Latvia

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

The government has announced the following measure:

• Coverage of 75% of the costs of outbreak-induced sick leaves or workers’ downtime, or up to EUR 700 per month.
• 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

Start-ups

• Same Coverage of the costs exists.

• A Latvian bank launched an initiative to support SMEs and Fintech in Baltic states.
• ALTUM, the national development finance institution, will provide loan guarantees and loans for crisis solutions to businesses affected by the Covid-19 crisis. Interest rates on loans for tourism sector businesses will be cut by 50% for small and medium enterprises and by 15% for large enterprises in tourism and related sectors.

Start-ups

• Loan guarantees and loans for crisis
• Solutions to businesses Interest rates on loans for businesses will be cut by 50% for small and medium enterprises

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

Main sources of information

• Latvia: Tax relief included in government’s response to coronavirus (COVID-19)
• Latvia: Expanded tax relief for companies (COVID-19)

Tax: Steve Austwick – saustwick@kpmg.com
Legal: Una Petrauska – upetrauska@kpmglaw.lv