Choose the calculator you are interested in

Which tax payment regime to choose?

One of the key prerequisites for successful economic activity is choosing the most suitable and beneficial tax regime. It is equally important for experienced self-employed individuals to keep up with changes in tax laws and assess whether their current tax regime is still advantageous.
Planned monthly income (EUR)
Forecasted expenses in relation to income
Are you planning to have VAT taxable transactions?*
Are you planning to receive royalties for creating or performing works protected by copyright?

Most suitable tax regime

—

If you are planning to start a business or change your current tax regime, we invite you to learn the key information about each available tax regime.

Microenterprise Tax (MET)

Tax rate: 25% of turnover
Expense deductions: Not allowed
Not available for: VAT payers
Allowances: Since January 1, 2024, the non-taxable minimum and dependent allowances may also be applied if the person receives employment income (previously this was not allowed).

Personal Income Tax (PIT)

Tax base: Profit (income minus expenses)
Tax rate: From 25.5% to 33% (depending on annual income)
Social contributions:
31.07% of income not lower than the minimum wage
+10% pension contribution if income exceeds the minimum
If income is below the minimum - only a 10% pension contribution
Reporting:
Report submission by the 17th of the following month
Tax payment by the 23rd
Allowances:
All tax allowances provided by law may be applied
Standard expense deductions (25% or 50%) may be applied to copyright income
Who can use it:
Self-employed persons
Sole traders
Farmers
Recipients of copyright remuneration (since 01.07.2021)

Corporate Income Tax (CIT)

Tax rate: 20%
Applied when:
Profit is distributed as dividends
Or funds are used for non-business purposes
Features:
Dividends are not subject to Personal Income Tax
The tax base is divided by a coefficient of 0.8
If the company does not pay salaries but turnover exceeds five times the minimum wage, payroll taxes must be paid for board members.
Who can use it:
Limited Liability Companies (SIA)
Low-capital Limited Liability Companies
Joint Stock Companies (AS)

Tip: how to choose the most suitable tax regime?

If you... Recommended tax regime
Want to claim more expenses or tax relief PIT
Want to build a full-fledged company and pay dividends CIT (Ltd.)
Plan to grow and hire employees CIT

Want to start your own business?

Starting a business or establishing a new company in Latvia is easier today than ever before. Pats.lv is more than just an automated accounting system - it is also a practical knowledge platform with guides, calculators, videos, and step-by-step instructions.

Choose your business structure and tax regime

Our calculator will help

Use the guide: Register with the State Revenue Service or the Register of Enterprises

Let Pats.lv take care of your accounting

Registration

Register as a VAT payer if required

Read more

Frequently Asked Questions

It is a natural person who has registered with VID in Latvia and earns income from economic activity, paying taxes under the IIN regime.
In practice, these are closely related terms: a self-employed person is a VID-registered performer of economic activity who pays VSAOI and IIN independently.
The most common options are: self-employed person, or SDV, under the IIN regime, individual merchant, or IK, micro-enterprise with MUN and SIA with UIN.
If expenses are low and turnover is small, MUN is often more beneficial; if there are many deductible expenses, IIN is usually more suitable. Use the calculator to compare the regimes in your own situation.