Amendments in Taxation Policies for 2025: What Self-Employed and Micro-Enterprise Tax Payers Need to Know?

The new year will bring a series of significant tax changes that will also affect entrepreneurs – self-employed individuals and micro-enterprise tax (MUN) payers. We have compiled the most important information – take a look and be ready for 2025!

Minimum Wage

Starting from 2025, the minimum monthly wage is to be increased to EUR 740 from the current EUR 700. Self-employed individuals should note that this also affects the base for social contributions. From now on, social contributions will have to be made based on at least EUR 740 or another higher amount chosen voluntarily. Accordingly, the minimum mandatory contribution base will change to EUR 2,220 per quarter instead of the current EUR 2,100.

Personal Income Tax and Non-Taxable Minimum

Starting from 2025, the differentiated non-taxable minimum will be replaced with a unified non-taxable minimum of EUR 510 per month. Additionally, the three existing personal income tax rates will be replaced by two:

• for gross income not exceeding EUR 105,300 annually (EUR 8,775 per month), the rate will be 25.5%;
• for gross income exceeding EUR 105,300 annually (EUR 8,775 per month), the rate will be 33%;
• an additional rate of 3% will apply to income exceeding EUR 200,000 annually.

Micro-Enterprise Tax Payers (MUN)

Currently, MUN payers are subject to the rule that if they cease operations and stop paying MUN during the tax period, they cannot choose to pay MUN again in the same or the following tax period. The 2025 changes will allow individuals to re-register as MUN payers even in the tax period in which operations and MUN payments were discontinued, as well as in the subsequent period, provided no business activity was conducted under another tax regime in the interim.

The period after which MUN payers without turnover lose their MUN status will be extended. In the future, a MUN payer will lose their status starting with the next tax period if there has been no turnover for two consecutive tax periods. 

Recipients of Royalties

Good news for recipients of royalties! Until 31 December 2027, they can continue operating under the current system: the income payer withholds the tax at the source, and the recipient of the royalties does not need to register economic activity.

With the implementation of these changes, pats.lv system will also be updated to ensure accurate automatic tax calculations and report preparation, allowing you to manage your accounting worry-free!