According to the 1961 Vienna Convention, Article 34, a diplomatic agent shall be exempt from all duties and taxes normally incorporated in the price of goods and services e.g. VAT. Based on reciprocity, reimbursement of VAT, which at present in Latvia amounts to 21 per cent of the retail price, is granted to missions and their diplomatic staff and their accompanying family members according to the provisions laid down in the Regulation of the Cabinet of Ministers No 908 (18.12.2012.) „Procedures for the Application of Zero Rate of Value Added Tax to the Supply of Goods and Services Provided to Diplomatic and Consular Missions, International Organisations, European Union Institutions and the North Atlantic Treaty Organisation (NATO), and Procedures for the Reimbursement of Excise Duty for Excisable Goods Purchased in the Republic of Latvia” passed in accordance with the Law „On Value Added Tax”, Section 50, Paragraph eight and Section 20, Paragraph two, Clause 1 Sub-clause “b”, and the Law On Excise Duties, Paragraph four.
The reimbursement of VAT is thus done by courtesy and on reciprocal basis provided the goods are for use by:
- diplomatic and consular missions in the Republic of Latvia, their diplomatic and consular agents, as well as to the family members of the persons referred for personal use. Staff members other than diplomatic agents are not entitled to the exemption. The administrative and technical staff of missions may import their removal goods exempt from VAT when they settle down in Latvia for the first time;
- offices of international organizations, and their employees who in the territory of the Republic of Latvia enjoy diplomatic status.