Latvia introduces the long debated amendments to the Micro-Enterprise tax law
Already back in 2015 it was defined that starting from 2017 the companies that are micro-enterprise tax payers would have to pay the minimal mandatory social insurance contribution (hereinafter – minimal contribution) for each of their employees. At the same time it was planned to decrease the current micro-enterprise tax rate from 9% down to 5%.
However, on 20 December 2016 Latvian parliament adopted new amendments effective as early as 1 January 2017 introducing quite the opposite. The following tax regime for the micro-enterprise tax payers was approved:
- no minimal social insurance contributions (this tax is included in the micro-enterprise tax);
- increase of micro-enterprise tax rate from 9% to 15% from the turnover for companies with the turnover between EUR 7 001 and EUR 100 000 per year;
- increase of micro-enterprise tax rate from 9% to 12% from the turnover for the smallest businesses with yearly turnover of up to EUR 7 000 (this reduced rate is valid only for year 2017).