Regulations Regarding the Micro-enterprise Tax Declaration and the Procedures for Filling in Thereof

Issued pursuant to
Section 7, Paragraph four of
the Micro-enterprise Tax Law

1. This Regulation prescribes the sample form of the micro-enterprise tax declaration (hereinafter - the declaration) (Annex) and the procedures for filling in thereof.

2. A micro-enterprise taxpayer (hereinafter - the taxpayer) shall indicate the following indicators of the micro-enterprise in the declaration regarding each quarter:

2.1. the turnover (revenue);

2.2. employees and income of employees according to months.

3. The taxpayer who complies with the criteria laid down in Section 1, Clause 1 and Section 2, Paragraph four of the Micro-enterprise Tax Law shall fill in Rows 1, 2, 3, 4, 5, 7, 8, 15 and 16 of the declaration.

4. The taxpayer who has been registered as a person taxable with value added tax shall not include the share of value added tax in the turnover of the quarter.

5. The calculated tax sums shall be indicated in the declaration in euros and cents.

6. The quarter, regarding which the declaration is submitted, shall be indicated in Row 4 of the declaration.

7. In Row 5 of the declaration the taxpayer shall indicate the quarterly turnover of the micro-enterprise, which since the beginning of the year does not exceed the criterion laid down in Section 1, Clause 1, Sub-clause "b" of the Micro-enterprise Tax Law (hereinafter - the turnover criterion) - 100 000 euros, or the quarterly turnover, if the sum total of the turnover exceeds 100 000 euros and the taxpayer is applying Section 6, Paragraph 3.¹ of the Micro-enterprise Tax Law.

8. The taxpayer who has retained the status of the micro-enterprise taxpayer in the taxation year without justification shall not indicate the turnover in Row 5 of the declaration.

9. The profit share of a partnership shall not be indicated in Row 5 of the declaration.

10. If Section 6, Paragraph 3.¹ of the Micro-enterprise Tax Law is applied, the taxpayer shall make a respective note in the optional field.

11. In Row 6 of the declaration the taxpayer shall indicate the part of the quarterly turnover, which exceeds the turnover criterion - 100 000 euros - since the beginning of the calendar year, if Section 6, Paragraph 3.¹ of the Micro-enterprise Tax Law is not being applied, or the quarterly turnover, if the taxpayer has retained the status of the micro-enterprise taxpayer in the taxation year without justification, as well as the profit share received from a partnership:

11.1. if the turnover of the micro-enterprise has exceeded the turnover criterion in any of the first three quarters, the difference between the turnover of the taxpayer since the beginning of the year and 100 000 euros shall be indicated in the declaration of such quarter, in which the turnover since the beginning of the year has exceeded the turnover criterion, but in declarations of subsequent quarters the turnover of the respective quarter shall be indicated in this Row;

11.2. if the micro-enterprise has applied Section 6, Paragraph 3.¹ of the Micro-enterprise Tax Law in any of the previous quarters of the taxation year, but the restriction specified in the abovementioned norm has been exceeded in the quarter, regarding which the declaration is being submitted, and the turnover since the beginning of the year has exceeded the restriction specified for turnover in the law, the turnover of the respective quarter shall be indicated in this Row of the quarterly declaration and declarations of subsequent quarter of the taxation year;

11.3. if the turnover is indicated in Row 6 of the declaration because the status of the micro-enterprise taxpayer has been retained in the taxation year without justification, as well as the profit share of a partnership applicable to the micro-enterprise is indicated, the taxpayer shall make a respective note in the optional field.

12. If the taxpayer commences economic activity after the beginning of the calendar year, the turnover criterion of the micro-enterprise for the year of commencement of economic activity shall be calculated by determining the turnover criterion for a month (100 000 euros divided by 12) and multiplying it by the number of months until the end of the calendar year, in which the micro-enterprise is going to be the taxpayer (beginning with the month in which the micro-enterprise was registered).

13. In Row 7 of the declaration employees (also absent) of the micro-enterprise, including owners of the micro-enterprise (hereinafter - employee), and income of each employee in each month of the quarter shall be indicated. The given name and surname shall be indicated for a non-resident employee, but in the box "Personal identity number or registration code" - the personal identity number or a registration number assigned by the State Revenue Service. In boxes "Monthly income" of Row 7 of the declaration income of each month of the respective quarter shall be indicated (income of January, February and March shall be indicated in the 1^st quarter, income of April, May and June - in the 2^nd quarter, income of July, August and September - in the 3^rd quarter, and income of October, November and December - in the 4^th quarter):

13.1. regarding the owner of the micro-enterprise for whom the employment relations are not recorded in an employment contract in the micro-enterprise - the resources withdrawn from the micro-enterprise in each month of the respective quarter for personal consumption and other income obtained from the micro-enterprise in cash or in items and in the form of services, except dividends;

13.2. regarding the employee - the work remuneration calculated in each month of the respective quarter and other income obtained from the micro-enterprise.

14. The payment for leave or sickness benefit calculated for the employee shall be indicated in the reporting month, for which it is calculated.

15. If the employee does not obtain income from the micro-enterprise in any of the reporting months, the number "0" shall be indicated in the box 7 "Monthly income" of Row 7 of the declaration in the respective month of the quarter.

