Legislative Review February 20–26, 2026
REAL ESTATE AND CONSTRUCTION
– Constitutional Court begins reviewing a case on the deletion of lease rights registered in the Land Register for state-owned real estate
– Municipality is not obliged to coordinate building permits with land tenants
ENERGY
– Amendments to the Energy Law
– Kuldīga Old Town Preservation and Protection Law
– Amendments to the Public Procurement Law
– Project submitted for approval regarding the construction of the “K2 Ventum” wind farm
– Project submitted for approval regarding the construction of the “Kurzeme” wind farm and its associated infrastructure
REGULATED LAW
ENVIRONMENTAL LAW
INTELLECTUAL PROPERTY (IP) & INFORMATION TECHNOLOGY (IT) & DATA PROTECTION
TAXES
– Amendments to the Law “On Taxes and Fees” clarify credit information availability and exceptions to cash restrictions
– Inclusion of Solidarity Tax in Personal Income Tax calculation
– Submission of false information in VAT declarations
– Reverse VAT and input tax: partner violations alone are not sufficient to deny rights
– Case submitted to court regarding tax evasion
– On filling out the corporate income tax declaration when choosing to pay tax on dividends at a 15 percent rate
– On compensation for electric car costs
– Self-employed tax calculations 2026
– Transfer Pricing Documentation Methodology
DISPUTE RESOLUTION
– Amendments to the Constitutional Court Law have entered into force, improving and modernizing the litigation process
– Amendments announced that streamline norms regarding pharmaceutical activity licensing
– In the 1st reading, it was decided to provide for criminal liability for prohibited agreements in procurements and defined when this crime is considered to be committed on a large scale
– Amendments to the Civil Procedure Law plan to fully automate the process of compulsory execution of obligations under warning procedure
– Amendments to the Civil Procedure Law will clarify the co-ownership division process
– Supreme Court Bulletin for February 2026
REAL ESTATE AND CONSTRUCTION
Case Law
Constitutional Court begins reviewing a case on the deletion of lease rights registered in the Land Register for state-owned real estate (Case No. 2025-13-01)
Case review begins on February 24, 2026
After the cooperative society was excluded from the Enterprise Register, all its property, as ownerless property, became state property. Among other things, the said property included real estate with garages, which were leased to several natural persons according to lease agreements registered in the Land Register. In accordance with the contested norm (Civil Law, Article 416, seventh paragraph), when registering state ownership rights in the Land Register, entries regarding the said lease agreements must be deleted. Following the Senate’s application, a case was initiated regarding the norm’s compliance with Article 91, first sentence (principle of equality) and Article 105 (right to property) of the Constitution.
Municipality is not obliged to coordinate building permits with land tenants (Case No. AA43-0361-26)
Adopted on February 25, 2026
Cēsis Municipality Council approved a building permit on municipal property, despite objections from tenants. Persons A and B challenged the said building permit, stating that the construction worsens the use of their leased land plots and violates their legal interests. The court rejected the complaint, ruling that the municipality is not obliged to coordinate construction with land tenants if the construction takes place on municipal land and does not affect the tenants’ legal interests.
ENERGY
Legal Acts
Amendments to the Energy Law (Promulgated version)
Promulgated on February 26, 2026; Enters into force on March 12, 2026
Henceforth, in cases where an independent heat energy producer sells heat energy to a heat supply system operator within the scope of competitive heat energy volume, the price may not exceed the maximum purchase price set by the regulator.
The relevant provision enters into force on June 1, 2026. For heat supply system operators supplying heat energy to users exceeding 2,000,000 megawatt-hours per year, it applies from October 1, 2026, and for other heat supply system operators, from October 1, 2028.
The regulator sets the maximum heat energy purchase price for a heat supply system operator supplying heat energy to users exceeding 2,000,000 megawatt-hours per year by June 30, 2026. For others, the purchase price is set by June 30, 2028.
Kuldīga Old Town Preservation and Protection Law (Promulgated version)
Promulgated on February 26, 2026; Enters into force on March 12, 2026
The law and its annexed appendices define territories where objects with a height of 350m+ or 260–350m, or other objects that may affect the special universal value of Kuldīga Old Town, are prohibited from being located, require an initial heritage impact assessment, or a simple heritage impact assessment.
To promote institutional cooperation and decision-making regarding the preservation, protection, and development of Kuldīga Old Town, the Kuldīga Old Town Cooperation Council has been established. Information about the intention to place any of the aforementioned objects is provided to the council by the respective municipality (or other institution) within 10 days after receiving an application for an environmental impact assessment, territorial planning, or construction regulating normative acts in the prescribed manner.
