A self-employed temporarily has no income – how to register that?

Unlike those hired under standard employment contracts, self-employed people cannot always rely on a regular and consistent income each month. There may be periods where you do not receive any income for a month, a quarter, or even an entire year – particularly if you’ve only recently started your business activity, or your services are only in demand during certain seasons. We’ve summarised the key points to keep in mind in such situations.

Do I need to give up my self-employed status?

There’s no need to give up your self-employed status. Even if you operate at a loss for an extended period, have no income, and only incur expenses – you can still maintain your status. It does not prevent you from continuing your activity, purchasing the necessary materials or equipment, or paying for services that could help generate income in the future.

Do I need to keep a business activity log?

Yes. Even if you have no income and only expenses, these must – and should – be recorded in your business activity log.

Do I need to submit a quarterly report and an annual tax return?

If you have no income (or profit) from your business activity during the quarter, no social contributions are due. In this case, you are not required to submit a quarterly social contributions report for self-employed individuals. However, you must still submit an annual income tax return, even if there have been no transactions or income.

Minimum income tax

Please note: once a year, by 23 June, you are required to pay a minimum income tax of €50, if you have not earned any income from business activity in the tax year or if the calculated tax from that income is less than €50.

This payment does not apply:

• in the first and second tax year of your business activity,
• in the year you terminate your business activity,
• in other cases listed in Section 19 of the Law on Personal Income Tax.

What can you do about it?

In our previous blog post, we shared a few tips on how a self-employed person can earn more. We wish you success in finding the right path! Remember – you should keep your business activity log even when there is no income and only expenses. The most convenient way to do this is via pats.lv!