8.04.2015. Latvia Retains Startup Company Tax Incentive


The Latvian Parliament, the Saeima, has voted to retain the small business tax relief, and agreed to review the conditions shortly.

The relief applies to companies with up to five employees, and with an annual turnover of up to EUR100,000 (USD109,000). The rate of corporation tax for these companies is nine percent during the first three years of their operations, on the condition that the company is compliant with its social security obligations.

In 2013, the Saeima voted for a phasing out of this relief over the years 2014 to 2017, to instead install a 15 percent rate. While lawmakers are still considering whether to proceed with the tax hike, the proposal is now proving controversial.

The relief will be further debated in future sessions and may be retained or amended to apply only to certain industry sectors.