Financial Services, Latvia, Legislation, Markets and Companies, Taxation

It is said that the draft bill will be significantly improved before review in the second reading. Saeima will review the legislation in the first reading next week, and proposals altering the bill will be accepted during three weeks after that.

Discussions will also focus on social protection of employees at microenterprises. The Budget and Finance Committee and Social and Employment Matters Committee will hold a joint meeting in February to discuss the matter. The issue of social security at microenterprises was also discussed in the past, and implementation of general obligatory social insurance contributions was mentioned as one of the possible solutions.

According to the Finance Ministry's calculations, keeping the microenterprise tax rate at 9% will cost EUR 7 million for the state budget this year. Meanwhile, the Economy Ministry believes that the said tax rate will have no impact on the state budget. Thus, the Committee will request an opinion from the government, urging it to overcome any disagreements between the two ministries. Considering the impact on the budget, compensation mechanisms will also be considered.

As reported, in 2015, the tax rate for microenterprises with annual turnover under EUR 7,000 will remain 9%. The tax rate for microenterprises with higher turnover has increased to 11% this year, it will further increase to 13% in 2016 and 15% in 2017.