The main small partnership (MB) fees are:
- Profit tax
- Value added tax (VAT)
- Social insurance taxes (State social insurance (VSD) and compulsory health insurance (PSD))
- Personal income tax (PIT)
Profit tax. The standard corporate tax rate is 15 percent. However, MB may be subject to a preferential rate of 5 percent corporate tax rate if:
- the average number of employees does not exceed 10 people;
- annual income does not exceed EUR 300,000;
- MB members do not have more than 50 percent shares or parts in other companies.
VAT. MB must register as a VAT payer if the income in the last 12 months exceeds EUR 45,000 or the value of goods purchased from other member states exceeded EUR 14,000 in the previous calendar year. The standard VAT rate is 21 percent.
Social insurance taxes. MB pays social insurance (State social insurance (VSD) and compulsory health insurance (PSD)) taxes on funds disbursed for members’ personal needs.
Social insurance taxes rates:
PSD contribution rate – 6,98 percent.
VSD contribution rate – 13,83 percent, if the member participates in additional pension accumulation – 16,83 percent.
Social insurance taxes are calculated from half of the amount paid out for the personal needs of the MB member.
If the MB member does not use funds for personal needs, there is no need to pay social insurance taxes (VSD).
Personal income tax (PIT). All MB members’ income from the small partnership is considered Class B income. This means that the obligation to pay income tax falls on the MB member who received the income – at the end of the year, the MB member must submit the VMI income declaration and pay the PIT tax. MB director’s salary is taxed at 15% PIT, MB members’ funds for personal needs – 20 percent PIT, profit payout to MB members – 15 percent PIT.