Legislative Review February 12–19, 2026
REAL ESTATE AND CONSTRUCTION
– The Law on Building Rights for Residential Rental Houses has been promulgated, according to which multi-apartment rental houses can be built on land owned by the state or municipality
– Senate: Co-owners’ consent for construction work is not tied to a specific form of expression of will
– Municipality’s duty to observe proportionality when applying territorial planning requirements
ENERGY
– Regulations of the State Energy Crisis Center
– Latvia, Lithuania, and Germany plan to create a joint electricity grid connection in the Baltic Sea
BANKING AND FINANCIAL LAW
IMMIGRATION
– Amendments to the Immigration Law
ENVIRONMENTAL LAW
– Amendment to the Law “On Pollution”
INTELLECTUAL PROPERTY (IP) & INFORMATION TECHNOLOGY (IT) & DATA PROTECTION
– Data Management Strategy 2026–2030
TAXES
– Regional Court’s decision on SRS decision
– Taxpayer involved in fraud
– Senate’s decision
– Judgment of February 4, 2026
– SRS offers a new mobile application “mans VID”
DISPUTE RESOLUTION
REAL ESTATE AND CONSTRUCTION
Regulatory Acts
The Law on Building Rights for Residential Rental Houses has been promulgated, according to which multi-apartment rental houses can be built on land owned by the state or municipality (Promulgated version)
Promulgated on February 20, 2026
The current regulation stipulates that only non-residential buildings or engineering structures can be built on the basis of building rights. From March 6, 2026, the Law on Building Rights for Residential Rental Houses will come into force, which will change the aforementioned, as well as prevent the possibility of creating new divided properties.
The law stipulates that multi-apartment rental houses can be built on land owned by the state or municipality, using building rights granted through an auction procedure, by concluding a building rights agreement with the winner for a period not exceeding 70 years. Upon termination of the building rights, the constructed rental house will transfer to the ownership of the public entity without compensation.
Case Law
Senate: Co-owners’ consent for construction work is not tied to a specific form of expression of will (Case No. SKA 15/2026) (News on court cases)
Adopted on February 16, 2026
An apartment was built in the attic premises of a residential building, which were handed over to the applicant for use, through unauthorized construction. To legalize the construction, the applicant submitted a construction proposal, but the responsible institution refused to issue a building permit, stating that one of the co-owners of the real estate had not joined the protocol authorizing the manager to sign documents on their behalf for the legalization of the construction, and therefore the construction proposal was not considered to be coordinated with all co-owners.
A purchase agreement, which includes a condition that the co-owner waives the use of the basement and other attic premises and does not object to apartments being built there, may possibly be considered as consent for the reconstruction of the attic premises. The Senate recognized that when evaluating the existence of consent, the unambiguousness of the expression is important. If the will is clearly expressed and provable, consent is considered to have occurred regardless of whether it is included in a separate document or as part of another civil transaction. It must be clear from the consent that the co-owner has indeed agreed to a specific type of construction work in the specific part of the co-owned property. The court must assess whether it is sufficiently clear from the purchase agreement what construction the co-owner agreed to. Consent can also be given before the development of a construction project if the co-owner wished to agree to construction in general, rather than to specific construction works. Furthermore, it is irrelevant that the co-owner who did not give consent no longer owns the respective notional part of the property, because consent once given is binding on the new co-owner as well and does not need to be obtained anew.
If, upon re-examining the case, it is found that the consent of the respective co-owner for construction was nevertheless not obtained, the court will have to assess whether the consent received from the new co-owner is sufficient to recognize that there is a basis for issuing a building permit to the applicant.
Municipality’s duty to observe proportionality when applying territorial planning requirements (Case No. A420248423)
Adopted on February 13, 2026
By a decision of the institution, the applicant was obliged to demolish or relocate a fence built in 2003 because it is located within the red lines of the street, violating the Building Regulations of the Riga territorial plan. The Regional Court recognized that the fence is a structure for which a building permit was required in 2003, and furthermore, the municipality has the right to set requirements for the placement of fences within the red lines in the territorial plan.
