Background information

Taxpayers may request to divide or to postpone tax payments for a period of up to three years, counting from the date of submission of the application, as well as to benefit of an extension for overdue tax payments, the payment term of which has already been extended in accordance with the Law if the overdue is the result of the COVID-19 crisis.

The measure is established by the law “On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19” (adopted on 20 March 2020, valid from 22 March 2020).

All conditions in detail for this measure are set by the Regulation of Cabinet of Ministers No. 165 “Regulations Regarding the Employers Affected by the Crisis Caused by COVID-19 which are Eligible for the Allowance for Idle Time and Division of the Payment for Late Tax Payments in Instalments or Deferral Thereof for up to Three Years”.

Content of measure

The following taxpayers which have been affected by the crisis may request to divide or to postpone tax payments:

• Income from economic activity has, due to the spread of COVID-19, decreased by at least 30% in March or April 2020 in comparison with the respective month in 2019.
• Income from economic activity has, due to the spread of COVID-19, decreased by at least 20% in March or April 2020 in comparison with the respective month in 2019, and they meet at least one of the following criteria: i) in 2019, the export volume of the employer affected by the crisis amounts to 10% of the total turnover or is not less than €500,000; or ii) the average monthly gross work remuneration disbursed by the employer affected by the crisis in 2019 is not less than €800; or iii) as on 31 December 2019, long-term investments in fixed assets are at least €500,000.

The taxpayer has, not later than within two months after the rescheduling of the term for payment or from the day of coming into force of the Law, to submit a justified application to the State Revenue Service. This agency has the right to divide the payment for late tax payments in installments or to defer it for a period of up to three years as of the date of the submission of the application.

No late payment fee is calculated for overdue tax payment, if the payments are granted the extension. Information about the company is not included in the database of tax debtors administered by the State Revenue Service.

Use of measure

Up to 30 June 2020, 12,196 companies have used the opportunity to postpone tax payments in the total amount of €209,686,140.

Up to 16 July 2021, 25,471 companies have used the opportunity to postpone tax payments in the total amount of €432 million.

Up to 3 September 2021, 26,580 companies have used the opportunity to postpone tax payments in the total amount of €444 million.

Wholesale and retail trade sector contribute 31.5% to total sum, manufacturing sector – 17,5%, and transport and storage – 14.7%.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	No special funding required

Social partners

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

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Direct consultation outside a formal body	Direct consultation outside a formal body

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

• Unknown
• Main level of involvement: Unknown

Involvement

Top level social partner organisations – the Latvian Employers’ confederation and the Free Trade Union Confederation of Latvia – on 17 March 2020 has published “Statement on support for government action to limit the spread of Covid-19 and reduce the impact of the crisis on Latvian companies and workers”. The social partners emphasized the need for cooperation of government, businesses, workers and citizens to ensure that everything we do helps to address this crisis.

Views and reactions

As far as we know social partners participate in discussions on measures for the prevention and suppression the spread of COVID-19 and on crisis impact on economy. However specific opinions of social partners are not published.

Sources

• 06 April 2020: VID izmaksājis dīkstāves pabalstus 5516 darbiniekiem (www.vid.gov.lv)
• 09 April 2020: Law On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19 (likumi.lv)
• 09 April 2020: Regulation of the Cabinet of Ministers Nr. 165 “Regulations Regarding the Employers Affected by the Crisis Caused by COVID-19 which are Eligible for the Allowance for Idle Time and Division of the Payment for Late Tax Payments in Instalments or Deferral Thereof for up to Three Years” (likumi.lv)
• 09 April 2020: State Revenue Service informative page on COVID-19 (www.vid.gov.lv)
• 10 June 2020: Law on the Suppression of Consequences of the Spread of COVID-19 Infection (likumi.lv)
• 13 July 2020: During the period of downtime benefits, the SRS has paid downtime benefits in the amount of more than 53 million euros to almost 55 thousand people. (www.vid.gov.lv)
• 27 July 2021: Statistics on support from the State Revenue Service (www.vid.gov.lv)
• 15 September 2021: State Revenue service statistics 15 September 2021 (www.vid.gov.lv)