Micro-enterprise tax solutions in Latvia
Latvia’s micro‑enterprise tax regime streamlines tax obligations for small businesses by replacing multiple taxes with one simplified, flat-rate tax on gross turnover. This solution is designed to reduce the administrative burden for eligible entrepreneurs.
Our solutions
Our services cover every essential aspect of micro‑enterprise tax compliance with a strong focus on consulting and accountancy. Below are six key solutions we offer:
Comprehensive tax consulting
Receive expert advice tailored to your unique micro‑enterprise tax situation. Our specialists help you understand your obligations, plan ahead, and address any compliance challenges effectively.
Professional accountancy and record-keeping
Benefit from professional support in maintaining accurate financial records, ensuring that all income and expenses are properly documented to meet tax compliance requirements.
Strategic tax optimization
Engage with our advisory services to review your financial practices and identify strategies to optimize your tax position while staying fully compliant with micro‑enterprise regulations.
Filing guidance and compliance management
Get personalized assistance with preparing and submitting your tax declarations on time. Our team helps simplify the filing process and ensures that deadlines are met consistently to avoid penalties.
Micro‑enterprise tax in Latvia
The key aspects of the regime are summarized as follows:
- Unified Tax: A flat rate of 25% on gross turnover covers the owner’s social insurance and income tax obligations.
- Scope: Applicable to individual entrepreneurs and legacy limited companies (SIAs) with only natural person shareholders.
- Purpose: Encourages formal economic activity with lower compliance requirements.
Become a micro‑enterprise taxpayer
To qualify and register for micro‑enterprise tax status, you should know the following details:
Who can apply:
Individual entrepreneurs or sole traders.
Pre‑existing SIAs that already have micro‑enterprise status.
Key criteria:
Annual turnover must not exceed €40,000.
The number of employees should not exceed 5.
Application:
Submit your application to the State Revenue Service (VID) when registering your business or by the designated deadline if switching from another tax regime.
Calculation of the micro‑enterprise tax
The calculation process is straightforward and based on these fundamental points:
- Tax Base: Calculated on gross turnover with no deductions for expenses.
- Rate: A uniform rate of 25% applies.
- Social Contributions: Minimum contributions apply if earnings fall below the monthly minimum wage (approximately €740).
Consequences of failing to comply with the limitations
If compliance requirements are not met, the following outcomes may occur:
- Status Loss: Exceeding the €40,000 turnover or 5‑employee limit results in losing micro‑enterprise status in the following period.
- Transition: When status is lost, the business must shift to the standard tax regime, including VAT registration if required.
- Penalties: Late filings and payments incur standard fines and interest.
Filing and payment procedures
The filing and payment schedule is designed to be simple and consistent, with these key points:
- Quarterly Declarations: File tax declarations for each quarter by the 15th day of the month following the quarter.
- Payment Deadlines: Tax payments are due by the 23rd day of the month after each quarter.
- Electronic Filing: Use the VID Electronic Declaration System (EDS) for seamless submissions and automated calculations.
Reasons to choose our compliance solutions
Our approach is built on personalized support and professional expertise. Here’s why our services stand out:
- Personalized Expertise: Tailored consulting and accountancy support for your unique tax challenges.
- Accurate Record-Keeping: Clear guidance to maintain compliant financial records.
- Timely Filing Assistance: Expert help to ensure all tax declarations are submitted on time.
- Proactive Regulatory Guidance: Up‑to‑date advice on tax law changes and compliance requirements.
- Strategic Tax Optimization: Focused recommendations to improve your overall tax position.
- Capacity Building: Practical training and advisory sessions to boost your tax management skills.
Get in touch
For personalized consulting and professional support that keeps your micro‑enterprise compliant and strategically optimized, contact us today. We’re here to help you navigate the complexities of micro‑enterprise tax with ease.