Entrepreneurs and the State Revenue Service (VID): Rising Tension and a Surge in Criminal Proceeding

In recent years, Latvia has seen a significant rise in conflicts between entrepreneurs and the State Revenue Service (VID), with more of these disputes escalating into criminal proceedings initiated by the State Police.

Although the legal framework has not changed, VID's approach has become notably stricter — especially in cases involving cross-border transactions and VAT application. While there were 49 criminal cases initiated in 2021, that number more than doubled to 105 in 2024 — an increase of over 100%.

Kristaps Leonards Limbergs, Attorney at BDO Law, comments:

“We increasingly see that even honest entrepreneurs come under scrutiny if their transactions are not thoroughly documented. Today, having a real transaction is not enough — everything must be legally provable.”

Our experience at BDO Law shows that companies must be prepared. Accurate documentation, legal protection, and preventive measures can be crucial in avoiding criminal proceedings and ensuring business continuity.

📄 Read more on the topic (in Latvian):
What’s happening in Latvia – conflicts with the VID are becoming more frequent