At an extraordinary sitting on Thursday, 23 April, the Saeima adopted amendments to the Law on Measures to Prevent and Overcome the Threat to National Security and Its Consequences Due to the Spread of COVID-19, introducing several additional support measures.
According to the amendments, expenses incurred in providing social support will be considered operating costs and exempt from corporate income tax. These changes will help stimulate companies engaged in active social support during the state of emergency, such as providing schools with computers and other smart devices, supplying medical facilities with disinfectants, or delivering lunch and coffee to medical professionals.
The support will remain available to these companies until the end of the year, provided that the supplier and the recipient of the aid are not legally related and that information about the support has been made available to the public, for example, on radio, TV, or the company’s website. The company must submit information about the recipient and amount of the aid to the State Revenue Service (SRS) along with the company’s tax return of the final month of the financial year.
In order to limit the spread of COVID-19, it can be necessary to involve multiple institutions; for example, units subordinated to the Ministry of the Interior may help medical professionals implement quarantine measures. For this reason, it has been decided that the property of public persons may be transferred to institutions involved in ensuring epidemiological safety measures for use free of charge. Additionally, the ownership of certain items that are the property of public persons, namely, personal protective equipment and disinfectants, may be transferred without compensation.
The amendments stipulate that the refusal of the SRS to grant downtime allowance may be contested by the addressee of the administrative act who is either self-employed or the employer, but not an employee.
According to the explanatory note to the amendments, this procedure has been designed to limit the range of persons who have the right to contest the decision of the SRS and reduce the administrative burden of the SRS, which will no longer have to examine formal or unfounded applications submitted by third parties, namely, employees. As explained by the authors of the amendments, an employee may protect their interests by approaching their employer, who is the addressee of the administrative act.
Taking into account the state of emergency declared in the country, as well as restrictions on movement and assembly, which make it difficult to organise general meetings, it has been decided that social enterprises, public benefit organisations, capital companies of a public person, and public private capital companies may submit the annual activity report and consolidated annual report of the previous year until 31 July 2020.
The amendments also provide that municipal capital companies whose turnover has dropped by 50% as a result of the COVID‑19 crisis may receive a loan from the state budget to increase the equity of the company and ensure the funding of operating costs.
In addition, a municipality may offer discounts or exemption from rent for premises owned by the municipality to support public organisations and enterprises. Municipalities will not receive compensation from the state budget for these expenses.
During the state of emergency, national authorities and municipalities have the right to maintain the funding for services provided by public organisations in line with cooperation agreements concluded previously. These agreements may also be amended and adapted to the current situation, allowing to remunerate employees, instead of freezing or terminating the projects.
To support commercial shipping companies, the amendments also provide that the registration of freight vehicles not in use during the state of emergency may be temporarily suspended without returning number plates, and the compulsory civil liability insurance may be terminated early. As stated in the explanatory note, these steps will help commercial shipping companies reduce the administrative expenses associated with idle vehicles, including the cost of transporting number plates back to the location of the vehicle.
The amendments also provide for establishing an alternative investment fund using both public as well as private funds to support entrepreneurs, for example, by investing in a company’s capital. The fund will be managed by Development Finance Institution Altum.
In addition, the submission deadline for Latvia’s Stability Programme for 2020‑2023 is extended until 30 April, as, due to the crisis caused by COVID‑19, it was necessary to update the macroeconomic development scenario drawn up in February 2020. Previously, the programme had to be submitted to the Saeima by 15 April each year.
The amendments will enter into force on the next day after their promulgation.
Saeima Press Service