News

To strengthen the transparency of the financial system and at the same time protect individuals whose data is included in the registers of actual owners - ultimate beneficial owners (UBOs) - the government has approved a draft law amending The Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing, in order to ensure that Latvian legislation complies with EU Directive (EU) 2024/1640, which sets out unified mechanisms for protecting the financial system against money laundering and terrorism financing.

Starting 9 October 2025, a new EU-wide banking regulation takes effect requiring financial institutions to verify that the recipient's name (or business name) matches the account number (IBAN) before executing any payment. The rule applies to all banks and payment service providers operating within the EEA.

Starting 1 January 2026, access to the State Revenue Service (VID) Electronic Declaration System (EDS) will only be possible using secure electronic identification tools. This change aims to strengthen data protection for both individuals and businesses in Latvia.

According to the Estonian income tax legislation, the fringe benefit taxation applies to loans granted below the fair market value interest rate to the employee or member of the board or council, except if the interest at the moment of the payment of interest is at least twofold of the interest rate of the European Central Bank applicable to the main refinancing operations. From 1 July 2025, the referred twofold amount of interest rate has decreased from 6,3% to 4,3%.

As of 10 June, Latvia has implemented significant amendments to its legal framework governing international and national sanctions. These changes establish clearer administrative and criminal liability for violations and aim to strengthen enforcement mechanisms.

In a move aimed at giving businesses more time to adapt, the Latvian government has decided to postpone the mandatory use of structured electronic invoices (e-invoices) for private businesses. Originally slated for 2026, the requirement will now take effect on 1 January 2028, following the Saeima’s recent approval of amendments to the Accounting Law.

On 14 April, the Council of the European Union approved the so-called "Stop-the-Clock" directive, which aims to postpone the implementation deadlines for sustainability reporting requirements. These changes are part of the broader "Omnibus I" initiative, which aims to simplify the EU sustainability framework and reduce the administrative burden on companies. This postponement of deadlines is good news for businesses, providing an opportunity to prepare in a quality way for sustainability reporting, which will become the norm for all companies in the future.