The court rejected the department’s argument that in this specific case, a mandatory administrative act should be issued without any considerations of expediency, stating that regulatory acts do not provide for an automatic obligation to always demand the demolition of a fence. Even in the case of a mandatory administrative act, the institution must assess proportionality, especially if a person’s property rights are restricted. Since it was not found that the fence endangered public interests or interfered with infrastructure maintenance, and the municipality’s action was based primarily on a neighbor’s complaint, the court found the imposed obligation disproportionate. The municipality’s decision was annulled, while acknowledging that, if factual circumstances change, the municipality could adopt a new, properly reasoned decision.
ENERGY
Draft Regulatory Acts
Regulations of the State Energy Crisis Center (Project ID: 26-TA-172)
Submitted for coordination February 18, 2026 – March 4, 2026
The planned changes aim to clarify and expand the Center’s competence, defining its operations not only during a declared national energy crisis but also for the timely prevention of crisis threats. Entities obliged to provide the Center with information on the state of the energy supply system will be determined, and crisis analysis and development of proposals for future risk mitigation are foreseen.
In connection with the amendments to the Energy Law of December 7, 2023, SIA “Publisko aktīvu pārvaldītājs Possessor” (Public Asset Manager Possessor Ltd.), which ensures state oil product reserves, will be included in the Center’s composition. Closer cooperation with the Crisis Management Center and other institutions involved in crisis management is also stipulated, as well as ensuring information exchange with national security institutions and the Prime Minister’s office.
Industry News
Latvia, Lithuania, and Germany plan to create a joint electricity grid connection in the Baltic Sea (read here)
Published on February 19, 2026
The “Baltic – German PowerLink” will connect all three countries, as well as offshore wind farms located on the Baltic Sea coast, thereby strengthening energy supply security and energy independence. Electricity transmission system operators Germany’s 50Hertz, Latvia’s AS “Augstsprieguma tīkls” and Lithuania’s AS “Litgrid” will develop a technical and economic concept for project implementation by autumn, which will allow them to apply for European Union funding for projects of common interest.
According to previous studies and initial planning, there will be an approximately 600 km long submarine cable connection between Germany and a connection point on land in Latvia (southwestern part) or Lithuania (northwestern part). An electricity hub is planned to be built on land, through which approximately 2 GW (gigawatts) of offshore wind power can be directed both to Germany via the “Baltic-German PowerLink” and transferred to the Baltic states’ transmission system, managed by AST and Litgrid.
BANKING AND FINANCIAL LAW
Case Law
Senate: The concept of restrictions on economic activity and the court’s duty to ensure effective legal protection in Covid-19 support allocation cases (Case No. SKA-6/2026)
Adopted on February 12, 2026
The applicant approached the State Revenue Service (SRS) with several applications, requesting support due to restrictions on economic activity imposed to reduce the spread of Covid-19. The SRS refused the applicant, stating that her income decline was not directly related to the epidemiological safety measures established in the country.
The Senate concluded that the concept of “restrictions on economic activity” was incorrectly interpreted in the case, explaining it too narrowly as direct, legally prescribed restrictions for a specific company. The Senate emphasized that indirect or collateral restrictions, which affected the company’s economic activity and income due to Covid-19 regulations, should also be considered as such restrictions.
It was also recognized that the regional court had unjustifiably changed the subject matter of the application, considering that after the expiration of the specified term, it was no longer possible to decide on the issuance of a favorable administrative act. Such an approach does not comply with the principle of effective legal protection, as it may prevent a person from receiving support.
IMMIGRATION
Draft Regulatory Acts
Amendments to the Immigration Law (Draft Law No. 1136/Lp14)
Awaiting proposals until March 5, 2026
The draft law will stipulate that a temporary residence permit will be annulled if competent state authorities determine that a foreigner poses a threat to public order and safety, including systematically (three or more times within a year) committing administrative offenses in the areas of administration, public order, road traffic, or child rights protection.
ENVIRONMENTAL LAW
Draft Regulatory Acts
Amendment to the Law “On Pollution” (Draft Law No. 1222/Lp14)
Submitted to Saeima on February 19, 2026
To protect people from undesirable or harmful noise, the municipality will be able to issue binding regulations providing for the issuance of permits for events or entertainment that would generate noise, requirements and procedures for the use of sound-amplifying equipment, as well as requirements and supervision conditions regarding sound insulation.
