Since announcing a state of emergency on 12 March 2020 due to COVID-19, the Latvian Government has been working on measures to support affected companies. The following support is already available:

Payment of salaries to employees from the state budget: where employees are not working as a direct consequence of limitations imposed by the Government (an order on “idle time” has been issued by the company), there is a possibility to apply for the salaries of those employees to be compensated from the state budget. This support is available in the amount of 75% of the employee’s average salary for the past six months, and up to EUR 700 per month per employee (the amount is not subject to taxes). Support is available for the period from 14 March until 14 May 2020. In order to receive support, the company needs to comply with the following criteria:

  • company income in March or April 2020 has decreased by at least 30% in comparison to the same month in 2019; OR
  • company income in March or April 2020 has decreased by at least 20% in comparison to the same month in 2019 and the company complies with at least one of the following criteria:
    •  exports amounted to at least 10% of total turnover in 2019 or amounted to at least EUR 50,000;
    •  the average gross monthly salary in the company in 2019 was at least EUR 800;
    •  long-term investments in assets amounted to at least EUR 500,000 as at 31 December 2019.

To apply for state-financed salaries for the period from 14-31 March 2020, an application will need to be filed with the State Revenue Service by 25 April 2020. Companies applying for support will need to certify that they will not at their own initiative terminate the employment of the employees in question within one month from the date of application. Additionally, there are certain exceptions when support will not be available, eg, if the company has a negative tax history (existing tax debt exceeding EUR 150 or prior exclusion from the VAT payers’ register), if the company is insolvent, etc.

Possibility to suspend tax payments for 3 years: companies complying with the above criteria may also apply to postpone their tax payment obligations for up to 3 years free of interest.

Rent release or lower rent for use of state and municipal properties to companies in selected industries: state and municipal institutions, as well as state companies will release fully or decrease rent for use of state and municipal property (including properties in special economic zones and free zones) to companies in selected industries as listed by the Government (currently the list includes 40 different economic activities, mainly related to tourism, transport, culture, sports, and entertainment). Release or decrease will not apply to services (electricity, heating, water, etc.) The release will be effective for the whole emergency situation.

Faster repayment of overpaid VAT: repayment in 30 days to all companies is now provided by law.

Extended timeline for filing annual reports: all companies can delay submission of their 2019 annual reports by three months. So the new deadline for companies usually filing their annual reports by 30 April is 31 July 2020. The new deadline for companies usually filing their annual reports by 31 July 2020 is 30 October 2020;

Possible postponement of real estate tax payments: municipalities can set deadlines for payment of real estate tax differently than those provided in the law “On the Real Estate Tax”. Deadlines may be moved to a later time during 2020;

Loan guarantees by the state development finance institution ALTUM: small, medium and large companies that did not have financial difficulties before COVID-19 will be entitled to guarantees ‒ up to EUR 5 million per company and up to 50% of loan obligations ‒ to secure existing loan obligations, or to secure new loans for working capital for up to 3 years.

State loans by ALTUM: small, medium and large companies that did not have financial difficulties before COVID-19 will be entitled to loans ‒ up to EUR 1 million per company, maximum term 3 years and grace period of 12 months for payment of principal amount at subsidized/lower interest rates and decreased security requirements ‒ to finance their working capital.