Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure LV-2020-29/1325 – Updated – measures in Latvia
|Country||Latvia , applies nationwide|
|Time period||Temporary, 14 July 2020 – 31 December 2020|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Direct subsidies (full or partial)
|Author||Kriss Karnitis (EPC) and Eurofound|
|Measure added||26 October 2020 (updated 22 January 2021)|
On 29 July 2020, after coordination with the European Commission, a new support program enters into force, under which the state will subsidise the salaries of those working in the tourism sector, allocating €19.2 million, to overcome the consequences of the COVID-19 crisis. On 28 July 2020, the government allocated €3.8 million for marketing activities in the tourism sector. The program is set in force via Regulations of the Cabinet of Ministers Nr. 455 Procedures for Granting Support to Economic Operators in the Tourism Sector Affected by COVID-19.
Companies who have registered their activity in tourism sector are eligible for the support. The regulation lists NACE Rev. 2 codes in accommodation, catering, travel operators and other sectors to be eligible for the support:
(5510; 5520; 5530; 5590; 5610; 5621; 5629; 5630; 7739; 7490; 7911; 7912; 7990; 8230; 9004; 9321; 9329;).
The other criterion that has to be met is that the revenue from economic activity for the company had decreased by 30% in one month between April and June 2020 compared to the corresponding month of 2019 due to the COVID-19 crisis.
The company has to justify that the support will be used to pay employees from the moment of submission of the application until 31 December 2020.
The support is set at 30% of the mandatory state social insurance contributions paid by the economic operator in 2019, but not more than €800,000 for one company or group of connected companies.
The company cannot have tax debts exceeding €1,000 as of the date of submission of the application, except for tax payments for which an extension of the payment term has been granted, an agreement on voluntary payment of taxes or an agreement has been concluded.
656 companies have submitted an application for the support program up to 30 September 2020 (deadline of the submissions). The evaluation of the submissions, done by the Investment and Development Agency Of Latvia should be completed by 30 October 2020.
As indicated in the annotation of the draft law, according to the State Revenue Service, 7,356 companies are complying with the criteria, which employ a total of 61,988 employees with an average gross salary of €626 per month.
All €14.6 million allocated by the Government from state budget has been paid out. Around €217,000 (out of €4.7 million) has been paid out and around €3 million has been booked of the newly introduced support for hotels.
Employees in standard employment
Sector specific set of companies
||Does not apply to citizens|
Company / Companies
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Not applicable||Any other form of consultation, institutionalised (as stable working groups or committees) or informal|
Social partners' role in the implementation, monitoring and assessment phase:
Section VI “Public participation and communication activities” of the annotation of the draft law states that companies and business organisations representing tourism sector has been involved in the development of the measure.
Sector related business organisations are already looking for further support measures. The Latvian Hotel and Restaurant Association, together with municipalities and the Ministry of Economics, is addressing a number of other models of support mechanisms, such as real estate tax discounts in during the winter or a way to defer possible fines or rent costs.
|Economic area||Sector (NACE level 2)|
|I - Accommodation And Food Service Activities||I55 Accommodation|
|I56 Food and beverage service activities|
|N - Administrative And Support Service Activities||N79 Travel agency, tour operator and other reservation service and related activities|
|N82 Office administrative, office support and other business support activities|
|R - Arts, Entertainment And Recreation||R90 Creative, arts and entertainment activities|
|R93 Sports activities and amusement and recreation activities|
This case is not occupation-specific.
Eurofound (2020), Support for tourism sector companies affected by COVID-19, measure LV-2020-29/1325 (measures in Latvia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/LV-2020-29_1325.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.