12.08.2014
Ministry of Economics

Government agrees on the tax and credit support measures for companies affected by Russia’s sanctions

In order to help the Latvian entrepreneurs overcome the consequences of embargo on the import of goods imposed by the Russian Federation, the Cabinet of Ministers at its sitting held on August 12 decided on the state aid to enterprises affected by the sanctions.

The decision of the Cabinet of Ministers provides for the state aid to those economic operators whose export share to Russia that is subject to sanctions exceeds 10% of total sales.

The incentives shall be granted also to those tax payers whose activities are related to export and production of goods (at least 10% of total sales), which are subject to sanctions, or supply of raw materials to the above-mentioned companies, if the supply or service contracts are terminated subject to sanctions or the purchase (supply) price of a good or service is reduced. 
 
The government decision also provides for specific tasks for ministries in order to start applying the incentives in support to embargo affected companies as soon as possible. 
 
According to the decision of the CoM, the Ministry of Economics (MoE) within two weeks will prepare amendments to regulations on guarantees to improve competitiveness of economic operators and cooperative societies of agricultural services, providing for a grace period of up to one year for economic operators affected by Russia’s sanctions. Similarly, we call on the economic operators to use the already available support instruments of the Latvian
Guarantee Agency and Altum (more detailed information at: http://www.lga.lv/index.php?id=4 and http://www.hipo.lv/lv/attistibas_programmas/). 
 
According to the decision of the CoM, the MoE will make amendments to a number of EU funds support programs, providing additional funding to continue to support entering of Latvian entrepreneurs in foreign markets and implement the sales promotion activities for Latvian goods and services abroad by December 31, 2015. In addition, in the implementation of the support, the emphasis in will be on longer presence of industry experts in a target country (2-3 months) to encourage new contacts for sales of Latvian manufacturers’ products.

The Ministry of Finance, within two weeks, will have to prepare amendments to laws and regulations, envisaging the tax support measures.

The Ministry of Agriculture (MoA) will have to make amendments to the laws and regulations in order to provide the opportunity also for enterprises processing fishery and aquaculture products to receive support for loan guarantees and subsidies on loans. It is also planned to create more favourable conditions for economic operators working in the diary sector. The MoA within two weeks will have to prepare proposals for the funding necessary to support the dairy sector.

The government decided that, in case of necessity, the Ministry of Agriculture, in cooperation with other Member States of the European Union, will have to apply to the European Commission with a request to decide on excess of national milk quota levies, as well as to temporarily reinstate the export refunds, to start intervention purchasing and the private storage aid.

In order to mitigate the impact of sanctions on the road carrier sector, the Ministry of Transport will have to coordinate with the European Commission the amendments to the Law On the Vehicle Operation Tax and Company Car Tax to abolish the vehicle operating tax for vehicles exceeding 3500 kg.

It is planned that the Minister for Economics will inform the Cabinet of Ministers once a week on the current situation and the performance of tasks.

The recording of the press conference of Prime Minister L.Straujuma and Minister for Economics V.Dombrovskis is available on the website of the Cabinet of Ministers: http://www.mk.gov.lv/lv/aktuali/tiesraides/videoarhivs/.

Elita Rubesa- Voravko
Public Relations Department 
Ministry of Economics
Phone: +371 67013193
E-mail: elita.rubesa @em.gov.lv; prese@em.gov.lv
Web: www.em.gov.lv

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