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Latvia approves VAT reduction for traditional domestic produce

From 1 January 2018, the reduced VAT rate will apply to Latvia's traditional vegetables, fruits and berries. Corresponding amendments to the VAT Law amendments were approved at the meeting of the Seimas Committee on Budget and Finance (taxes) before the final reading.

Before the meeting of the commission, many proposals had been made to reduce VAT for other food products and sectors, but the deputies did not support any of the initiatives. The reduced VAT rate will apply to washed, peeled, cut and packaged vegetables, fruits and berries, but not to frozen, salted or dried ones.

The VAT rate of 5% is planned to be introduced in order to reduce the size of the shadow economy, increase the competitiveness of companies operating in the legal market and reduce vegetable, fruit and berry prices, thus promoting their consumption.

The reduced rate on Latvian vegetables, fruits and berries will be valid for three years, starting from 1 January 2018. For now, the standard VAT rate of 21% still applies.

Some of the fruits benefiting from this are berries, pears, plums, strawberries, raspberries, blackberries, black and red currants, gooseberries, blueberries, cranberries and elderberries.

As for vegetables, the new VAT rate will apply to Latvian potatoes, onions, garlic, leeks, cabbage, broccoli, lettuce, chicory, carrots, turnips, Jerusalem artichokes, radish, parsley, beets, cucumbers, peas, beans and other legumes, celery, spinach, rhubarb, courgettes, pumpkin and fennel, as well as basil, dill, mint, coriander and other herbs.


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