To change the limit for turnover

In 2018, the tax rate of the microenterprises (NM) will be 15%, however, the tax reform will change the limit of annual turnover, established for payers of NM.

Today, the maximum annual turnover of a micro-enterprise is 100 000 euros, and from 1 January 2018 the turnover for the calendar year will not exceed 40 000 euros.

Part of the income exceeding the aforementioned amount as before will be subject to rate 20%.

In 2018 and 2019 NM for taxpayers whose turnover exceeds € 52,000, established a transitional period.

In 2018, the such payers of NM will not be subject to rate of 20% of the turnover exceeding the set limit is 40 000 euros per year if their turnover in 2017 or 2016 already exceeded 40 000 euros.

In 2019 this right can use the NM taxpayers whose turnover in 2018 or 2017 exceeded 40 000 euros.

It will be cheaper to go to the payment of the PNP in a General manner

The decrease in the maximum turnover should motivate payers of NM — limited liability — when reaching a certain turnover go to the payment of income tax (ANP) in a General manner.

It is necessary to add that the transition to payment of the PNP in a General manner from the next year provides even more favorable conditions: for example, the TNG will not be taxed retained earnings.

With the introduction of the envisaged reform changes will also be eliminated advance payments PNP.

You can work on only one micro-enterprise

It is also planned to change the order of employment of employees of micro-enterprises.

From 1 January 2018, the state revenue Service (SRS) would no longer register the employee of a micro-enterprise as an employee, if it will work on another micro-enterprise.

In respect of the employees of micro-enterprises working payer in NM on December 31, 2017, the restriction will apply from 1 January 2019.

SRS to 1 February 2018 will inform in the electronic Declaration System (EDS) payers of NM about employees who on 31 December 2017 has the other payer NM.

If the relevant employees of NM will work this way also in 2019, then in the calculation of NM to NM rate of 15% will be added another 2 percentage points for each of the worker and the payer NM, which from 2019 will hire the person that works the other payer NM, from 2020, will lose their status payer NM.

Will be simplified the procedure for collection of patent fee

Patent fee is a special mode of payment of income tax from the population (NPA) with a fixed amount (not changing depending on income) for different professions (photographer, massage therapist, bike master, etc.), which is different for Riga and other municipalities.

A relatively small tax was introduced in order to motivate those who are not employees, but would like to start a small business, provided that it obviates the need for relatively cumbersome bureaucracy.

Currently, patent fee, depending on the profession and the territorial division is from 43 to 100 Euro per month, however in 2018 the system of charging this tax will be simplified: depending on the territorial division will be charged 50 or 100 euros per month.

Patent fee, as before, will be made for 1, 3, 6 months or 1 calendar year in advance.

Patent fee is transferred to the budgets in the following proportions:

  • 67% in the special state social insurance budget