Draft Legal Acts
Amendments to the Public Procurement Law (Draft Law No. 1035/Lp14)
Adopted in the 2nd reading on February 26, 2026; Submitted for proposals by March 9, 2026
The amendments define cases where the law does not apply, for example, to specific legal services, arbitrations, and the creation of state food or medicine reserves in case of threat. A significant part is dedicated to bidder exclusion rules, including restrictions on persons with tax debts, criminal convictions for corruption, or connections with Russia and Belarus. The draft law establishes the procedure by which candidates can prove their reliability and how contracting authorities must verify information in state information systems.
Project submitted for approval regarding the construction of the “K2 Ventum” wind farm (25-TA-2896)
Approval from February 27, 2026 to March 6, 2026
Project for the construction of the “K2 Ventum” wind farm and the establishment of an electricity transmission connection in Saka parish, South Kurzeme region, and Alsunga parish, Kuldīga region.
As a result of the previous public discussion, several objections were submitted, expressing concerns about sounds, noise, and environmental impact. In response, the State Environmental Service stated that all environmental aspects have been thoroughly and repeatedly evaluated, and an opinion has been provided, concluding that the environmental impact assessment (EIA) was carried out appropriately and no impacts precluding the planned activities have been identified. At the same time, a series of conditions have been set that must be observed and ensured when designing and implementing the planned activities. Also, responsible sector institutions (14 in total) have provided their opinions according to their competence and have not found any non-compliance with the specific requirements of the respective sector.
Project submitted for approval regarding the construction of the “Kurzeme” wind farm and its associated infrastructure (25-TA-2790)
Approval from February 27, 2026 to March 6, 2026
Several objections have been submitted, stating that a complete EIA has not been carried out, and expressing concerns that the construction of wind farms in Latvia will irreversibly damage the traditional landscape.
REGULATED LAW
Draft Legal Acts
Saeima rejects draft laws on restricting economic activity on private property in specially protected nature territories (Draft Law No. 1229/Lp14) and private forest property (Draft Law No. 1227/Lp14)
Rejected in Saeima on February 26, 2026
Amendments to the Forest Law and the Law “On Specially Protected Nature Territories,” stipulating that the extent of the prohibition of economic activity on land owned by a private person and private forest property may not exceed 30% of the total area of the respective land or forest.
Additionally, a draft law on Amendments to the Law “On Compensation for Restrictions on Economic Activity in Protected Areas” (Draft Law No. 1226/Lp14) was submitted to and rejected by the Saeima, which would have stipulated that compensation for restrictions is granted in the form of an annual support payment corresponding to the market value that the owner does not obtain due to the restrictions.
ENVIRONMENTAL LAW
Draft Legal Acts
Amendment to the Law “On Pollution” (Draft Law No. 1222/Lp14)
Adopted in the 1st reading on February 26, 2026; Submitted for proposals by March 5, 2026
The municipality, for the protection of people against unwanted or harmful noise, will be able to issue binding regulations that provide 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.
Draft Cabinet of Ministers regulations developed to reduce damage to natural resources in historical peat extraction sites (Project ID: 25-TA-2249)
Approval from February 5, 2026 to February 12, 2026
Support provides for investments not only in state-owned but also in municipal and private properties in Kurzeme, Latgale, Vidzeme, and Zemgale (excluding the Riga region). Revitalization includes peatland renaturalization, forest and wetland restoration, creation of water bodies, as well as the establishment of perennial plantations, thereby combining emission reduction with the return of territories to economic circulation.
Additionally, it is stipulated that projects must be based on a developed revitalization strategy or expert opinions, ensuring the selection of justified and territory-appropriate solutions. The requirements of the EU Nature Restoration Regulation are also taken into account to ensure compliance with European Union objectives.
INTELLECTUAL PROPERTY (IP) & INFORMATION TECHNOLOGY (IT) & DATA PROTECTION
Case Law
Senate: Customs authorities cannot confiscate and destroy goods without an objective assessment of intellectual property rights infringement and the consent of the parties (Case No. SKA-73/2026)
Adopted on February 24, 2026
By a decision of the State Revenue Service, it was decided to confiscate and destroy goods found in a foreign company’s container – toys with sweets – which allegedly infringed the intellectual property rights of a third party to a trademark and designs. The Senate found that the existence of an intellectual property rights infringement had not been sufficiently assessed. According to the norms of Regulation (EU) No. 608/2013, customs authorities can confiscate and destroy goods only if both involved parties agree to such action. If the declarant or holder of the goods objects, a full investigation into the intellectual property rights infringement must be carried out. The regional court unjustifiably relied on suspicions and risk analysis, rather than an objective assessment of evidence, which contradicts the requirements of the regulation. Furthermore, the Senate emphasized that the court must conduct an independent and objective assessment of evidence, not merely rely on the claims of the intellectual property rights owner.
