Mi­cro-en­ter­prise tax pay­ers in Latvia can ex­pect mul­ti­ple leg­isla­tive changes

Baltic News Network - - News -

Lat­vian State Rev­enue Ser­vice re­minds that 2019 marks the com­ing into force of mul­ti­ple reg­u­la­tions in re­la­tion to mi­cro-en­ter­prise tax pay­ers as part of pre­vi­ously im­ple­mented re­forms.

In or­der for com­pa­nies to re­tain their mi­cro-en­ter­prise tax payer sta­tus, em­ploy­ees of such com­pa­nies will only be al­lowed to work in one mi­cro-en­ter­prise at a time.

How­ever, if an em­ployee is em­ployed in other mi­cro-en­ter­prises, those com­pa­nies will have to add two per­cent­age points to their ex­ist­ing 15% mi­cro-tax rate for ev­ery such em­ployee.

As of 2020, such com­pa­nies will lose their mi­cro-en­ter­prise tax­payer sta­tus and will have to pick a dif­fer­ent tax regime. Em­ploy­ers can find out if their em­ployee is em­ployed in an­other com­pany by ask­ing them di­rectly. It is pos­si­ble to use SRS web­site to check whether or not the other em­ployer of the em­ployee in ques­tion is a mi­cro-en­ter­prise tax payer.

To keep mi­cro-en­ter­prise own­ers in­formed of their em­ploy­ees’ other jobs, SRS sent a no­ti­fi­ca­tion re­gard­ing that to mi­cro-en­ter­prise own­ers on 6 Fe­bru­ary 2018 via EDS. Last year, SRS no longer reg­is­tered mi­cro-en­ter­prise work­ers em­ployed in other mi­cro-en­ter­prises.

It is also worth men­tion­ing that the max­i­mum an­nual turnover is not al­lowed to ex­ceed EUR 40,000. For tax­pay­ers whose turnover ex­ceeds EUR 40,000 in 2018 and 2019 but does not ex­ceed EUR 52,000 the law pro­vides tran­si­tion re­quire­ments.

In those two years, such mi­cro-en­ter­prise tax pay­ers are al­lowed to not ap­ply 20% tax rate for turnover above EUR 40,000 if their turnover in 2017 or 2016 had ex­ceeded EUR 40,000.

More de­tailed in­for­ma­tion re­gard­ing changes to the ap­pli­ca­tion of mi­cro-en­ter­prise tax regime is avail­able on SRS web­site.

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