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Latvia: Expanded tax relief for companies (COVID-19)

Latvia: Expanded tax relief for companies (COVID-19)

Tax relief measures provided for companies affected by the coronavirus (COVID-19) pandemic have been expanded in Latvia.

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Legislation passed on 20 March 2020 provides state support to companies in response to COVID-19. Two of the tax relief measures were available only for companies in industries “most affected” by COVID-19 and allowed:

  • Postponement of current and overdue tax payments, for up to three years, or the ability to make instalment payments when the delay is related to COVID-19 without triggering late-payment penalties; a request must be submitted to the tax authority
  • Support for “employee downtime” whereby the government will make monthly payments of 75% of their salaries, capped at €700 (not subject to payroll taxes), from 14 March to 14 May 2020 if the employer is not able to secure work for the employee because of COVID-19

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Regulations issued 24 March 2020 defined which industries were “most affected” by COVID-19 and include public catering, international passenger transportation, car lease, hospitality and tourism, public and cultural events, education, and fitness services.

These tax relief measures were extended on 26 March 2020 to all companies—regardless of their industry sector, provided the companies meet certain criteria:

  • Turnover in March or April 2020 compared to the respective month in 2019 decreased by 30% or more
  • Turnover in March or April 2020 compared to the respective month in 2019 decreased by 20%, if one of the three following requirements is met:
    • The company’s revenues from export amounted to at least 10% of total turnover in 2019, but not less than €500,000
    • Average salary paid in 2019 was at least €800
    • Long-term investments in fixed assets as at 31 December 2019 was at least €500,000

There are other criteria for a company to qualify for the downtime support—such as compliance with tax return submission rules, payment of outstanding tax liabilities, lack of identified major tax compliance breaches, etc. In assessing taxpayer applications for the postponement of tax payments, the tax authority will assess compliance with past tax payments and tax return submissions, how cooperative the taxpayer has been, and if there have been tax assessments raised following a past tax audit.


For more information, contact a KPMG tax professional in Latvia:

Ilze Berga | +371 67 038 000 | iberga@kpmg.com

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