Add or extract VAT at 21%, 12% or 5%, with the VID source cited.
The standard Latvian VAT rate in 2026 is 21%. A reduced 12% rate applies to medicines, domestic passenger transport, tourist accommodation, household heating, and fresh fruit, berries and vegetables, bread, milk, poultry and eggs. A 5% rate applies to books and the press. Source: the State Revenue Service (VID).
To get the net amount from a VAT-inclusive total, divide it by 1.21 when the standard 21% rate applies, as it does in Latvia in 2026. The VAT itself is the difference between the two. For example, from €121 including VAT: 121 / 1.21 = €100 net, and the VAT is €21. Multiplying by 0.21 would give the wrong answer, because the 21% is calculated on the net amount, not the gross. Rate source: the State Revenue Service (VID).
The registration threshold in Latvia in 2026 is 50,000 euro of taxable transactions within a calendar year. Once you reach it, registering in VID's VAT register becomes mandatory. You may also register voluntarily before reaching it, which is worthwhile when most of your customers are VAT-registered themselves and can deduct the input tax. Source: the State Revenue Service (VID).
Because the percentage is taken from a different base each way. VAT is always calculated on the net amount: at the 21% standard rate in force in 2026, 100 euro plus VAT is 121 euro. Going back the other way, 21% of 121 euro would be 25.41 euro, which is wrong — the correct operation is dividing by 1.21. This is the most common mistake in VAT arithmetic, and the higher the rate, the wider the gap between the two answers.