As of July 1, 2026, the scope of European Union regulations regarding light commercial vehicles used in international freight transport and cabotage operations has been expanded.
These changes arise from the regulatory framework adopted under the EU Mobility Package, including Regulation (EC) No 561/2006 on driving times, breaks, and rest periods, and Regulation (EU) No 165/2014 on tachographs in road transport. While previously these requirements applied primarily to goods vehicles exceeding 3.5 tonnes, as of July 1, 2026, they also apply to vehicles used in international freight transport and cabotage whose maximum permissible mass, including any trailer or semi-trailer, exceeds 2.5 tonnes.
What Changes for Businesses?
The affected vehicles must now comply with EU requirements regarding driving time, breaks, and rest periods, as well as use a smart tachograph. Consequently, companies must ensure driver training, tachograph data management, and proper organization of working time.
At the same time, it should be noted that the regulations provide for certain exemptions. Therefore, each specific case must be evaluated not only by the vehicle’s mass but also by the type of transport and actual operational circumstances.
Posting of Drivers: Remuneration Requirements Are Not New
Requirements concerning the posting of drivers and related remuneration rules were not newly introduced on July 1, 2026—the specific EU regulation for the road transport sector has been applied since 2022. However, with the extension of these rules to 2.5–3.5 tonne commercial vehicles, this issue becomes particularly relevant for companies that previously operated lighter commercial vehicles.
It is crucial to correctly classify the type of transport operation the driver is performing. In cabotage operations, the driver is considered posted. Conversely, during bilateral transport from Latvia to another country and back, or in transit without loading or unloading, the driver is generally not considered posted. If a driver is posted during a specific period, the mandatory terms and conditions of employment applicable in the host Member State, including remuneration, must be evaluated.
Our Experience: It Is Essential to Clearly Distinguish Between Business Trips, Operational Work Travel, and Posting of Employees
Based on our practical experience in tax audits of transport sector companies, one of the most common errors is the incorrect classification of the employee’s actual employment situation. In practice, the concepts of “business trip” (komandējums), “operational work travel” (darba brauciens), and “posting of an employee” (darbinieka nosūtīšana) are often confused, even though they carry distinct requirements regarding remuneration, expense reimbursement, and tax application.
Incorrect classification can lead to direct tax consequences. In the case of a posted employee, both the remuneration rules of the host country and Latvian regulations on posted employee expense compensation must be considered. Meanwhile, a different compensation regime applies to operational work travel. Misclassifying these situations can result in additional assessments of wages and related taxes during a State Revenue Service (SRS/VID) audit.
Therefore, a company must be able to justify not only the working hours but also the actual transport performed and the applied remuneration regime. Tachograph data, CMR and other transport documents, working time records, posting declarations, and payroll calculations should all align seamlessly.
What Should Companies Do?
For companies using 2.5–3.5 tonne commercial vehicles in international transport, we recommend:
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Evaluating whether specific vehicles and operations fall within the scope of the new regulations;
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Ensuring that smart tachographs are utilized and working hours are accurately recorded;
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Reviewing the procedures for driver posting, business travel, and payroll calculation.
For Additional Information
The SRS (VID) has published informational material prepared by the European Labour Authority (ELA), outlining the key requirements regarding driving and rest times, tachograph usage, driver postings, and employer obligations (available on the SRS website under “New requirements for light commercial vehicles in international transport”).
How We Can Help
Tax consultants at SIA “Innovator” can help you evaluate employee tax issues, driver employment conditions, the application of business trip and posting rules, and working time compliance. We also help identify tax risks and represent your company during SRS (VID) audits.
A timely tax and legal assessment can help mitigate the risk of tax penalties and resolve non-compliance issues before an official audit occurs.
©INNOVATOR 04.09.2026.