constitution of the Republic of Latvia (In case of unjustified infringement of rights, everyone has the right to appropriate compensation) and Article 105 (right to property).
The contested norm stipulated that a legal person of private law has the right to compensation for damages if a decision has entered into force on the termination of proceedings in full or in part regarding the application of compulsory measures to this person, without establishing the grounds specified in the Criminal Law for the application of a compulsory measure to the person concerned.
In the criminal proceedings, an attachment was placed on the applicant’s property, but later a process regarding criminally acquired property was separated from the criminal proceedings, in which the court evaluated whether this property was criminally acquired. The court terminated the process because the criminal origin of the property was not proven, and consequently, the attachment placed on the property was also revoked. The applicant requested compensation for the damage caused to it by the unjustified attachment of property. This request was rejected because the law does not provide for a person’s right to receive compensation before the criminal proceedings have concluded.
The applicant states that the attachment of property was unjustified because the issue of the origin of the property belonging to it has already been finally resolved in the process regarding criminally acquired property, in which it was recognized that the criminal origin of the property was not proven. In turn, the criminal proceedings cannot affect this fact. Consequently, the contested norm disproportionately restricts its right to appropriate compensation included in the third sentence of Article 92 of the Constitution and the right to property included in Article 105 of the Constitution.
Case initiated in the Constitutional Court regarding the compliance of the regulation on the purchase, compensation, and availability of medicines with the Constitution (Case No. 2026-11-0103)
Initiated on July 8, 2026.
A case has been initiated in the Constitutional Court regarding the compliance of Section 5, Paragraph 20 of the Pharmaceutical Law, insofar as it authorizes the Cabinet of Ministers to determine the procedure for compensation of expenses for the purchase of medicines intended for outpatient treatment, and Sub-paragraph 2.1 and Paragraph 3 of Annex 8 to Cabinet Regulation No. 555 “Procedures for the Organization and Payment of Health Care Services” with Articles 1, 64, and 111 of the Constitution of the Republic of Latvia.
The contested norms of the Pharmaceutical Law and the Health Care Payment Regulations establish the legal regulation for the compensation of outpatient medicines and the payment for parenteral medicines. The contested norms determine the criteria by which the state ensures the availability of medicines to persons from state budget funds.
The application was submitted by the Council of the State Audit Office. The applicant states that the state has not fulfilled its obligation to create a system that would ensure the availability of medicines at least in the minimum amount and at the same time guarantee persons equal opportunities to receive state-paid medicines. In the applicant’s view, the state has not established clear and objective criteria by which, in conditions of limited financial resources, it would be decided which medicines and diseases should be given priority by including them in the lists of state-paid medicines. The application states that general principles have not been developed that would allow balancing the needs of persons with severe or life-threatening diseases to receive state-paid, including very expensive, medicines with the public interest to provide state-paid medications to as wide a circle of persons as possible, including those suffering from milder illnesses.
The applicant also states that the Saeima, contrary to the principle of separation of powers, has not decided these essential issues itself but has delegated their regulation to the Cabinet of Ministers. In turn, the Cabinet of Ministers, in the applicant’s view, has exceeded the limits of the authorization granted to it. The applicant has requested that the contested norms be recognized as non-compliant with Articles 1, 64, and 111 of the Constitution.
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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).
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PARTNER, ATTORNEY AT LAW
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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.
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