Latvia self-employed net income calculator (microenterprise tax)
Your net income under Latvia's microenterprise tax is revenue minus a flat 25%, with no separate expense deduction, available up to 40,000 EUR of annual turnover.
Worked example: with Annual revenue of 25,000, this model computes Net income / year 18,750. See the full breakdown.
⚠ Illustrative rates Updated for 2026 · sources checked 2026-08-22
How mikrouzņēmuma nodoklis in Latvia is calculated
Latvia gives self-employed people and small businesses a choice: the general regime (VSAOI social contributions at 31.07% plus personal income tax on profit after documented expenses) or the microenterprise tax (MET) — a single flat 25% of gross revenue with no expense deduction at all, available up to 40,000 EUR of annual turnover.
MET is simpler to compute and to reason about, which is why this model uses it: one rate, one number, no receipts to keep. It tends to suit freelancers with genuinely low costs — a service business with little to deduct rarely loses much by giving up the expense deduction, and gains a great deal of simplicity in return.
The trade-off runs the other way for a business with real costs: the general regime's expense deduction can beat MET's flat rate once documented costs pass a certain share of revenue, so MET is the cheaper default rather than the cheaper answer for everyone.
Worked example
| Annual revenue (EUR) | 25000 |
|---|---|
| Microenterprise tax (25%) ✓ | 6250 |
| Net income / year ✓ | 18750 |
| Cap Excess ✓ | 0 |
Every row is computed by the engine from the inputs above. Rows marked ✓ are additionally pinned by a published self-test vector.
Frequently asked questions
How much net income from 25,000 EUR revenue in Latvia?
Under the microenterprise tax, 25% of 25,000 EUR is 6,250 EUR, leaving 18,750 EUR net — the whole calculation in one step, since MET has no separate expense deduction.
What happens above the 40,000 EUR cap?
Revenue over the cap is no longer eligible for the microenterprise regime; the general self-employed regime (VSAOI plus IIN on net profit) would apply instead, which this page does not model.
Is the microenterprise tax always cheaper?
Only when documented expenses are low relative to revenue. A business with high real costs can come out ahead on the general regime, which deducts actual expenses before tax rather than taxing gross revenue at a flat rate.
Sources
- Valsts ieņēmumu dienests (VID) — self-employed persons, individual entrepreneurs · checked 2026-08-22
- Balansis — Micro-Enterprise Tax Latvia 2026 · checked 2026-08-22
Estimate. Not tax advice. The rates in this calculator are illustrative: they reproduce the shape of the charge through 2 self-test cases, but they are not the official schedule, so the amount shown will not match your bill. Use the official source above for that.
Check the arithmetic yourself: how this calculator is verified — the formula behind every derived value, the 2 test cases the engine reproduces, and what the badge does and does not claim. Also available as machine-readable JSON.
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