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

Under the existing regulations, the 15% micro enterprise tax applies to the entities with annual turnover up to EUR 100,000 but a 20% tax is levied on micro enterprises when their annual turnover exceeds EUR 100,000.

But taxation of micro enterprises has been changed as part of the tax reform that will take effect next year, therefore the regulations had to be amended so that, starting with 2018, micro enterprises with annual turnover below EUR 40,000 will be taxed at 15% and the 20% tax will be applied to the turnover in excess of EUR 40,000.

In addition, the tax rate will be increased by two percentage points for each employee in case the micro enterprise had employed more than five people in any quarter or there are people among its employees, who work for more than one micro enterprise.