Businesses can apply for Covid-19 crisis support for June until 15 July

The Ministry of Economics reminds businesses, self-employed persons and patent-tax payers that they can apply for Covid-19 crisis support for June until 15 July of this year. Businesses can apply for the support by submitting an application through the State Revenue Service (SRS) Electronic Declaration System (EDS).

It is important to note that businesses that have resumed operations can also apply for the support if, due to an ongoing restriction, they are experiencing the decline in revenue specified in the Cabinet regulations, and some of their employees are idle or employed part-time. June is the last month for which employees who are idle can receive downtime support, partially employed employees can receive a wage subsidy, and businesses can receive a grant for working capital.

For downtime support applications may be submitted by employers, self-employed persons and patent-tax payers whose revenue from economic activity in June of this year:

• has decreased by at least 20 %, compared with the average monthly revenue in August, September and October 2020 during which the company was actually operating;
• or has decreased by at least 30 %, compared with the revenue in the corresponding month of 2019.

It is important to note that the amount of Covid-19 crisis support received by companies affected by the crisis to ensure the flow of working capital (the grant) is not taken into account when calculating the decline in revenue.

The criteria and procedures for granting support for employees, self-employed persons and patent-tax payers during a period of downtime to compensate their remuneration are laid down in Cabinet Regulation No. 709 of 24 November 2020, "Regulations Regarding Support for Taxpayers for Continuing Their Operations During the Crisis Caused by Covid-19."

Employers can apply for a wage subsidy for partially employed employees if their revenue from economic activity in June of this year has:

• decreased by at least 20%, compared with the average revenue in August, September and October 2020, when the company was actually operating;
• or decreased by at least 30 %, compared with the revenue in the corresponding month of 2019.

The support is granted to compensate the remuneration of employees working part-time. The support is paid to employees within five working days after the decision to grant the support has been adopted. 

It is important to note that the wage subsidy and downtime support received by an employee from all employers combined may not exceed EUR 1,000 per calendar month. An employee for the relevant period with one employer may not receive a wage subsidy and downtime support simultaneously.

The conditions for granting the support are set out in Cabinet Regulation No. 675 of 10 November 2020, "Regulations Regarding the Provision of Support to Taxpayers for Continuing Their Operations During the Crisis Situation Caused by Covid-19."

In turn, the working-capital grant for June of this year is granted to companies most severely affected by the Covid-19 crisis to compensate for the decline in the flow of working capital.

At present, companies whose decline in turnover in June meets one of the following criteria can apply for the working-capital grant:

• turnover has decreased by at least 20%, compared with the average turnover in August, September and October 2020 combined, and turnover in the month of the support period has decreased by at least 30%, compared with turnover in the corresponding month of 2019 or 2020;
• the company was registered with the State Revenue Service as a taxpayer after 1 January 2020 and its turnover in the month of the support period has decreased by at least 20%, compared with the average turnover in August, September and October 2020 combined;
• the company commenced economic activity after 1 January 2019 and its turnover in the month of the support period has decreased by at least 20%, compared with the average turnover in August, September and October 2020 combined;
• the company's turnover in the month of the support period has decreased by at least 30%, compared with the corresponding calendar month of 2019, and its turnover has exceeded 10% of the turnover in the corresponding calendar month of 2019 for at least three months since 1 April 2020.

An additional sectoral restriction has been established for receiving the support: 54 sectors have been identified whose businesses have no longer been eligible for the working-capital grant since May of this year. These are sectors whose operations were not previously subject to restrictions and which are currently conducting full-scale economic activity, for example, construction; personnel provision; ICT; electricity generation and trade; repair; office administrative services, etc.

It is important to recall that the amount of support received is not taken into account when calculating the decline in turnover. At the same time, it should be noted that this does not cancel the requirements to pay taxes and maintain accounting records.

The criteria and procedures for granting a grant to taxpayers affected by the Covid-19 crisis to ensure the flow of working capital are laid down in Cabinet Regulation No. 676 of 10 November 2020, "Regulations Regarding Support for Companies Affected by the Covid-19 Crisis to Ensure the Flow of Working Capital."

Since the spring of 2020, during the spread of Covid-19, the Ministry of Economics has developed more than 20 special support programmes to assist businesses and mitigate the consequences of Covid-19. Additional information about the support programmes currently available can be found on the Ministry of Economics website.

Author:

Public Relations Division

Ministry of Economics

em.gov.lv