Legislative Review 01.03.–12.03.2026
COMMERCIAL AND CORPORATE LAW
REAL ESTATE AND CONSTRUCTION
ENERGY
– Latvia’s proposal for amendments to the EU regulation governing CO2 emission standards for new light-duty vehicles and vehicle labeling
– Amendments to Cabinet Regulation No. 432 on the implementation of European Union Recovery Fund investments in the energy sector
– Consultation document on system connection rules for the electricity distribution and transmission system
– A meeting for the coordination of opinions will be held regarding the consultation document on the methodology for calculating thermal energy supply service tariffs
– AS “Sadales tīkls” will increase the capacity available to users by almost 200 megawatts with EU funding
– Territories in Latvia for renewable energy development
REGULATED INDUSTRIES
– Extension of the import ban on agricultural and fodder products from Russia and Belarus
– Review initiated regarding the compliance of the norm determining the amount of support for forestry activity restrictions in micro-reserves with the Constitution
BANKING AND FINANCE LAW
– Amendments to the Credit Institution Law
ENVIRONMENTAL LAW
– The Energy and Environment Agency is planned to be merged with the State Environmental Service
– Amendments to the Law “On Environmental Impact Assessment” adopted
– Amendments to Cabinet Regulation No. 237 on environmentally friendly improvements to the Riga public transport system
– Sustainable development goals and current environmental law issues in Latvia
TAXES
– Convention between Latvia and Liechtenstein for the elimination of double taxation with respect to taxes on income and on capital and the prevention of tax evasion and avoidance
– Saeima rejects proposal to apply a 100% personal income tax (PIT) discount for families with 3 or more children
– Introduction of an economic security tax on goods from high-risk countries
– On strengthening tax regulation for payments to tax-free countries and territories
– Expansion of SRS data accessibility for credit information bureaus and clarification of cash restrictions for consumer lenders
– Voluntary work in a commercial company: court recognizes the existence of an employment relationship
– Right to support for marked diesel fuel is assessed based on declaration data
DISPUTE RESOLUTION
– Expansion of judicial discretion for the protection of the financial interests of a good-faith real estate acquirer in criminal proceedings
– Regulation on the transfer of information obtained during operational activities to other institutions will be clarified
– ECHR decision in a case regarding the absence of a violation of the right to a hearing within a reasonable time
COMMERCIAL AND CORPORATE LAW
Case Law
The Senate refers preliminary questions to the CJEU to determine whether a service provider’s exclusive rights exclude market competition or whether the factual circumstances of the specific situation must also be analyzed (Case No. SKA-9/2026)
Decision adopted on 06.03.2026
A public transport service provider (hereinafter – the General Contractor) entered into an order agreement with the municipal council in 2011, which granted it exclusive rights to provide public transport services, including high-service level services with minibuses. 2013. In 2012, the service provider entered into a subcontracting agreement with a minibus service provider (hereinafter – the Subcontractor), which offered to provide this service at the basic tariff. During the execution of the agreement, additional agreements were also concluded.
2017. In 2017, the Competition Council found a violation of the Competition Law in the actions of both service providers, which manifested as a vertical agreement on setting a minimum fare for high-service level services provided in the municipality, thereby restricting competition at a horizontal level between the two companies as public transport service providers. Fines were imposed on both companies, and they were required to amend the agreements.
The Senate recognized that it is essential in the case to clarify which legal and factual circumstances are relevant to conclude whether an agreement violates the competition law. Namely, whether it only matters that, according to EU Regulation No. 1370/2007, the granting of exclusive rights formally excludes competition in the specific market, so competition between a public service provider and its subcontractor is in principle impossible, or whether the actual situation, which may indicate that competition in the market still exists, must also be assessed. The Senate refers preliminary questions to the Court of Justice of the European Union to clarify the interpretation of these norms regarding the exclusion of competition and the nature of a subcontracting agreement.
REAL ESTATE AND CONSTRUCTION
Draft Legislative Acts
Amendments to Cabinet Regulation No. 384 “Building Code LBN 405-21 on Technical Inspection of Buildings” (Project ID: 25-TA-449)
Adopted at the Cabinet meeting on 03.03.2026
The amendments clarify the scope of the regulation, excluding transformer substation buildings of power supply merchants and linear engineering structures, and specifying that it does not apply to the safety assessment of elevators. The concepts of technical research and inspection are clarified, and it is established that the inspector may use various research methods, not only destructive ones. Requirements for periodic inspection are reduced, for example, in the field of fire safety. It is also clarified that the necessity of technical inspection before the development of a construction project is determined by the developer of the construction project, and cases where periodic technical inspection is not mandatory are specified. The regulations are supplemented with deadlines for periodic inspection of public buildings and office buildings.
