The Consumer Rights Protection Centre (CRPC), following inspections carried out after the introduction of the reduced value added tax (VAT) rate for four groups of food products (eggs, milk, fresh poultry meat and bread), has concluded that businesses have generally applied the new regulation correctly. Isolated non-compliance cases were identified mainly among smaller retailers, whereas the application of the reduced VAT rate by major retail chains was found to be compliant.
At the beginning of July, the CRPC carried out 64 inspections, and in 7 cases the reduced 12% VAT rate had not been applied to the relevant products. The irregularities were observed primarily during the first days following the entry into force of the new requirement and were mainly attributable to human error. In most cases, the non-compliance was corrected immediately during the inspection following the CRPC’s intervention.
The CRPC emphasises that the current objective of these inspections is not to assess whether individual traders are acting fairly or unfairly. While checking compliance with price indication requirements, the CRPC also verified whether the correct VAT rate had been applied to the relevant food product groups. In the cases identified, traders were informed of the applicable requirements and encouraged to rectify the shortcomings.
“The inspection results show that businesses have generally adapted successfully to the new regulation and are applying the reduced VAT rate correctly. Nevertheless, if consumers observe otherwise, we encourage them to report it to us,” emphasises CRPC Director Zaiga Liepiņa.
The CRPC reminds consumers to pay attention both to price labels displayed in stores and to purchase receipts, ensuring that the 12% VAT rate has been applied to bread, milk, poultry meat and eggs. The reduced VAT rate also applies to products sold as part of promotional campaigns, provided they belong to the specified product categories.
To promote the fair transfer of the VAT reduction to final consumer prices, the Ministry of Economics has launched the “Fair VAT Reducer” initiative. Traders wishing to demonstrate responsible business conduct and ensure that the benefits of the reduced VAT rate are fairly reflected in consumer prices are invited to join the initiative and apply for the “Fair VAT Reducer” certification mark.
By signing the declaration, a company confirms that it will ensure the fair transfer of the VAT rate reduction to final consumer prices and gains the right to use the initiative’s visual mark at its retail outlets.
More information on the reduced VAT rate for basic food products, its application, the price comparison calculator and participation in the “Fair VAT Reducer” initiative is available on the CRPC website. Consumers can also provide information to the CRPC by completing the dedicated reporting form.
The CRPC reminds consumers that, from 1 July 2026, the VAT rate in Latvia for certain frequently purchased food products – bread, milk, poultry meat and eggs – was reduced from 21% to 12%. The objective of the reduced rate is to mitigate the impact of rising food prices on consumers and to ensure that the benefits of the tax reduction are passed on to consumers as fully as possible through lower final prices.