Exploring the New Digital Standards for B2G and B2B Transactions
In a significant step toward digitizing its financial ecosystem, Latvia has enacted a new e-Invoicing mandate that applies to both public and private sector transactions. Passed on October 31, 2024, by the Latvian Parliament, this legislation mandates the use of structured e-Invoices for business-to-government (B2G) transactions beginning on January 1, 2025, with an extension to business-to-business (B2B) interactions set for January 1, 2026. Here’s a look at the roadmap and potential impacts of this forward-thinking reform.
e-Invoicing Timeline and Compliance Milestones
Under the newly adopted amendments to Latvia’s Accounting Law, businesses will follow a phased timeline for adopting structured electronic invoicing:
- B2G Transactions: Starting January 1, 2025, all companies engaging with public sector entities must use structured e-Invoices.
- B2B Transactions: Mandatory e-Invoicing for transactions between businesses will be effective by January 1, 2026.
Why a Structured Electronic Format? Structured e-Invoices align with EU standards (LVS EN 16931-1:2017 and LVS CEN/TS 16931-2:2017), enabling seamless automation for issuing, sending, and receiving invoices. This structure not only enhances processing efficiency but also improves compliance and transparency in financial transactions.
Impact on Businesses: Enhanced Reporting and Transparency
Beginning January 2026, Latvian-registered companies will also be required to report structured e-Invoice data directly to the State Revenue Service. This comprehensive digital reporting is expected to improve accuracy in tax filings and streamline governmental oversight. The Cabinet of Ministers will outline specific procedures for these requirements by May 2025, providing companies ample time to prepare for compliance.
What This Means for Latvian Businesses
Latvia’s mandatory e-Invoicing reform is a step toward a more efficient and standardized financial infrastructure. As businesses transition to structured electronic invoicing, they will benefit from streamlined administrative processes, reduced operational costs, and increased alignment with EU digital standards.
The e-Invoicing mandate sets Latvia on a path toward greater transparency and efficiency, driving a nationwide digital transformation that positions it as a leader in modern financial practices.
