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Factsheet for case EE-2020-1/384 Updated – measures in Estonia

Measures to support shipping companies

Laevandusettevõtete toetusmeetmed

Country Estonia , applies nationwide
Time period Temporary, 01 January 2020 – 31 December 2023
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Ingel Kadarik (Praxis Center for Policy Studies) and Eurofound
Case created 08 April 2020 (updated 06 January 2021)

Background information

Estonian shipping companies are in difficult situation due to the restrictions on borders (decreased tourism, decreased cargo volumes etc). At the same time, trade must be encouraged to avoid further damage to the economy. It is important to avoid the closures of the shipping companies as these have an important role in contributing to the economic growth in Estonia. In order to use the supportive measures, the supplementary state budget was approved by the Parliament on 15 April 2020 and application for state aid was approved by the European Commission.

Content of measure

Three measures are foreseen to support the shipping companies:

Firstly, between 1 April 2020 and 1 April 2021, shipping companies are not charged with waterway charges.

Secondly, from 1 January 2020 retroactively til the end of 2020, all port charges for passenger transport ships in the amount of 75% will be reimbursed by the state. A total of €20 million would be used for it.

Thirdly, passenger international shipping companies will be paid a quarterly subsidy equal to the difference between the labor taxes calculated on the salary paid to the crew member and the labor taxes calculated from the tax base (1.5 or 2.5 times the minimum monthly wage). Two companies currently qualify under the measure. The measure would be used until the end of 2023. It is expected that €3.7 million in 2020 and €7.7 million in 2021 will be used for the measure.

Updates

The following updates to this measure have been made after it came into effect.

30 December 2020

On 9 October, the government approved a decree to establish the support mechanism for passenger ship operators, which allows 80% compensation of the loss of income (e.g. income from passenger or cargo transport, sales of goods or services, or renting rooms) during the period of 13 March - 15 June (Estonian-Finnissh shipping line) and 13 March - 30 September (Estonian-Swedish). Four operators received the support in the total amount of €20 million. The operators applied for €39 million.

06 October 2020

In the end of August 2020, Estonia received the European Commission's approval to offer state aid to shipping companies. After the decision the conditions of the labour taxes subsidy were confirmed.

Use of measure

All shipping companies will be eligible for the first measure. Two companies are eligible for the labour tax measure.

Target groups

Workers Businesses Citizens
Does not apply to workers Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
National government
EU (Council, EC, EP)
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement as case not in social partner domain No involvement as case not in social partner domain
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Unknown

Involvement

n.a.

Views and reactions

N.a.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      H - Transportation And Storage H50 Water transport

This case is not occupation-specific.

Sources

  • 02 April 2020: Laevafirmad võivad saada väga suure riigipoolse toe. (arileht.delfi.ee)
  • 03 April 2020: Laevandusettevõtted saavad riigilt mitmekülgset tuge (www.mkm.ee)
  • 17 September 2020: Government approved the conditions of the support to shipping companies (Valitsus kinnitas reisilaevanduse toetamise tingimused) (www.mkm.ee)
  • 17 December 2020: Additional support to shipping companies (Riik toetab 20 miljoniga koroonakriisist mõjutatud rahvusvaheliste reisilaevade operaatoreid) (www.rtk.ee)

Citation

Eurofound (2020), Measures to support shipping companies, case EE-2020-1/384 (measures in Estonia), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.