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Wednesday 26.07.2017 | Name days: Ance, Anna, Annija
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Expert: it is hard to tell small companies how they should work from now on

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUBecause it is not entirely clear how the country’s tax regulations could change in the future, it is very hard to provide any recommendations to small companies in relation to their future, said KPMG senior auditor Gunta Kaulina in an interview to Latvijas Radio.

She reminded that there are different tax regimes – it is possible to register as a self-employed person, found a standard company or a micro-enterprise. «It is more important to make decisions from the perspective that the micro-enterprise tax regime has a question mark. We have no idea how things could change next year, because the law has been returned to the Saeima and all kinds of opinions have been voiced in regards to the turnover size and the remainder of social benefits and even the continued existence of this tax regime in the next two years,» – said the expert.

«It is hard for me to say and recommend anything [to small entrepreneurs]. Why? Because legislation is not all that clear. If legislation was clearer, we would be able to assess the situation and decide if it’s beneficial to make one or the other decision. Unfortunately, we don’t know how the tax regime could change next year, we are unable to recommend anything worthwhile at this time,» – said the tax expert.

According to her, an optimal solution would be simplifying the tax regime for small taxpayers. «The regime that was in place before was very simple and convenient. But at the same time the social security benefit from it was not enough for people employed in micro-enterprises. Because of that this matter needed to be resolved by raising the rate from turnover or by securing other methods for social fees. It is not normal when social fees for a person working in a company for a long time are paid at an amount of EUR 112, which does not provide sufficient guarantees – no pension, no sick leave and no child care leave. Nothing at all. If a person needs social guarantees, it is necessary to make sure all others who pay normal social tax amount cover social protection for that person,» – the expert said.

As previously reported, President of Latvia Raimonds Vejonis used his right and returned amendments to the Micro-enterprise Tax back to the Saeima for a repeated viewing. Those amendments provided the liquidation of the micro-enterprise tax regime in 2019.

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