Changes in tax regulations for micro-enterprises

 Published: 07.02.2019. 14.43

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The State Revenue Service (SRS) reminds micro-enterprise taxpayers of a number of changes in regulations, resulting from tax reforms.

In order to maintain micro-enterprise taxpayer (MET) status, employees can be registered as employees of only one micro-enterprise. If, however, the employee of one micro-enterprise is also employed by other micro-enterprises then the MET will be required to pay an additional 2% (on top of 15%) for each such employee.

Please note that as of 2020, METs in this situation will lose their micro-enterprise status and will have to seek alternative tax payment status.

Micro-enterprise owners can check the status of their employees simply by asking them or by checking the database on the SRS website: Mikrouzņēmumu nodokļa maksātāji.

In order to inform METs about the employment status of their employees, SRS sent a notification to all METs on 6 February 2018 through EDS. In addition, in 2018, SRS no longer registered individuals as employees of a specific micro-enterprise if records indicated that they were already registered elsewhere.

Just a reminder that the maximum annual turnover for a MET is 40 000 EUR. In addition, taxpayers whose annual turnover for 2018 or 2019 is greater than 40 000 but under 52 000 EUR are subject to specific transition regulations: if a MET had a turnover greater than 40 000 EUR 2016 or 2017, it is not required to pay the 20% rate for amounts over 40 000 EUR in 2018 and 2019.

More information about the changes in MET policies can be found (in Latvian) on the SRS website and SRS information. You can also call the SRS help line at 67120000 (press 1), visit any SRS client service centre, or write us.