ENERGY
Draft Legislative Acts
Latvia’s proposal for amendments to the EU regulation governing CO2 emission standards for new light-duty vehicles and vehicle labeling (Project ID: 26-TA-493)
Adopted at the Cabinet meeting on 03.03.2026
The European Union has committed to reducing greenhouse gas emissions by at least 55% by 2030 compared to 1990 and achieving climate neutrality by 2050. Accordingly, Regulation 2019/631 setting CO2 emission performance standards for new passenger cars and new light commercial vehicles is being amended.
Latvia generally supports the goal of ensuring a gradual transition to zero-emission mobility while maintaining technological neutrality and the ability of manufacturers to meet the set CO₂ emission targets. In Latvia’s view, the set target of 90% for cars and vans should be reduced further, setting, for example, an 80% reduction, allowing the remaining part to be compensated with renewable fuels and low-carbon steel. Latvia also points out that providing additional data within the CO₂ monitoring framework creates a disproportionate administrative burden, and the proposed restrictions on the use of renewable fuel credits are unjustified.
Amendments to Cabinet Regulation No. 432 on the implementation of European Union Recovery Fund investments in the energy sector (Project ID: 25-TA-2507)
Adopted at the Cabinet meeting on 10.03.2026
The amendments clarify investment goals, areas of activity, and funding in electricity transmission and distribution network modernization projects. It is established that by 31.07.2026, the electricity distribution system capacity must be increased by 70 MW. The proposal of the Ministry of Climate and Energy (KEM) to redirect savings generated within the AS “Augstsprieguma tīkls” Recovery Fund project to the AS “Sadales tīkls” project for the construction of additional cable lines has been approved. Consequently, the volume of cable lines to be built in the AS “Sadales tīkls” project on Latvian territory will reach 190 km. It is also planned to install at least 285 remotely controlled switching and control devices to ensure remote management and fault identification of the electricity distribution system. Additionally, the development of an environmental impact assessment is planned for a new Latvia–Lithuania electricity interconnection and a new 330 kilovolt line Ventspils–Brocēni–Varduva on Latvian territory, as well as the integration of biomethane into the natural gas transmission system.
Consultation document on system connection rules for the electricity distribution and transmission system (Consultation document)
Submission of opinions until 13.03.2026
The Public Utilities Commission (SPRK) invited opinions and proposals on the consultation document regarding system connection rules for the electricity distribution and transmission system. Instead of the previous three regulations, two new draft regulations have been developed, establishing a clear procedure for connecting electricity consumption and production equipment, and electricity storage facilities to the electricity transmission and distribution system.
A meeting for the coordination of opinions will be held regarding the consultation document on the methodology for calculating thermal energy supply service tariffs (Consultation document)
The meeting will take place on 26.03.2026
To learn the opinions of thermal energy service providers and users, as well as other interested parties, the Public Utilities Commission (SPRK) developed and announced on 22.05.2025 a consultation document for the submission of opinions on the methodology for calculating thermal energy supply service tariffs. The project envisaged introducing the return on capital method (measuring profit relative to invested capital) for tariff calculation. Later, a clarified consultation document was published, on which opinions could be submitted until 12.01.2026. The clarified document supplemented the methodology with the condition that, when using the return on total capital method, the revaluation of fixed assets will not be taken into account in the depreciation calculation, thereby aligning both capital investment and depreciation accounting at historical value. It is also established that benchmarks will be used more when evaluating submitted tariffs. Additionally, an obligation to record unforeseen income and expenses in detail has been introduced.
Industry News
AS “Sadales tīkls” will increase the capacity available to users by almost 200 megawatts with EU funding (Current events: Ministry of Climate and Energy)
Published on 27.02.2026
The electricity capacity available to users in Latvia’s development centers is planned to be increased by 2030. With 200 MW, it would be possible to provide approximately half of the capacity required for all of Latvia in the summer months, provide another 50,000 households with the necessary connection capacity, or provide capacity for approximately 40 data centers or 100 medium-sized production plants.
Territories in Latvia for renewable energy development (Map)
In accordance with the requirements of Directive (EU) 2023/2413, Latvia has developed a public map showing territories suitable for renewable energy development.
