Patent Fee (Patentmaksa): Fixed-Rate Tax for Small Activities

EUR 50–100 per month. No income tracking. No expense receipts. No declarations beyond the patent application itself. The patent fee (patentmaksa) is Latvia's simplest tax regime — and its most limited.

What It Is

A fixed monthly or annual payment that covers all tax obligations for certain small-scale economic activities. The fee amount is set by Cabinet of Ministers regulations and varies by activity type and municipality.

No calculations. No percentages. You pay the fixed amount and keep everything you earn (up to the annual limit).

Who Can Use It

Requirements (all must be met):

Natural person only (not a company)
Activity falls within the approved list
Annual income from the patented activity does not exceed EUR 15,000
No employees

Qualifying activities include (examples, not exhaustive):

Private tutoring
Home-based food preparation (cottage food)
Small-scale handicrafts
Certain beauty and personal care services
Fishing (artisanal)
Seasonal agricultural processing

The list is specific and defined by regulation. Not every small activity qualifies. Check the current Cabinet regulations or consult VID before assuming your activity is eligible.

The Social Protection Trade-Off

The patent fee includes a small VSAOI component, but the social protection it provides is minimal. Pension credits accrue at the lowest possible rate. Sick leave coverage is minimal. Parental benefits are based on the very low contribution base.

For someone who uses the patent fee as supplementary income alongside a salaried job (where full VSAOI is already being paid), this is not a concern — the main job provides social protection.

For someone who relies on the patent fee as their sole income, the long-term consequences are significant. Years of patent-fee-only work translate into very low pension entitlements. In our experience, people often underestimate this impact until they approach retirement.

When to Move Beyond the Patent Fee

Three signals that it is time to register as self-employed or form a SIA:

Income approaching EUR 15,000/year. The limit is absolute. Exceeding it voids the patent.
You want to hire someone. Patent fee holders cannot employ others. Even one part-time assistant requires a different structure.
Your activity is growing. If what started as occasional tutoring has become a regular business with repeat clients and steady income, the administrative simplicity of the patent no longer justifies the minimal social protection.

The transition to self-employed status is simple — register with VID, start tracking income and expenses, and begin paying PIT + VSAOI. For many people, the tax amount increases modestly but the social protection improves dramatically.

Thinking About Your Next Step?

CORVUS Accounting & Tax advises patent fee holders on when and how to transition to more robust tax structures. We make the move simple and ensure nothing falls through the cracks.