Latvia – 2026 Budget adopted by Parliament

The Latvian Parliament officially approved a major reduction in the VAT rate for several basic food items as part of the 2026 state budget. The changes introduce a temporary 12% VAT rate on essential goods, down from the standard 21%, beginning in mid-2026.

The 2026 Essential Food Pilot Project
The centrepiece of the approved amendments is a one-year pilot project designed to mitigate the impact of rising food prices on household budgets.

Duration:
The reduced rate will apply from 1st July 2026 to 30th June 2027.

Eligible Food Products:

– Bread: All types, including rye, wheat, mixed-flour, and gluten-free.

– Milk: Fresh, sterilized, or pasteurized cow, sheep, or goat milk. (Ultra-sterilized (UHT) milk is specifically excluded and remains at 21%)

– Poultry: Fresh and chilled meat (chicken, turkey, duck, goose, etc.). Frozen poultry is excluded from the reduction.

– Eggs: Fresh poultry eggs in shells.

Permanent Status for Fruits and Vegetables
While the new food categories are part of a temporary pilot, the Parliament also decided to make the 12% VAT rate permanent for fresh fruits, berries, and vegetables typical to Latvia, which become effective from 1st January 2026. This move aims to support local producers and promote healthier eating habits among residents.

Additional VAT Changes in 2026
Beyond food, the 2026 budget package includes language-based restrictions for the 5% reduced VAT rate on books and media. This rate will only apply to publications in Latvian, official EU languages, or languages of OECD member states. Publications in other languages will move to the standard 21% rate.