Amendments made to the Micro-company Tax law in Latvia (part 2)

On September 2016 new amendments were proposed to the Micro-enterprise Tax law in Latvia (Micro-company tax law). It has to be noted that these amendments still have to be accepted by the Parliament of the Republic of Latvia.

Micro-company Tax for start-up companies in Latvia

These amendments are intended to regulate the start-up companies and small enterprises. Amendments determine that for the start-up companies the tax burden will be eased for the first three years from the beginning of operation. For the first two years of the operation the company would have to pay tax in the amount of 75% of the minimal state social insurance payments (state social tax) and 3% from the turnover. But in the third year the company would have to pay tax in the amount of 100% of the minimal state social insurance payments and 3% from the turnover.

Micro-company Tax for companies with a small turnover in Latvia

These amendments also intend to introduce a fee of EUR 150 in a month without limiting the activity fields for the companies that have a turnover not higher than EUR 12 000. In addition, the company has to have defined condition that the turnover may not exceed EUR 24 000. This type of the system would be appropriate for companies that employ not more than three people.

Micro-company Tax for high-technology companies in Latvia

For high-technology companies they have introduced the possibility of making a fixed monthly payment of EUR 252 of state social insurance for each employee. At the same time the company would not have to pay the personal income tax or the corporate income tax. This system could be suitable for companies that produce, develop and sell innovative goods or services with a high technological value for the next five years.

All these amendments are intended on easing the tax burden for the new small enterprises in Latvia by introducing different types of payment systems that can be adapted for your company. Amendments still have to be supplemented and accepted by the Parliament of the republic of Latvia.

Should you have any questions about amendments made to the Micro-company Tax law in Latvia, please do not hesitate to contact our English speaking lawyers info@gencs.eu.

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