Which is cheaper for a beauty professional in Latvia: the general regime or the micro-enterprise tax?

It depends on expenses. The micro-enterprise tax is 25% of turnover with no deduction for expenses. Under the general regime, social contributions and income tax are calculated on profit, after rent, materials and other costs. With high expenses the general regime is often cheaper; with almost no expenses the micro-enterprise tax can be. Run your own numbers with an accountant.

Do self-employed people in Latvia still pay minimum social contributions in 2026?

No. Amendments adopted on 16 April 2026 removed minimum contributions for the self-employed, including micro-enterprise taxpayers, for periods from 1 January 2026. Employers still pay minimum contributions for employees.

Can a beauty professional in Latvia pay the patent fee?

In practice no. Only a reduced patent fee remains (17 euros a year or 9 euros for half a year) for old-age pensioners and people with group 1 or 2 disability, with income up to 3000 euros a year, no employees and a limited list of activities. Beauty services are not on that list.

Does Tervita calculate taxes or file returns?

No. Tervita is booking and salon software with a point of sale for recording sales. It does not calculate taxes, does not file anything with VID and is not a VID-registered cash register.

29 October 2026

Self-employed, micro-enterprise tax or SIA: how a beauty professional can work in Latvia in 2026

Short answer: this article is about Latvia. Most beauty professionals there start as self-employed, registered with the State Revenue Service (VID), and then choose between the general regime (social contributions of 31.07% and income tax on profit) and the micro-enterprise tax (25% of turnover, no expenses deducted). With high costs such as chair rent and materials, the general regime is often cheaper; with almost no costs, the micro-enterprise tax can be. A limited liability company (SIA) usually makes sense once there are employees, partners or large obligations. In 2026 minimum social contributions for the self-employed were abolished, and SIA owners got an optional 15% corporate tax rate on dividends.

This is general information, not tax advice. Figures come from VID guidance and LV portāls explanations checked on 29 October 2026. Check the current wording and work out your own case with an accountant. The full Latvian version with examples and sources is here.

The main options

	Self-employed (VID)	Individual merchant (IK)	SIA
Registered with	VID	Register of Enterprises	Register of Enterprises
Liability	personal, all assets	personal, all assets	usually the company only
Tax regime	general or micro-enterprise tax	general or micro-enterprise tax	corporate income tax on distributed profit
Accounting	simpler	simpler	double entry, annual report

Taxes in 2026

Self-employed, general regime: if monthly profit is at least 780 euros (the 2026 minimum wage), contributions are 31.07% of a freely chosen amount of at least 780 euros, plus 10% for pension on profit above it. Below 780 euros, only 10% for pension on actual profit. Quarterly report by the 17th and payment by the 23rd of the following month. Personal income tax is paid once a year: 25.5% up to 105,300 euros and 33% above; the 2026 non-taxable minimum is 550 euros a month.
Micro-enterprise tax: 25% of turnover, 80% of which counts as social contributions and 20% as income tax. Quarterly return, due by the 15th of the month after the quarter, only for quarters with turnover. Available to VID-registered self-employed people, IKs and some other forms, but not to an SIA, and not combined with VAT registration.
SIA: corporate income tax of 20% is paid when profit is distributed (1000 euros of dividends means 250 euros of tax). From 2026, a company owned only by individuals may choose 15% instead, with 6% personal income tax withheld from the dividends. Board member pay is taxed like a salary.
Patent fee: only the reduced patent fee for pensioners and people with disabilities remains, and beauty services are not among the allowed activities.
VAT: registration is required above 50,000 euros of turnover a year (since 2025, previously 40,000), and in some cases regardless of turnover, for example when buying services from a foreign business.

From 1 April 2027 a new beginner micro-enterprise tax is planned: 10% of turnover for those newly registered, with turnover up to 12,000 euros a year, selling only to private individuals, without VAT registration or employees. The rules were adopted on 17 September 2026 and may still change.

Chair rental

Renting a chair or room means the professional is self-employed, collects payment from clients, pays her own taxes and pays the salon rent against an invoice. Cash and card payments usually have to go through her own VID-registered cash register. VID looks at the actual relationship, not the contract title: if the salon sets prices and hours, collects the money and pays her a percentage, it is closer to employment. Pay models inside a salon are covered in stylist pay and commission in Latvia.

Where Tervita fits

Tervita handles bookings, the calendar, client records and a point of sale for recording sales (cash, card, bank transfer, gift card and other methods), with receipts on screen, print or PDF. It is not a fiscal cash register, does not calculate taxes and does not file returns with VID. Keep your bookkeeping with an accountant. Try Tervita free for 14 days.