Micro-Enterprise tax in Latvia

Micro-enterprise tax in Latvia

To stimulate development to small and medium sized enterprises in Latvia, government of Latvia accepted law on "Micro-Enterprise Tax".  

 Micro – enterprise tax is for different forms of merchants – individual merchants, farms, other natural persons that are registered as performers of economic activities, or limited liability companies that have chosen to accept the micro – enterprise status and who, under the law, may make only one tax payment.

 The law allows small businesses to pay flat-rate tax of 9% on their turnover. The tax shall be paid four times a year on the turnover of each quarter

 The flat-rate tax of 9% includes the following tax payments: 

- social insurance mandatory contributions,

- personal income tax;

- entrepreneur risk state fee for employees;

- enterprise or corporate income tax if the micro-enterprise conforms to the features of enterprise income tax payer and

- personal income tax of owner of the micro-enterprise for earnings of micro-enterprise economic activity.

More you can read on our website: www.visas.lv

Introducing EUR in Latvia

Government of Latvia on year 2013 plan to make campaign on promoting good will of euro. It is because there are plans that starting from 2014 Latvia plan to introduce euro as main currency in Latvia.
For example - introducing euros instead of Latvian Lats poeple think that there can bes lost Latvian identity. But it does not mean so because there will national folk daugther's symbol, on two euro coin there will be first line of anthem of Latvian. We can also see that other European Union countries which introduced euro such as Germany, France, Italy, Estonia and even smallest Vatikan has not lost their identity by using euro instead of crones and franks etc.
Important thing is that since euro will introduced, there will not be fear of devaluation of Latvian Lats. It is also as safatey guarantee for foreign investors, who sometime are not sure about this risk. But since there will be euro in Latvia also foreign investors will be more sure about investment stability.

Social security rate in Latvia cut for 2014; income tax to remain at 24%

Saeima of Latvia, reading the amendments to several laws the final time, voted for retaining personal income tax in 2014 at the current rate, instead – bringing down social security obligatory contributions, and increasing tax breaks for those with dependants, also, increasing the non-taxable minimum.

For employees, the social payment rate will be decreased from 11% to 10.5%, for employers – from 24.09% to 23.59%.

The personal income tax rate next year will hold steady at 24% and be slashed to 22% in 2016.

Tax breaks for each dependant will be boosted from 80 to 116 lats next year (165 euro), while the non-taxable minimum will be raised from 45 to 53 lats (75 euro).

Latvia is recognized as the best country for business in The Baltic states

Latvia is recognized as the best country for business in The Baltic states

Bloomberg has put Latvia in 36th place in the list of the best countries where to make business and it is 8 places lower than year before. And it is still better than to neighbours - Lithuania and Estonia.

All countries are evaluated by 6 factors:
- integration level of economics;
- business start-up expenses;
- expenses of labour and materials;
- transportation expenses of goods;
- less touchable expenses;
- readiness of consumers.
For each factor there there is evaluating for 0 to 100%.

Total result of Latvia is 63,5%. The best evaluating to Latvia is for factor - business start-up expenses - 74,7%, but the smallest one is for less touchable expenses - 53,9%. Integration level of economics evaluating is 60,6%, expenses of labour and materials - 61,5% and readiness of consumers -61,7% and transportation expenses of goods - 66,3%.

Lithuania is put in place 37 with total result - 63,1%, and Estonia is put in place 43, with totalresult 62,2%. Previous year Lithuania was in place 40 and Estonia in place 34.
There are collected data of 50 countries in the world in Bloomberg reiting and the highest result was given to Hong Kong - 79,6%.

The top ten countries are - USA, Japan, The Netherlands, Germany, Australia, Canada, Singapore, Denmark and United Kingdom.

So if you are interested to start business in Latvia, read more on company formation.

CIT will not applied in Latvia in some cases !

Optimize taxes in Latvia from 2013

Starting from 2013, CIT will not be applied to non-residents’ paid and received dividends. This regulation will not apply to dividends that are paid to low-tax or non-tax state residents. There will also be a central CIT regime on income and losses from sales of shares, except sales of tax or non-tax state shares.

These are good new for businessmen who plan to invest in Europe and have not decided where to invest. If you see that with forming company and registering company in Latvia you can save on taxes, please visit our website in section on company formation and company registration.

Latvia pays back remaining 500 million Lats to International Monetary Fund (IMF)

Latvia pays back a loan to International Monetary Fund (IMF)

Using a successful emission of bonds on international financial markets with an all-tie lowest interest rate Latvia makes next step and pays back the loan to IMF before schedule. This is an important event for Latvia’s economy in general and foreign investors. As a result of this transaction, Latvia will save several million LVL, which will not be used in interest payments, but instead will be invested in the development of our country.

The payment of the IMF loan will be performed using the resources gained from the December 5 bond issue. As it is known, Latvia issued bonds worth $1.25 billion with a fixed interest rate of 2.750% annually.

Latvia received a loan from IMF worth 820.2 million LVL as part of the international loan program.

In accordance with the loan repayment schedule, Latvia began repaying the general amount in March 2012. By September 14, Latvia had paid back 149 million LVL.

It should be added that the international loan program lasted for three years and secured 7.5 billion EUR for Latvia. Latvia used a bit more than half of this amount – 4.5 billion LVL.

Visas to Latvia, Schengen

Visa Facilitation Agreements

Citizens of countries which have signed visa facilitation agreements with the EU can have their short-stay visa applications simplified. This applies to citizens of:
- Russia
- Ukraine
- Georgia
- Republic of Moldova

This also applies to citizens of the following countries if they do not hold a biometric passport*:
- Former Yugoslav Republic of Macedonia
- Serbia
- Bosnia and Herzegovina
- Albania

* Biometric passports and travel documents are integrated with identifiers that establish a reliable link between the genuine holder and the document. These identifiers consist of a facial image and fingerprints. The integration of biometrics in passports and travel documents helps to improve document security and to prevent falsification of documents

Citizens from these countries holding a biometric passport do not need a visa.

More information about immigration you can read in section on Immigration.