The new amendments in Latvia regarding micro company tax

Starting from 13th May 2015 new amendments in micro company tax are in force.

The previous regulation of micro company tax

Till the amendments the following rates of micro company tax were applicable If:

• turnover is not exceeding 7000 EUR – 9%
• If turnover was between 7001 EUR – 100 000 EUR – 11%

The new amendments of micro company tax

The new amendments of micro company tax

In line with the new amendments:

• If turnover of the company is not exceeding 7000 EUR, then applicable rate is 9%.
• For companies with turnover between 7000.01 EUR and 100 000 EUR, applicable micro tax rate for first, second and third year is 9%,

Further on in fourth year of micro company’s existence the applicable rate would be 12%.

Moreover we would like to inform you that starting from 1st January of 2016, it is proposed to increase the micro company tax rate up to 13%. Nevertheless, we rise your attention that there still might be changes of micro company tax rate for the next years.

The requirements of micro company in Latvia

In addition we would like to remind of the requirements which should be met in order to register micro company in Latvia: 

• Establisher/shareholder is a natural person (max 5). 
• The same person (s) in board. 
• The person can own only one such micro company 
• Share capital of the company shall be less than 2800 EUR, namely, from 1-2800 EUR.

In order to become a micro-enterprise tax payer the following main conditions must be fulfilled:

• a turnover not exceeding 100 000 EUR in calendar year;
• number of employees - up to 5;
• a salary per employee not exceeding 720 EUR a month.

If you like to receive our assistance regarding taxation in Latvia, Litthuania and Estonia, please contact our tax consultants at info@gencs.eu