Estonia (Ettevõtluskonto & FIE) vs. Latvia (MUN & Pašnodarbinātais) — 2026 Tax Comparison
Compare 2026 Baltic micro-enterprise accounts (Estonia 20% Ettevõtluskonto vs. Latvia 25% MUN up to 40,000 €) and uncapped sole-proprietor regimes (Estonia FIE vs. Latvia General Pašnodarbinātais).
- Micro-Regimes up to 40,000 €/yr: Estonia’s Ettevõtluskonto charges 20% flat (+2%/4%/6% II pillar) vs. Latvia’s 25% flat MUN turnover tax.
- Above 40,000 €/yr (FIE vs. Pašnodarbinātais): Latvia caps full 31.07% VSAOI on the 780 €/mo minimum wage (242.35 €/mo) plus 10% pension on excess profit, beating Estonia’s uncapped FIE 33% / 1.33 social tax across mid-to-high revenues.
- Family Credits & VAT: Latvia’s General regime grants 3,000 €/yr per dependent child or qualifying spouse and a 50,000 € (21% PVN) VAT limit vs. Estonia’s 0 € family delta and 40,000 € (24% käibemaks) VAT limit.
- How does Estonia Ettevõtluskonto (20%) compare to Latvia MUN (25%) up to 40,000 €?
- Both regimes cap annual turnover at 40,000 € with zero expense deductions. Estonia’s Ettevõtluskonto (20% flat at 0% II pillar) leaves 5 percentage points (+2,000 €/yr at 40,000 €) more net income than Latvia’s 25% MUN.
- Why does Latvia General Pašnodarbinātais beat Estonia FIE above 40,000 €?
- Above 40,000 €, Estonia’s FIE levies 33% social tax on Profit / 1.33 (~24.81% effective up to 148,588 € profit) before 22% PIT. Latvia’s General Pašnodarbinātais allows paying full 31.07% VSAOI only on the 780 €/mo minimum wage plus 10% pension on the surplus, resulting in a noticeably lower combined burden—further reduced by 3,000 €/yr per dependent.
- How do domestic VAT thresholds differ between Estonia and Latvia in 2026?
- Latvia exempts domestic turnover up to 50,000 €/yr from 21% PVN, whereas Estonia exempts up to 40,000 €/yr from 24% käibemaks.
Official 2026 Statutory Sources & Verification
Verified against official 2026 statutory tax & social contribution rules (Last verified: Nov 2026).