Micro-enterprises will now be eligible to benefit from the simplified application of value added tax (VAT), according to amendments to the Micro-Enterprise Tax Law adopted by the Saeima in the third and final reading on Thursday, 29 May.

Chair of the Budget and Finance (Taxation) Committee, Anda Čakša, who oversaw the draft law’s progress in the Saeima, stated during the debate: “This is a small but important relief for small businesses operating under the micro-enterprise tax regime. Entrepreneurs will face fewer obligations as VAT payers, enabling them to offer their services on foreign platforms and relieving them of a number of other administrative procedures.”

The amendments allow micro-enterprises to register with the State Revenue Service as VAT payers under a special procedure, thereby making it possible for them to offer their services on foreign platforms.

Previously, in order to provide services abroad, an enterprise had to be registered as a VAT payer under the general procedure. This involved more complex requirements for VAT accounting and bookkeeping and, as noted in the explanatory note to the amendments, also led to the loss of micro-enterprise status.

In December last year, the Saeima adopted amendments to the VAT Law specifying that the simplified VAT payment procedure may be used exclusively by companies that receive services or purchase goods within the European Union, including those offering their services via foreign platforms, such as in the guest accommodation sector.

Micro-enterprises will be able to take advantage of the simplified VAT procedure starting from 1 July this year.

Saeima Press Service