REGULATED INDUSTRIES
Draft Legislative Acts
Extension of the import ban on agricultural and fodder products from Russia and Belarus (Draft Law No. 1248/Lp14)
Referred to committee on 12.03.2026
Amendments to the Law on Agriculture and Rural Development provide for the extension of the ban established in Latvia on importing certain agricultural and fodder products from Russia and Belarus. Initially, the ban was set until 01.07.2025; however, with the amendments, it is intended to continue applying it until 01.07.2026. The ban also applies to products imported from other countries if their origin is Russia or Belarus. At the same time, transit through Latvia to other European Union countries is still permitted.
Case Law
Review initiated regarding the compliance of the norm determining the amount of support for forestry activity restrictions in micro-reserves with the Constitution (Constitutional Court: News)
Review of the case initiated on 12.03.2026
Two cases were initiated in the Constitutional Court, later merged into one case, regarding the compliance of Cabinet Regulation No. 171 with Articles 91 and 105 of the Constitution. It follows from the materials of the merged case that micro-reserves for the protection of specially protected bird species have been established on the applicants’ real estate, and consequently, restrictions on economic activity have been set in these territories. The applicants believe that the support amount specified in the contested norms for forestry activity restrictions in micro-reserves is disproportionately small and thus restricts their right to property. The contested norms also allegedly provide the same support to all forest owners without justification and thus violate the principle of legal equality, as the support amount should be differentiated according to the actual value of the real estate and the situation in nature.
BANKING AND FINANCE LAW
Draft Legislative Acts
Amendments to the Credit Institution Law (Project ID: 25-TA-2626)
Adopted at the Cabinet meeting on 10.03.2026
On 01.10.2026, amendments will come into force that will clarify and supplement the regulation in accordance with the planned reform of the Insolvency Control Service (MKD), transferring its functions and tasks to the Ministry of Justice and the Court Administration. Henceforth, in the norms related to the administration of the employee claims guarantee fund and the coverage of employee claims, MKD is replaced by the Court Administration, while the institution to be informed about the administrator’s resignation will henceforth be the Ministry of Justice.
ENVIRONMENTAL LAW
Draft Legislative Acts
The Energy and Environment Agency is planned to be merged with the State Environmental Service (Draft Law No. 25-TA-1319)
Adopted at the Cabinet meeting on 10.03.2026
To improve the institutional system of public administration, increase operational efficiency, and reduce bureaucracy, the draft law “Amendments to the Environmental Protection Law” has been adopted, which provides for the liquidation of the Energy and Environment Agency (EVA) and its merger with the State Environmental Service (VVD). Both institutions perform similar functions in the fields of environment, climate, and energy; therefore, their merger will improve work organization and reduce the administrative burden for clients. According to the new structure, VVD will also be responsible for the processes under EVA’s responsibility in addition to its existing functions.
Henceforth, Energy experts will operate as a separate structural unit under the direct supervision of the Director General, EIA procedure specialists will work in the VVD Permits Department, appeals of administrative acts will be within the competence of the VVD Legal Department, while industrial accident risk assessment experts will join the VVD Operational Coordination Center team.
Amendments to the Law “On Environmental Impact Assessment” adopted (Draft Law No. 25-TA-1315)
Adopted at the Cabinet meeting on 10.03.2026
Along with the liquidation of the Energy and Environment Agency (EVA) and the merger of its functions with the State Environmental Service (VVD), the Law “On Environmental Impact Assessment” has been amended to ensure clear and precise regulation.
The draft law updates the competence of VVD in performing environmental impact assessments and reviewing contested administrative acts, taking over EVA’s functions. Henceforth, a VVD decision not to initiate or to terminate an initial impact assessment, as well as a decision to perform or not to perform an environmental impact assessment, can be contested within one month to the Director General of VVD. Additional amendments ensure compliance with the reorganization of the Cabinet of Ministers, as a result of which the environmental protection policy area was transferred to the Ministry of Climate and Energy.
Amendments to Cabinet Regulation No. 237 on environmentally friendly improvements to the Riga public transport system (Project ID: 26-TA-103)
Adopted at the Cabinet meeting on 10.03.2026
The amendments clarify the conditions for granting funding and implementing projects for the introduction of environmentally friendly improvements in the Riga public transport system. The total Recovery Fund funding available for the measure has been clarified, and it is established that funding is not granted to subjects in exclusion situations provided for in the EU Financial Regulation. Requirements regarding tax debts and deadlines for submitting information between the ministry and the agency have also been clarified. The amendments also establish that the final payment is made only after the achievement of project goals and indicators has been verified. Additionally, the procedure by which the funding recipient submits payment requests, documents justifying expenses, and other evidence of project implementation has been clarified.
