I am a Micro-Enterprise Taxpayer

 Published: 30.12.2020. 13.47


On December 11, significant changes to the Micro-Enterprise Tax Law were adopted, which will affect Micro-Enterprise Taxpayers (MET) as of 2021.

To allow entrepreneurs to become acquainted with the changes and decide on future activities, SRS has extended the deadline by when a MET must notify the SRS whether it will to continue operate as a MET in 2021, or not.

You can apply to discontinue your MET status until 15 January 2021 by submitting an application through EDS.

Owners of micro-enterprises may hire employees and must pay salary taxes as required (PIT and SSIMC). When hiring an employee, a micro-enterprise becomes an employer.

  • What are the micro-enterprise tax rates?
      • annual turnover under EUR 25 000 - 25%
      • annual turnover over EUR 25 000 - 40%


      If the MET was registered in the 2nd quarter or later of 2020, the turnover rate of 25% will be reduced proportionally in 2021:

      • registered in the 2nd quarter: under EUR 18 750 - 25%; over EUR 18 750 - 40%
      • registered in the 3rd quarter: under EUR 12 500 - 25%, over EUR 12 500 - 40%
      • registered in the 4th quarter: under EUR 6250 - 25%, over EUR 6250 - 40%
  • What is the procedure for employing people in a micro-enterprise?
    • As of 1 January 2021, only the owner of a micro-enterprise may use the MET payment regime - it cannot be applied to employees’ salaries.

      Persons who are registered as employees of a MET at the end of 2020 may continue to work in this status until 30 June 2021. After 1 July 2021, all employee income is subject to labour taxes, i.e., PIT and SSIMC.

      After 1 July 2021, all employee income is subject to labour taxes, i.e., PIT and SSIMC as follows:

      • PIT 20%-23% on monthly income under EUR 1667
      • PIT 23% on monthly income exceeding EUR 1667
      • SSIMC 34.09% in the general case (23.49% - employer share, 10.50% - employee share);
         

      There will also be a state fee for business risk – EUR 0.36 per month.

      ! Please note - If you hire an employee after 1 January 2021, PIT and SSIMC must be paid immediately.

  • What is the maximum turnover for METs?
    • As of 1 January 2021, turnover restrictions will change for METs.

      If a MET becomes or is required to become a registered VAT payer in accordance with the Value Added Tax Law, it loses its MET status in the next taxation year.

      Information on registration in the VAT register is available here.

  • How do I declare and make MET payments?
    • METs pay tax four times a year for turnover in each quarter.

      A MET must submit a quarterly micro-enterprise tax return by the fifteenth day of the month following the quarter, indicating the quarterly turnover by months and the calculated tax.

      The quarterly MET tax return must be submitted for the reporting quarter in which the MET has had turnover (even if turnover occurred only in one or two months of the reporting quarter).

      The MET must pay the MET tax to the State by the 23rd day of the month following the quarter.

  • What are the restrictions for METs?
    • A VAT payer may not become a MET.

      If a MET becomes or is required to become a registered VAT payer in accordance with the Value Added Tax Law, it loses its MET status in the next taxation year.