Value-added tax in Latvia brings about 30% of the budget revenue, so it is the second most profitable tax after the mandatory State Social Insurance contributions; the third is personal income tax.

The EU VAT Directive provides that the standard rate of this tax may not be less than 15%.

The lowest rate among EU Member States is in Luxembourg – 16%, while the average rate in the EU is 21%, which is also Latvia's choice. Hungary has the highest rate at 27%.