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State of emergency established in Latvia due to Covid-19

The state of emergency in Latvia is valid from 9 November, 2020 to 6 December, 2020. During the state of emergency, the regulatory enactments in the field of spread and consequences of Covid-19 infection and partially the Cabinet of Ministers regulations “Epidemiological safety measures to limit the spread of Covid-19 infection” are valid.

On November 10, the Cabinet of Ministers determined the aided sectors and the support mechanisms available to them. The list of aided sectors is available hereThe regulations on support mechanisms will enter into force when they will be published in the Official Journal of Latvia.

Employment
Idle time benefits
The idle time is a fixed period from 9 November 2020 to 31 December 2020, employers, self-employed persons and patent fee payers may apply for idle time benefit if:
  • the activity complies with the specified types of activity (aided sectors), which are directly or partially subject to restrictions due to the state of emergency;
  • the decrease in turnover in the aid period has been at least 20% compared to the average turnover in August, September, and October 2020.
The amount of the benefit:
  • for an employee is 70% of the employee’s declared average gross salary for the period from 1 August to 30 October 2020, but not less than EUR 330 and not more than EUR 1000 per calendar month;
  • for an employee of a micro-enterprise is 50% of the average monthly gross salary for the third quarter of 2020, not less than EUR 330 and not more than EUR 1000 per calendar month;
  • for a self-employed person under the general tax regime and a recipient of royalties is 75% of the average income from economic activities or royalties of the person concerned, but not more than EUR 1000;
  • for a self-employed person, a micro-enterprise tax payer is 50% of the micro-enterprise tax payer’s average monthly income from economic activity for the third quarter of 2020, but not more than EUR 1000;
  • for a patent fee payer is in the amount of EUR 330, if there is a valid patent during the aid period.
 The idle time benefit shall not be granted:
  1. if there is a tax debt exceeding EUR 1000 (for which there is no extension or agreement), surcharges, or penalties;
  2. if the economic activity is or has been suspended during the preceding 2 years;
  3. if it the taxpayer is, or during the preceding 2 years has been, excluded from the VAT register;
  4. if all tax returns and annual reports (for the period of 12 months prior to the emergency) have not been submitted;
  5. if there are ongoing insolvency proceedings;
  6. to an employer affected by the crisis whose employees are hired by another taxpayer;
  7. to members of the employer’s supervisory board;
  8. for calendar business days, when sickness benefit is granted;
  9. if the employer fails to certify that the employee is not in a state of incapacity for work or will not be dismissed during the period of granting the idle time benefit.
 Salary subsidy
Salary subsidy is an aid for merchants for compensation of employees working part-time in the amount of 50% of the declared average gross monthly salary for the period from 1 August 2020 to 31 October 2020, but not more than EUR 500 per calendar month per employee. The employer is obliged to pay the employee the difference between the amount of aid received and the amount of salary, thus ensuring that the employee receives 100% of salary. The aid will be paid only to employees.
Commercial activities

Taxpayers affected by the Covid-19 crisis can apply for working capital aid (total funding EUR 30’000’000) if the taxpayer:

  1. meets the definition of micro, small, medium and large economic operator;
  2. carries out economic activity in the aided sectors;
  3. is registered as a taxpayer with the State Revenue Service of the Republic of Latvia;
  4. the decrease in turnover is at least 20% for the entire aid period compared to the average turnover in August, September, October.
The amount of aid is 30% of the total gross salaries of the company subject to salary taxes paid in August, September and October 2020, but not more than EUR 50 000 for the aid period and not more than EUR 800,000 for a related group of persons.
Taxes
Until 30 December, 2020, the taxpayer has the right to apply for:
  • an extension of the tax payment term; or
  • a deferral of up to three years.
The delayed tax payment, for which the extension of payment term is granted, is not subject to calculation of late interest, as well as the information on the tax payer shall not be included in the public data base of tax debtors maintained by the SRS.