Industry News
Sustainable development goals and current environmental law issues in Latvia (Jurista vārds)
Published on 10.03.2026
The article examines specific sustainable development goals in various fields agreed upon internationally and at the European Union level. In the field of energy, Latvia is among the leaders with a share of renewable energy exceeding 40%. In the field of water resources, the Union faces deteriorating water quality and more severe drought consequences in certain regions. The average renewable water resource exploitation index of member states exceeds 5%, but in several southern countries, it approaches or exceeds 20%. In Latvia, it is approximately 0.2% – the lowest in the Union, which means there is no quantitative water deficit.
TAXES
Legislative Acts
Convention between Latvia and Liechtenstein for the elimination of double taxation with respect to taxes on income and on capital and the prevention of tax evasion and avoidance (Law)
Promulgated on 26.02.2026; Entered into force on 12.03.2026
The law adopts and approves the convention between Latvia and Liechtenstein signed on 02.10.2025, as well as its protocol. The convention provides for the elimination of double taxation of income and capital between the countries, while preventing the creation of opportunities for tax evasion and reduction.
Draft Legislative Acts
Saeima rejects proposal to apply a 100% personal income tax (PIT) discount for families with 3 or more children (Draft Law No. 1237/Lp14)
Rejected in the Saeima on 05.03.2026
Amendments to the Law “On Personal Income Tax” provide for a 100% exemption from PIT on employment income for one of the parents who has three or more children as dependents. For the purposes of this regulation, children would be considered minors, as well as young people up to 24 years of age who continue to obtain education in full-time studies. The amendments would enter into force on 01.01.2027 and would significantly change the current system of reliefs, moving from a partial tax reduction to a full exemption for a specific group of taxpayers.
Introduction of an economic security tax on goods from high-risk countries (Draft Law No. 1239/Lp14)
Submitted to the Saeima on 27.02.2026; Referred to committee on 05.03.2026
Amendments to the Law “On Taxes and Fees” provide for the inclusion of a new type of tax in the system – the economic security tax – and establish that it will be administered by the State Revenue Service (SRS).
The tax would be applied to performers of economic activity for the first-time release for consumption in Latvia of certain goods if the origin of the goods is a high-risk country or they have been used in risky supply chains.
The goal is to reduce Latvia’s economic dependence on high-risk countries, strengthen national security, and increase budget revenues for security financing (including support for Ukraine). The amendments would enter into force on 01.05.2026.
On strengthening tax regulation for payments to tax-free countries and territories (Draft Law No. 1240/Lp14)
Referred to Saeima committee on 05.03.2026
To reduce tax evasion in Latvia when making payments to low-tax or tax-free countries and territories, as well as to prevent situations where persons from these countries or territories can control and use these financial resources to fund activities that threaten the security of Latvia and its partner countries, it is planned to amend the Corporate Income Tax Law.
Henceforth, a 50% tax will be withheld in Latvia from payments and dividends paid from Latvia to persons located in tax-free countries or territories, instead of the previously set 20% tax. Also, an automatic exemption from withholding tax for payments for goods supplies will no longer be applied if these goods are purchased at market prices.
Expansion of SRS data accessibility for credit information bureaus and clarification of cash restrictions for consumer lenders (Draft Law No. 1065/Lp14)
Adopted in the 2nd reading on 05.03.2026; Referred for submission of proposals until 19.03.2026
Amendments to the Law “On Taxes and Fees” plan to expand the availability of credit information for natural persons. This would allow credit information bureaus to receive data at the disposal of the SRS and transfer it to the person so that they can obtain complete information about their credit information and obligations in one place. Additionally, it is planned that certain cash transaction restrictions will not apply to licensed consumer credit service providers, similar to how it currently is for credit institutions and payment service providers.
Case Law
Voluntary work in a commercial company: court recognizes the existence of an employment relationship (Case No. A420202025)
Decision adopted on 04.03.2026
The Administrative District Court examined a case on whether a commercial company can qualify a person’s work as voluntary work if the person actually performs duties necessary for the company’s economic activity. During an SRS audit, it was found that a private individual regularly performed administrator functions at the company – scheduled patients by phone and electronically, used the company’s information systems, and performed other administrative tasks. Although a voluntary work agreement without remuneration had been concluded between the parties, the SRS concluded that the factual circumstances indicated the existence of an employment relationship and calculated mandatory state social insurance contributions for the company in the amount of EUR 2,863.56 and late payment interest of EUR 258.68.
