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LAW ON VALUE ADDED TAX (1 May 1995 as amended through 12 December 2002) (unofficial translation, excerpt)

CHAPTER I. General Provisions

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Section 3. Persons Taxable with Value Added Tax and their Registration

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(3) If the total value of the taxable supply of goods and services provided by natural or legal persons and groups of such persons bound by a contract or agreement, or by representatives of such groups, during the preceding 12 months has attained or exceeded 10 000 lati, they shall be registered with the State Revenue Service as taxable persons not later than one month after attaining or exceeding such sum. (…)

(5) If the total value of taxable transactions carried out by natural or legal persons and groups of such persons bound by contract or agreement, or by representatives of such groups, has not attained the sum specified in Paragraph three of this Section during the preceding 12 months, they have the right to be registered with the State Revenue Service as taxable persons pursuant to the procedures prescribed by the Cabinet.

(51) If natural or legal persons and groups or their representatives associated by contract or agreement with such persons, within a period of 12 months, have performed only one taxable supply of goods or provided only one taxable service, the value of which reaches or exceeds 10 000 lati, or as result of this transaction the total taxable value performed within a period of 12 months has reached or exceeded 10 000 lati, they have the right not to register with the State Revenue Service as a taxable person, if this transaction is not associated with the economic activities of the persons referred to.

(52) If the transaction referred to Section 51 of this Section within the period of the next 12 months is repeated, then the persons, not later than within a period of one month after the performance such a repeated transaction, shall register with the State Revenue Service as a taxable person.

(6) Taxable persons have a right to a deduction of input value added tax.

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Chapter II. Exemptions and Relief

Section 6. Exemptions

(1) Tax shall not be imposed on the following supplies of goods and services:<

1) services (including catering) which are provided by retirement or old people’s homes, welfare and rehabilitation centres and specialised welfare centres or homes, which are fully or partly financed from the State budget or budgets of local governments;

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5)  fees for professional training or retraining of the unemployed, which is organised by the State Employment Service;

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8) theatre, cinema and circus shows, concerts, performances in cultural institutions, visits to museums, exhibitions, zoos and botanical gardens, performances for children and for charitable purposes, performances of amateur arts groups and sporting events;

9) health services, supplies of medicaments and medicinal products inland according to a list approved by the Ministry of Welfare and harmonised with the Ministry of Finance;

91) medical services according to a list approved by the Ministry of Welfare and harmonised with the Ministry of Finance;

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11) betting, raffles (lotteries) and other forms of gambling;

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16) scientific research, which is performed with funds from public foundations, the State budget and the budgets of Local Governments, or international institutions;

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20) educational and scientific literature, first publications of original literature and publications intended for children in the Latvian language published in Latvia in accordance with lists approved by the Ministry of Education and Science, as well as services of printing-offices in respect of the production (formation) of such literature;

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22) services provided by co-operative societies (except the supply of goods) to the members of the co-operative society:

a) maintenance and management of residential houses

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25)  fire-safety services which are provided by the Fire-fighting and Rescue Service of the Ministry of the Interior, and fire-safety services of institutions, undertakings (companies) and organisations, voluntary fire-fighting societies and voluntary fire-safety associations; and

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27) carriage of schoolchildren that is conducted by carriers licensed specially for this purpose if these services are financed from local government budgets.

(2) Tax shall not be imposed on the importation of the following goods:

1) importation of goods mentioned in Paragraph one of this Section;

2) consignments of foreign financial assistance pursuant to procedures prescribed by the Cabinet;

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5)  the importation of such goods that are not subject to customs duty pursuant to Chapters 6 and 9 of the Law On Customs Duty (Tariffs), except supplies of goods on which a 0 per cent rate of customs duty is imposed.

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Section 7. Application of 0 Per Cent Tax Rate

(1) A 0 per cent tax rate shall be applied to the following:

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7) supplies of goods and services which have been provided in return for foreign financial assistance funds – in accordance with procedures prescribed by the Cabinet;

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