INTELLECTUAL PROPERTY (IP) & INFORMATION TECHNOLOGY (IT) & DATA PROTECTION
Draft Regulatory Acts
Data Management Strategy 2026–2030 (Project ID: 26-TA-347)
Submitted for public discussion from February 13, 2026 – March 15, 2026
The plan foresees five main lines of action, covering strengthening governance, developing artificial intelligence, as well as improving employees’ digital skills and opening data to the public. The strategy aims to reduce bureaucracy and administrative burden by introducing the “once only” principle and standardized data exchange solutions, such as the DAGR platform. A significant role is assigned to the National Data Council and the creation of data laboratories to promote innovation and ensure secure data processing. National policy will be aligned with the requirements of the European Union’s single data space.
TAXES
Case Law
Regional Court’s decision on SRS decision (Case No. A420196323)
Adopted on February 11, 2026
The State Revenue Service (SRS) issued a decision imposing additional tax payments on a company, based on a data compliance check that revealed discrepancies in accounting records. The SRS considered that the amounts issued to the company’s official were equivalent to income from salaried work, subject to taxation.
The Administrative Regional Court annulled the SRS decision, finding that the service had not fully evaluated the accounting documents and mutual settlements, which confirmed that the issued amounts were related to the acquisition of vehicles, not the payment of wages. The court emphasized that only payments or benefits that are essentially related to employment relationships are subject to wage taxes. The fact that a person is a company official and the sole owner does not, in itself, prove that all mutual payments are remuneration for work – the tax administration must prove the connection of these payments to employment relationships.
The court criticized the SRS for not essentially evaluating the accounting documents and purchase agreements, from which it could be concluded that the board member and sole owner had acquired vehicles for the company’s needs. It was noted that formal deficiencies in accounting or document preparation do not, in themselves, provide grounds for assessing wage tax – the set of circumstances provided for in Article 8, Paragraph Two of the Law “On Personal Income Tax” must be established, and it must be proven that the payments are based on employment relationships.
The court emphasized that a formal review of documents is not sufficient – the actual existence and economic substance of the transaction must be evaluated. The fact that the owner did not issue a cash loan to the company in the classic form, but financed it by acquiring assets with deferred payment, does not exclude the existence of a creditor relationship. At the same time, the court recognized that the tax assessment was carried out within the framework of a data compliance check, which does not require supporting documents for economic activity. Although this complies with the regulation of this procedure, such a check alone is not sufficient to justify the wage tax assessment in the specific circumstances.
Taxpayer involved in fraud (Case No. A420126422)
Adopted on February 6, 2026
The case concerns a decision by the State Revenue Service (SRS) that challenged a company’s declared transactions with scrap metal suppliers, alleging that the company knew or should have known about its involvement in tax fraud.
The Senate of the Republic of Latvia affirmed that the mere fact that goods were not received from the supplier indicated in the documents is not sufficient to deny the right to deduct input tax. Evidence is required that the taxpayer knew or should have known about its involvement in fraud.
The right to deduct input tax cannot be denied without establishing fault – liability without fault is not permissible, as recognized by the jurisprudence of the European Union Court of Justice. Tax assessment cannot be based on isolated or formal circumstances – the SRS must establish a complete, mutually consistent body of evidence regarding the taxpayer’s involvement in a fraudulent scheme.
The cassation instance does not re-evaluate facts and evidence – mere disagreement with the findings of the appellate instance is not a basis for cassation proceedings.
Senate’s decision
Adopted on February 12, 2026
Person A submitted an application to the Administrative District Court to recognize as unlawful and suspend the actions of the State Revenue Service related to the collection and processing of personal data. The judge refused to accept the application, considering that the information request was an interim decision that could not be appealed in court.
The Senate found that the judge had erroneously assessed the essence of the application, as it concerned data collection from other sources, not a request to the applicant. An SRS information request can be appealed separately if it is mandatory and non-compliance can lead to adverse consequences. Automatically classifying an interim decision as unappealable is not permissible.
Significantly, it was found in the case that the SRS had not initiated any specific administrative process in which the applicant would be the addressee of a possible administrative act. Thus, information about the person was obtained outside a specific administrative process. The Senate recognized that such acquisition and processing of personal data outside a specific process is a factual action within the meaning of the Administrative Procedure Law and is independently reviewable in administrative court. Unjustified data processing can, in itself, cause a violation of fundamental rights, regardless of further consequences. In such cases, the court must assess the legal basis, scope, and compliance of data processing with fundamental rights protection standards and data protection regulations.