TAXES
Draft Legal Acts
Amendments to the Law “On Taxes and Fees” clarify credit information availability and exceptions to cash restrictions (Draft Law No. 1065/Lp14)
Adopted in the 1st reading on February 12, 2026; Submitted for proposals by February 19, 2026
The current regulation does not provide for a natural person to receive all applicable credit information in one place through a credit information bureau, nor do cash restrictions apply to licensed consumer credit service providers, although they essentially correspond to the status of financial institutions. The draft law proposes to amend Article 22.1 of the law, expanding the circle of credit information users to include natural persons, thereby allowing the State Revenue Service to provide information about a person’s income to the credit information bureau for transfer to the person themselves. A “one-stop agency” principle will be introduced, allowing a person to receive aggregated credit information in one place for assessing their creditworthiness or for debt consultations.
At the same time, it is clarified that cash usage restrictions do not apply to the services of licensed consumer credit service providers, similar to credit institutions and payment service providers.
The regulation formally expands data availability to the natural person themselves and facilitates obtaining credit information, especially for debt consultation purposes. However, the annotation does not include an evaluation of alternative solutions or a cost-benefit analysis, nor does it provide for an ex-post evaluation. Since SRS information is already available to the person free of charge in the EDS system, the new mechanism primarily creates an additional intermediary – a credit information bureau – with a possible service fee. Expanding the exception from cash restrictions equalizes requirements within the circle of financial institutions, but it also requires careful supervision and control of compliance with AML/CTF requirements.
Case Law
Inclusion of Solidarity Tax in Personal Income Tax calculation (Case No. A420105224)
Adopted on February 18, 2026
The State Revenue Service adjusted a natural person’s annual income declaration, not recognizing the solidarity tax portion as an advance payment of personal income tax, increased the payable personal income tax, and calculated late payment interest. The person challenged the assessment, stating that the relevant solidarity tax portion had already been credited to the budget’s personal income tax distribution account and therefore reduced the payable personal income tax, and also objected to the calculation of late payment interest.
The Administrative Regional Court recognized that personal income tax and solidarity tax are independent taxes with different objects and application procedures; the crediting of a solidarity tax portion to the personal income tax distribution account does not in itself mean that it becomes personal income tax or an overpayment of personal income tax. If the relevant income in the specific situation does not constitute a personal income tax object in a summary procedure, the solidarity tax portion cannot be used to reduce personal income tax. The court also recognized that the State Revenue Service has the right to check and clarify declaration data, and late payment interest is calculated from the tax payment deadline specified in the law, not from the date of the decision.
Submission of false information in VAT declarations (Case No. A420242422)
Adopted on February 19, 2026
The State Revenue Service found that a company had declared fictitious rapeseed oil acquisition transactions in its VAT declarations and, based on the norms of the VAT law, decided to exclude the company from the VAT payer register. The Administrative Regional Court found that the transactions did not occur between the declared persons and that the applicant was aware of involvement in a chain of transactions with a fiscal purpose. Accounting documents, contracts, transport routes, mutual correspondence, contradictions in explanations, and the economic logic of the transactions were evaluated. In its cassation appeal, the applicant objected to the evaluation of evidence, emphasized that the goods actually existed and were further sold, and also claimed that the court had interfered in the organization of business. The Senate refused to initiate cassation proceedings, stating that the regional court had evaluated the evidence comprehensively and in context, and the conclusions were based on a consistent body of indirect evidence, not assumptions. The fact that the goods actually existed and reached the final recipients does not in itself prove that the transactions occurred between the declared persons. The court did not have to ascertain from which merchant the goods were actually obtained if the dispute was about the reality of the specific transaction. The Senate also emphasized that freedom of enterprise does not exclude the court’s right to analyze the factual and economic essence of transactions if it is necessary to ascertain whether false information was knowingly provided in the declaration. Re-evaluating facts and evidence is not within the competence of the cassation instance, and no significant legal issues for the development of jurisprudence have been identified.
