17.12.2014 the Saeima adopted amendments to the Law On Personal Income Tax and the Law On State Social Insurance (published on 30.12.2014 in the official issue Latvijas Vēstnesis No. 257 (5317)) regarding specification of the income of the members of the board of directors of capital companies and imposition of salary tax and mandatory State social insurance contributions (MSSIC) on such income that came into force on 01.01.2015, informs the State Revenue Service.

The amendments impose an obligation to pay MSSIC and the salary tax from thinkable income of the member of the board of directors of a capital company in the amount equal to the minimal monthly salary – EUR 360, if in the current month of the taxation year in the capital company:

There were no employees or members of the board of directors that received remuneration in the amount of at least EUR 360;

The turnover of the relevant month exceeded EUR 1800.

It is deemed that in the month when both criteria apply, the member of the board of directors of a capital company has obtained income in the amount of the minimal monthly salary – EUR 360 – that is an income subject to the salary tax and MSSIC.

The above provision shall not apply:

if any of the members of the board of directors of a capital company as a member of the board of directors in another capital company obtained monthly remuneration that was not less than EUR 1800 and both capital companies were members of the same group of companies in the meaning of the law On Enterprise Income Tax;

in a calendar year, when a capital company was registered in the register of the Register of Enterprises of the Republic of Latvia.