2026. Judgment of February 4, 2026
Person A submitted an application to the court, challenging the decision of the State Revenue Service, which refused to provide information about the overpaid personal income tax amount of her deceased husband in 2023. Person A wished to include this information in the inheritance mass. The court recognized the service’s decision as unlawful and ordered it to provide the requested information.
The Administrative District Court recognized that a heir’s request for information about a deceased person’s tax overpayment should be considered an information request within the meaning of the Freedom of Information Law, even if the requester did not directly refer to this law. The institution must evaluate the content of the request, not just its legal form.
Information about a person’s income and tax overpayment is restricted access information because it falls within the sphere of private life. However, such information may be provided if the legitimate interest of the requester in the specific case outweighs the protected interest.
The heir has an objective and legally protected interest in receiving information about the deceased’s tax overpayment to exercise the rights provided for in Article 16, Paragraph One, Clause 10 of the Law “On Taxes and Fees” to request a refund of overpayments. Without this information, these rights cannot be realized.
The institution may not refuse to provide information on the grounds that the deceased person has not submitted an annual income declaration. The issue of providing information must be separated from the tax calculation and refund procedure.
The court emphasized that in the case of restricted access information, the institution has a duty to balance interests. If this has not been done and the refusal is based on other considerations, it is unlawful.
The judgment also highlighted that the annotation of the regulatory framework has previously recognized that heirs have the right to receive information from the SRS about the deceased person’s tax overpayment, and this issue should be resolved through the application of legal norms, not by a formal refusal.
Industry News
SRS offers a new mobile application “mans VID” (read here)
Published on February 18, 2026
The application allows convenient and secure use of frequently used tax services: taking photos and sending supporting expense documents to the SRS EDS, as well as managing the wage tax book.
DISPUTE RESOLUTION
Regulatory Acts
Amendments to the Submissions Law (Promulgated version)
Promulgated on February 20, 2026
On March 1, 2026, amendments will come into force, providing for a clearer and more modern procedure for reviewing citizens’ submissions. They clarify the actions of institutions in cases where a submission is not within their competence, providing both the duty to timely forward it to the responsible institution and the possibility, for reasons of expediency, to inform the submitter, indicating the correct addressee. At the same time, the forms of response are expanded – in the future, with the submitter’s consent, a response may also be given orally or in another appropriate manner.
The law sets a reasonable and clearly defined deadline for providing a response – no later than 10 working days, but in more complex cases, when additional information or cooperation with other institutions is required – within one month. The procedure for reviewing submissions made within the framework of mass or organized campaigns is also streamlined, allowing the institution to provide a single common response and publish it. Additionally, cases where a submission may be left without review are clarified, including if it is not related to public administration functions or is submitted in bad faith.
Draft Regulatory Acts
Amendments will establish new grounds for criminal liability (Draft Law No. 1068/Lp14)
Adopted in 2nd reading on February 12, 2026.
The Criminal Law will be supplemented with a new article establishing liability for distributing intimate materials without the consent of the person visible in the video recording or image. Several new proposals have been supported, including supplementing the Criminal Law with another article establishing liability for the unlawful use of cultural and national heritage during armed conflict and for exploiting a person subjected to human trafficking.
Case Law
Senate: Criminal liability for espionage arises if its purpose is to transfer state secrets to a foreign state (Read more)
Adopted on February 12, 2026
The Senate concluded that the legislator intended to provide for criminal liability only for the collection of state secrets that is associated with the intent to transfer state secrets to a foreign state or foreign organization. This is also indicated by the systemic interpretation of the relevant legal norm – if the collection of state secrets were not associated with such intent, a situation contrary to the internal logic of the Criminal Law would arise, where a less harmful act involving state secrets (collection) would be recognized as a particularly serious crime and would entail a harsher penalty than for a more harmful act (disclosure), which in the understanding of the Criminal Law is a serious crime if committed intentionally, but a less serious crime if committed due to negligence. Therefore, the appellate court’s position that criminal liability for the unlawful collection of state secrets arises regardless of intent cannot be considered reasonably foreseeable and consistent with the essence of espionage.
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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 lawyer and a partner at RockBridge Legal. Since 2008, Alisa has advised clients and provided legal assistance on 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.