Reverse VAT and input tax: partner violations alone are not sufficient to deny rights (Case No. A420179219)
Adopted on February 17, 2026
By a 2019 decision, the State Revenue Service found violations in SIA “A”’s transactions with SIA “B” and SIA “C” and challenged the right to apply reverse VAT and deduct input tax. The Administrative Regional Court, re-examining the case following the Senate’s previous instructions, concluded that scrap metal was actually supplied to the applicant and payment was made, but the SRS had not proven the applicant’s involvement in hidden agreements or the acquisition of fiscal advantages. The court recognized that the partners’ accounting discrepancies alone do not prove the applicant’s bad faith and that it was not established that the applicant knew or should have known about possible tax abuse.
The Senate refused to initiate cassation proceedings, stating that the regional court had evaluated the evidence in context and in accordance with the Senate’s previously provided instructions. The SRS’s objections were mainly aimed at re-evaluating facts and evidence, which is not within the competence of the cassation instance. The Senate emphasized that to deny reverse VAT and input tax rights, it is necessary to establish that the transaction did not occur with the declared partner or that the taxpayer knew or should have known about involvement in an unjustified tax reduction scheme. In the specific case, such circumstances were not proven, and no significant legal issues for the development of jurisprudence have been identified.
Industry News
Case submitted to court regarding tax evasion (read more here)
The West Zemgale Prosecutor’s Office has submitted a criminal case to the Economic Affairs Court against nine persons who, in an organized group over two years, ensured the declaration of fictitious VAT-taxable transactions in the declarations of companies under their control to unlawfully reclaim input tax. The scheme caused losses to the state of 255,584.72 euros in VAT and 435,316 euros in unpaid corporate income tax. The accused also legalized criminally acquired funds amounting to 690,900.72 euros, including through transfers and cryptocurrency. Criminal proceedings have also been initiated for the application of coercive measures to two legal entities, and funds and crypto assets have been seized.
On filling out the corporate income tax declaration when choosing to pay tax on dividends at a 15 percent rate (read more here)
The information material states that when choosing a CIT of 15% on dividends, the calculation must be done manually and then indicated in the CIT declaration, because automatically the declaration only calculates in the general case + the reduced rate must also be taken into account in donation relief calculations. Examples with calculations in “2.4. Dividends in alternative regime”. For example, this regime is not applicable to old profits (applied as before).
On compensation for electric car costs (read more here)
Methodological material on electric cars – supplemented according to a new norm, namely, references from personal income tax regulations have been included, and two examples, including that if an employee rents real estate, compensation cannot be made because the criterion “electricity contract with the employee” is not met.
Self-employed tax calculations 2026 (read more here)
The maximum amount of the mandatory state social insurance contribution object is:
- 2025., 2026. and for 2027 – 105,300 euros;
- 2022., 2023. and for 2024 – 78,100 euros.
Transfer Pricing Documentation Methodology (read more here)
Changes regarding submission and KDP.
DISPUTE RESOLUTION
Legal Acts
Amendments to the Constitutional Court Law have entered into force, improving and modernizing the litigation process (Promulgated version)
Effective from February 18, 2026
The law provides for the possibility to resume the substantive review of a case, or, when reviewing a case in written procedure, to switch to review in a court session if the court deems it necessary to clarify circumstances significant to the case. Regulations on how the court suspends proceedings to ask legal questions to international courts have been improved.
From June 1, 2026, the Constitutional Court process will take place in the unified e-case system, where documents related to the case will be prepared, uploaded, and stored.
Henceforth, the court will be able to refuse to initiate any case where the legal basis included in the complaint is clearly insufficient to satisfy the claim. Previously, such a ground for refusal was applied only in the case of a constitutional complaint.
Judges’ dissenting opinions may be appended not only to judgments but also to decisions on terminating proceedings. Furthermore, it will be the judges’ right, not obligation. The deadline for preparing dissenting opinions has been extended to one month, and a clear procedure for their publication in the official gazette has been established.
The norm prohibiting parties from challenging a Constitutional Court judge has been excluded from the law. Also, henceforth, a Constitutional Court judge who was appointed to the position of prosecutor will be guaranteed the right to return to an equivalent prosecutor’s position after the expiration of their judicial term.