The court agreed with the SRS conclusions, emphasizing that the factual circumstances of work organization, rather than the name of the agreement, are decisive in the qualification of employment relations. The person regularly performed tasks necessary for the company’s operation using the company’s resources and following its instructions; therefore, the relationship essentially corresponded to an employment relationship. The court also pointed out that voluntary work is aimed at public benefit and is not intended to ensure a merchant’s profit-making activities; thus, the SRS decision was recognized as lawful.
Right to support for marked diesel fuel is assessed based on declaration data (Case No. A420119824)
Decision adopted on 05.03.2026
The Administrative District Court evaluated a dispute regarding the right to receive support for marked diesel fuel with a reduced excise tax rate. The Rural Support Service initially granted the applicant 3,679.67 liters of fuel for the 2023/2024 economic year, but later found that the applicant’s annual income declaration for 2022 submitted to the State Revenue Service did not show income from agricultural production, and refused the support.
The applicant explained that the income for the grain harvest grown in 2022 was received only in 2023; therefore, it was not reflected in the 2022 declaration. The court rejected the application, stating that the criteria for receiving support are checked according to the declaration submitted to the SRS for the previous taxation year. Since the relevant income was not shown in the declaration, the applicant did not meet the conditions for receiving support. The court also recognized that there is no contradiction between the law and the Cabinet regulations clarifying the income verification procedure.
DISPUTE RESOLUTION
Draft Legislative Acts
Expansion of judicial discretion for the protection of the financial interests of a good-faith real estate acquirer in criminal proceedings (Draft Law No. 1243/Lp14)
Adopted in the 1st reading on 05.03.2026; Referred for submission of proposals until 16.03.2026
The draft law amends Section 360 of the Criminal Procedure Law to strengthen the court’s ability to protect the financial interests of a good-faith acquirer in the case of real estate if its return to the victim is not fair. The current imperative norm provides for the mandatory return of property to the victim; however, in atypical situations, this can create disproportionate and unfair consequences for the good-faith acquirer. The new regulation will allow the court, as an exception, to leave the property at the disposal of the good-faith owner, evaluating the specific circumstances and observing the principles of fairness and proportionality. The draft law also excludes the requirement for the Cabinet of Ministers to develop additional regulation for the protection of a good-faith acquirer, as the recovery of losses takes place in accordance with civil procedure.
Regulation on the transfer of information obtained during operational activities to other institutions will be clarified (Draft Law No. 1252/Lp14)
Referred to committee on 12.03.2026
Amendments to the Operational Activities Law are being developed following the 2025 Senate judgment in the so-called “Cartel Case,” which indicated that the regulation on the transfer of information obtained during wiretapping to other institutions is not sufficiently clear.
The law is intended to clarify that information obtained during operational activities can be transferred to other institutions, for example, for the investigation of competition violations or disciplinary violations. At the same time, it is established that this is permissible only if it is necessary for the protection of important state or public interests and does not excessively restrict a person’s fundamental rights. Additionally, an obligation to document the transfer of information is established, indicating the institution, justification, and volume of information transferred. The classification of information will also be clarified, establishing that it can be restricted access information or a state secret.
Case Law
ECHR decision in a case regarding the absence of a violation of the right to a hearing within a reasonable time (Application No. 39639/18)
Announced on 05.03.2026
The European Court of Human Rights announced its decision in the case of Gribuste v. Latvia, rejecting the applicant’s complaint regarding a possible violation of the right to a hearing within reasonable time limits as established in the European Convention for the Protection of Human Rights and Fundamental Freedoms (the Convention).
In the complaint, the applicant stated that the criminal proceedings in which she was recognized as a victim and claimed compensation for the harm caused to her lasted seven years. The Court pointed out that the applicant chose to exercise her right to compensation in civil proceedings, where the national court satisfied her claim for debt recovery, granting her the same amount she had requested within the framework of the criminal proceedings.
Given that the applicant’s claim for debt recovery was examined and satisfied in civil proceedings, the Court recognized that the criminal proceedings were no longer aimed at determining the amount of the applicant’s compensation. The criminal proceedings, about the duration of which the applicant complained, were not based on a charge brought against the applicant, but rather the applicant participated in these proceedings as a civil claimant to request compensation for the harm caused to her. The Court explained that the specific norm of the Convention can be applicable in criminal proceedings if a person proves that the prosecution carried out is inseparable from the person’s ability to bring a civil claim in accordance with national legislation. If the regulatory framework provides a person with an effective opportunity to bring a civil claim regardless of the outcome of the criminal proceedings, the Convention norm is no longer applicable, even if the person had submitted a civil claim within the framework of the criminal proceedings.
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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.