While Covid-19 restrictions continue, the government has decided on support measures to companies suffering from Covid-19. The government has approved the following support measures:
Compensation for working capital turnover
This support will be available to taxpayers, micro-, small and medium companies, as well as large companies (performers of economic activity) registered at the State Revenue Service (SRS).
Business operators will have access to aid for working capital in the amount of 30% of the total amount of the company’s gross salaries where salary taxes have been paid in August, September, and October 2020; however, aid will not exceed EUR 50,000 during the support period or EUR 800,000 to a group of related parties, and for companies in the fishing industry the limit is EUR 120,000 for a group of related parties.
To receive support available through the crisis grant programme, the company will have to apply to the SRS in the electronic declaration system or portal www.latvija.lv. Support will be available only once until 15 January 2021 for the whole support period.
To qualify for the grant, the company has to prove that:
- during the support period its turnover dropped by at least 20% in comparison to the average turnover for this year’s August, September, October taken together;
- support will be used to compensate for the drop in working capital flow until 31 March 2021.
Support will not be granted if:
- the company works in the primary production of agricultural products;
- the company has an outstanding tax debt that exceeds EUR 1,000; or
- the company’s average tax amount administered by the SRS is less than EUR 200 during the previous six months before the declaration of emergency.
Altum-syndicated loans to implement investment projects
Large companies registered in Latvia can receive syndicated loans from the state-owned development finance institution Altum. Besides, loans will also be available to medium companies to implement sustainable projects.
A company will be allowed a loan of up to EUR 15 million. The share covered by Altum may not exceed 50% of the syndicated loan.
The loan term may not exceed three years for current asset loans where the costs allowed are calculated based on the expected salaries payable deriving from workplaces created as a result of the initial investment. The parties will determine the appropriate loan term by considering industry specifics and other aspects. Support will be available until 31 December 2021.
Loan support and interest rate subsidies will not apply to agriculture, fishery and aquaculture companies, as well as such industries as tobacco production, gambling and the like.
Support mechanism for taxpayers suffering from measures introduced to restrict the spread of Covid-19
Legal entities and natural persons whose operations have suffered from restrictions imposed to limit the pandemic are eligible for support. Support is meant for those persons whose principal type of business according to the NACE classification has been included in the annex to the Cabinet Decision; this applies also to culture industries.
Self-employed persons who apply the general tax payment regime, persons who receive royalties, who have not registered as performers of economic activities, and sole proprietorships whose economic activity has been suspended as a result of the restrictions, or whose income from economic activity has decreased by at least 20% in comparison to this year’s August, September and October, will be eligible for support in the amount of 75% of the average income from economic activity or royalties during Q3 this year; but not exceeding EUR 1,000.
Self-employed persons who pay the micro-enterprise tax will be eligible for 50% of monthly average income for Q3 this year. Payers of patent payments will be eligible for support of EUR 330.
To obtain support, companies and self-employed persons have to apply to the SRS by entering the information required for the support application in the electronic declaration system. The term for the support measures is 9 November through to 31 December this year.
Support will not be available if outstanding taxes on the application date exceed EUR 1,000.
Idle-time payments to employees of companies affected by Covid-19
Employees working at companies affected by Covid-19 will be eligible for idle-time payment. This support will be at least EUR 330, but not more than EUR 1,000 a month. In addition to idle-time payment, the employee can receive an extra EUR 50 for each dependent child under 24.
The regulations state that support as compensation for idle time will be paid to the employee at the amount of 70% of the reported monthly average gross salary from 1 August to 30 October this year or of the reported monthly average gross salary for those months after 1 August when the employee actually worked. An employee of a micro-enterprise taxpayer will be eligible for idle-time payment of 50% of the monthly average gross salary at the micro-enterprise for Q3 2020.
To apply for idle-time payment, the employer has to submit an application to the SRS in the electronic declaration system. The support measures will be applied from the first day of the emergency, 9 November, until 31 December this year.
Idle-time payment will not be granted if:
- the employer has a tax debt,
- the employer is insolvent,
- the employer or its board members have a record of punishments.
Support is available to companies affected by Covid-19 to subsidise salaries for employees who work part-time. The state support is planned for employers in the amount of 50% of the reported monthly average gross salary, but not more than EUR 500 a calendar month per employee.
In the meanwhile, the employer must pay the employee the difference between the support received and the salary; this rule will ensure that the employee receives 100% of his/her remuneration.
Employers can apply for salary subsidies from the SRS in the electronic declaration system. The application procedure requires substantiation for the drop in turnover, as well as confirmation that employment relations would be terminated in the absence of state support for salary subsidies. Support measures will be applied from the first day of the emergency, 9 November, until 31 December this year.
Support is not available if the employer has a tax debt, is insolvent, or the employer or its board members have a record of punishments.
State-paid sick-leave certificate for employees with respiratory disease
To help companies whose employees are sick or where the entire staff is forced to stay in quarantine due to illness caused by Covid-19, during the Covid-19 crisis the state will pay the first three days of sick-leave for employees suffering from a respiratory disease and staying in quarantine.
From 16 November this year until 30 June 2021, a person who has received a “B” sick-leave certificate due to Covid-19 or staying in quarantine will receive sickness benefit during this period from the first day of incapacity for work. These rules likewise apply to persons whose sick-leave certificate has been issued due to respiratory disease. On the other hand, if a person receives an “A” sick-leave certificate, the employer will pay sickness benefit for the term until the 10th day of temporary incapacity for work.