16. If the micro-enterprise compensates business trip or official journey expenses to the employee in any of the reporting months and the compensation conforms to the laws and regulations regarding the procedures for reimbursement of expenses related to business trips, such compensation shall not be indicated as income obtained by the person from the micro-enterprise in the box 7 "Monthly income" of Row 7 of the declaration.

17. The micro-enterprise tax in Row 8 of the declaration shall be calculated, multiplying the quarterly turnover of the micro-enterprise indicated in Row 5 of the declaration by the micro-enterprise tax rate in the amount of nine per cent.

18. The micro-enterprise tax in Row 9 of the declaration shall be calculated, multiplying the quarterly turnover of the micro-enterprise indicated in Row 6 of the declaration and the profit share of a partnership attributable to the micro-enterprise by the micro-enterprise tax rate in the amount of 20 per cent.

19. In Row 10 of the declaration the sum total of the share of income of all months of the quarter of all employees, which exceeds 720 euros, shall be indicated. It shall be calculated for each employee individually in each month of the quarter, subtracting 720 euros from the income of the employee, summing up the share of exceedance of the income and summing up all shares of exceedance of the monthly income of employees. Upon determining the value to be indicated in Row 10 of the declaration, such month of the quarter shall not be taken into account, in which the income of the employee has been 720 euros or less.

20. In Row 12 of the declaration the number, by which the number of five employees in a quarter has been exceeded, shall be indicated. Exceedance of the number of employees in Row 12 need not be indicated, if Section 6, Paragraph 2.¹ of the Micro-enterprise Tax Law is being applied:

20.1. the number of employees shall include employees, which have worked not less than half of the respective quarter in the micro-enterprise. The number of employees shall not include the employees who are absent or are suspended from work;

20.2. if Section 6, Paragraph 2.¹ of the Micro-enterprise Tax Law is applied, in Row 12 a note shall be made in the respective selection field, confirming that the rights laid down in the abovementioned Paragraph of the Section of the Law are being exercised;

20.3. if there are no more than five employees in a quarter in the micro-enterprise, Rows 12, 13 and 14 of the declaration shall not be filled in. If Section 6, Paragraph 2.¹ of the Micro-enterprise Tax Law is applied, Rows 13 and 14 of the declaration shall not be filled in;

20.4. if the micro-enterprise has applied Section 6, Paragraph 2.¹ of the Micro-enterprise Tax Law in any of the previous quarters of the taxation year, but in the quarter, regarding which the declaration is being submitted, the number of employees has exceeded the restrictions specified in the respective norm of the law, Rows 12, 13 and 14 of the declaration shall be filled in, however, a note that the rights laid down in Section 6, Paragraph 2.¹ of the Micro-enterprise Tax Law are being exercised shall not be made in the respective selection field of Row 12.

21. In Row 13 of the declaration the additionally applicable rate of the micro-enterprise tax shall be indicated, if more than five employees work in the micro-enterprise in a quarter. The micro-enterprise tax shall be calculated, multiplying the exceedance of the number of employees indicated in Row 12 of the declaration by the additional micro-enterprise tax rate in the amount of two per cent.

22. If more than five employees work in the micro-enterprise in a quarter, in Row 14 the micro-enterprise tax shall be calculated for the share of exceedance of the number of employees, multiplying the tax rate indicated in Row 13 of the declaration by the sum total indicated in Rows 5 and 6 of the declaration.

23. In Row 15 of the declaration the micro-enterprise tax for the respective quarter of the taxation period shall be indicated, which shall be calculated by summing up that indicated in Rows 8, 9, 11 and 14 of the declaration.

24. In Row 16 of the declaration the micro-enterprise tax calculated in Row 15 of the declaration for the respective quarter of the taxation period shall be indicated. Upon filling in the declaration of the 4^th quarter, in Row 16 the micro-enterprise tax in the amount of 50 euros shall be indicated, if the micro-enterprise did not have turnover in the taxation period (calendar year). If the sum total of the micro-enterprise tax indicated in Row 15 of the declaration of the 4^th quarter and declarations of the 1^st, 2^nd and 3^rd quarters of the taxation period (calendar year) is less than 50 euros, upon filling in the declaration of the 4^th quarter, the micro-enterprise tax, which is calculated by deducting the sum of the micro-enterprise tax indicated in Row 15 of declarations of the 1^st, 2^nd and 3^rd quarters from 50 euros, shall be indicated in Row 16.

25. The veracity of the information provided in the micro-enterprise tax declaration shall be confirmed by a signature by the responsible person, indicating his or her given name, surname and the date of signing the declaration.

26. Cabinet Regulation No. 819 of 31 August 2010, Regulations Regarding the Micro-enterprise Tax Declaration and the Procedures for Filling in Thereof (Latvijas Vēstnesis, 2010, No. 149; 2011, No. 182, 2013, No. 183), is repealed.

Prime Minister Laimdota Straujuma

Acting for the Minister for Finance -
Minister for Agriculture Jānis Dūklavs

Annex
Cabinet Regulation No. 190
8 April 2014

Micro-enterprise Tax Declaration

Responsible person

Notes.

1. * Paragraph 2 of Transitional Provisions of the Micro-enterprise Tax Law.

2. The details of the document "date" and "signature" shall not be completed, if the electronic document has been prepared in accordance with the laws and regulations regarding drawing up of electronic documents.

Acting for the Minister for Finance -
Minister for Agriculture Jānis Dūklavs

Translation © 2015 Valsts valodas centrs (State Language Centre)