Amendments announced that streamline norms regarding pharmaceutical activity licensing (Promulgated version)
Promulgated on February 20, 2026
From March 6, 2026, amendments to the Law on the Legal Circulation of Narcotic and Psychotropic Substances and Medicines, as well as Precursors, enter into force, which will facilitate the supply of medicines containing substances listed in Schedules II and III to ships. The amendments also clarify licensing requirements for customs warehouses, stipulating that if medicines with Schedule II and III substances are stored for more than 72 hours, a special permit (license) for wholesale trade is required. Deadlines for issuing special permits (30 and 90 days) are set, harmonizing the regulation with the requirements of Directive 2001/83/EC. Furthermore, the mandate of the Cabinet of Ministers has been expanded to determine not only the procedure but also the conditions for issuing, suspending, and revoking permits.
Draft Legal Acts
In the 1st reading, it was decided to provide for criminal liability for prohibited agreements in procurements (Draft Law No. 1192/Lp14) and defined when this crime is considered to be committed on a large scale (Draft Law No. 1193/Lp14)
Adopted in the 1st reading on February 19, 2026; Submitted for proposals by March 19, 2026
The Criminal Law has been amended to strengthen liability for prohibited agreements in procurements, providing for criminal liability for such actions by natural persons involved in the process of prohibited agreements who, acting in the interests of a legal entity, have taken actions to achieve prohibited agreements in a procurement procedure.
The Law “On the Entry into Force and Application Procedure of the Criminal Law” will stipulate that a prohibited agreement in procurements is considered to be committed on a large scale if the total payment for the execution of the procurement contract, including all applicable taxes, except value-added tax (VAT), is not less than 100,000 euros.
Amendments to the Civil Procedure Law plan to fully automate the process of compulsory execution of obligations under warning procedure (Draft Law No. 1198/Lp14)
Adopted in the 1st reading on February 19, 2026; Submitted for proposals by March 19, 2026
The debtor’s place of residence will no longer need to be specified in the application, as the system will obtain this information automatically. According to the changes, the application will be accepted automatically, immediately sending a warning to the debtor with a response form, thereby eliminating the need for courts to prepare initiation or refusal decisions. The warning will be considered served upon its dispatch, and the deadline for submitting objections will be extended from 14 to 30 days. A requirement will be introduced for the creditor to certify that an identical application has not already been reviewed, to prevent repeated recourse to court. The state fee will be payable online. The decision, depending on the debtor’s response, will be generated by the court information system (TIS).
Amendments to the Civil Procedure Law will clarify the co-ownership division process (Draft Law No. 1233/Lp14)
Submitted to Saeima on February 26, 2026
A new chapter is planned to be created in the law to regulate cases concerning the division of co-ownership, to eliminate previous procedural ambiguities and differing court practices. The jurisdiction of cases is clarified, and it is stipulated that the claim must be brought against all co-owners, and the statement of claim must obligatorily indicate the co-owned object to be divided, the desired method of division, and attempts made to reach an agreement before court.
Industry News
Supreme Court Bulletin for February 2026 (Bulletin No. 32)
The new “Supreme Court Bulletin” publishes an overview of the court’s work in 2025: statistics and reports by the chairs of the Senate departments, which also analyze the most significant legal issues and rulings of the past year, reports by the Department of Case Law and Scientific Analysis and the Head of Administration, and a summary by the Chief Justice of the Supreme Court.
A video recording in which an investigative action is partially recorded has been recognized as admissible evidence. Article 143, paragraph two of the Criminal Procedure Law stipulates that a partial recording is not permissible, understood only as a procedural prohibition for the investigator to make a partial recording. Therefore, a partial recording in itself is not to be considered inadmissible evidence within the meaning of Article 130, paragraph two, point 3 of the Criminal Procedure Law;
– The fact that the decisive evidence in a case is the testimony of one person does not in itself restrict the court from rendering a guilty verdict, if the defense is effectively ensured its right to challenge this testimony, and the court has comprehensively evaluated its credibility
The bulletin also provides an insight into the 2025 case law decisions of the Senate’s Department of Criminal Cases, which have updated issues regarding the subject matter of a criminal offense and the object of committing a criminal offense.
Furthermore, the Bulletin summarizes the most significant legal issues in the Senate’s practice, including:
– The concept of “another’s property” in criminal offenses against property
– Criminal liability for dealing with funds in a deceased person’s bank account
– Qualification of the criminal offense provided for in Article 125, paragraph three of the Criminal Law
From March 1, 2026, the Senate and the Constitutional Court will have the right to request an advisory opinion from the European Court of Human Rights on significant issues concerning the interpretation or application of rights and freedoms guaranteed by the European Convention on Human Rights and Fundamental Freedoms or its protocols.
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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
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.
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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.