Micro Enterprise tax

Micro-enterprise tax

Micro-enterprise Tax - on 9 August 2010 Saeima of the Republic of Latvia has been accepted "Law on micro-tax." The new tax took effect from 01 September 2010.
Company formation and registration as a new business at the same time have the opportunity to apply for the micro-enterprise tax payer.

An undertaking to this tax purposes would be considered micro must meet the following criteria:
- Company members must be individuals who have the company's board;
- Turnover during the year can not exceed 70 000 lats;
- Number of employees at the same time is not more than 5 employees.

The micro-enterprises are considered to be both a sole proprietorship and farms, and limited liability companies. In case a company deploys a successful year and its turnover exceeds the amount of 70 000 LVL, there is an additional 20% tax rate part that has exceeded the maximum. For example, if the company's turnover was 100 000 Ls, the excess part of the example is 30 000 is suitable for the 20% tax rate.

A company that wants to be micro-enterprise taxpayer may employ up to 5 employees, each of which can cost up to 500 LVL / month large salary for paying any additional taxes and / or social contributions. In the event an employee's salary is higher than 500 LVL / month applies to an extra 20% tax rate on the wage share, which is over 500 LVL. For example, if the salary is 600 LVL, then an additional 20% rate is applied to LVL 100 or the amount of the excess over the maximum salary. If a situation arises where a micro-business while employing more than 5 persons, the turnover tax is further increased by another 2%. For example, if the company employs 6 people, then mikoruzņēmuma tax will be 11% (9% + 2%). Micro-enterprises tax payment companies should do on a quarterly basis following the previous quarter's sales.
More information can be found in Accounting services.