Micro enterprise tax changes postponed to 2017

The Latvian parliamentary committee on budget and finances (taxes) on Tuesday upheld the draft amendments to the Law on Micro Enterprise Tax under which the tax rate for micro-enterprises with an annual turnover of up to €7,000 will be 5 percent starting with 2017, reported BNS.

The projected 5 percent micro enterprise tax will be charged on small businesses generating up to €7,000 in annual turnover, while micro enterprises with an annual turnover of €7,000-100,000 will have to pay a 5 percent tax for the first three years. Starting from the fourth year of operation, their tax rate will become 8 percent.

These changes would take effect in 2017, not in 2016 as was planned before.

Similarly, the committee put off to 2017 the effective date of the draft amendments to the Law on Social Security. The amendments would phase in minimum mandatory social security contributions for payers of the micro enterprise tax. This was also initially scheduled for 2016.

It has also been agreed with the Finance Ministry that the proposal to prohibit micro-enterprises from operating in certain sectors, starting with 2016, has also been put aside, and the plan is, by October 2016, to draft a new law to help with starting businesses, the parliamentary secretary of the Economics Ministry, Edgars Putra, said at the committee meeting.

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