Reverse charge VAT in construction

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Construction services in Latvia fall under the reverse charge mechanism (Article 142 of the VAT law): when both contractor and client are VAT-registered, the recipient accounts for and pays the VAT.

What the invoice looks like

If the client is a private person or not VAT-registered, issue a normal 21% VAT invoice instead. The form has a reverse charge mode that adds the note automatically.

Frequently asked questions

Does the reverse charge cover materials?

If materials are part of the construction service, they fall under the reverse charge together with the labour. A pure material sale normally carries standard VAT.

What if I apply Article 142 by mistake?

Incorrect VAT treatment forces corrections for both parties — always verify the partner VAT status in the VID database first.

Do subcontractors also issue reverse charge invoices?

Yes — in a contractor↔subcontractor chain between VAT payers the same Article 142 rules apply.

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