Balticmagazine, Riga (2026)

11/12/2017

As part of the “Tax Reform” from January 1, 2018, changes in legislation come into effect, including the Law on the Tax on Microenterprises. In fact, two basic tax rates are introduced – 15% and 20%, as well as an additional rate. The decision on whether to retain business as a microenterprise should be taken before December 15.

At the moment, in case of an annual turnover of up to 7,000 euros, the tax rate is 12%, and drom 7,001 to 100,000 euros – 15%.

The tax on microenterprises is a single tax payment, which includes the following taxes:

compulsory state social insurance contributions, personal income tax, state duty for business risk for microenterprise employees;

Income tax from enterprises, if the micro-enterprise meets the criteria of the enterprise income tax payer;

Income tax from the people of the microenterprise owner for a part of the income of the microenterprise’s economic activities.

If the microenterprise did not have a turnover during the taxation period (in the calendar year) or the accrued tax on microenterprises does not exceed 50 euros, then a tax of 50 euros is transferred to the budget.

Now the maximum permissible turnover of microenterprises should not exceed 100 000 euros, and from the year of 2018 – 40 000 euros.

Starting from January 1, 2018, the 15% rate will be applied only for turnover up to 40,000 euros, then an increased rate of 20% comes into effect.

The transitional rules of the law provide for special conditions for those taxpayers whose turnover in 2018 or 2019 does not exceed 52,000 euros. In 2018, these micro-enterprise tax payers are entitled not to apply a rate of 20% to exceeding the allowable turnover, that is, amounts exceeding 40,000 euros if their turnover in 2017 or turnover in 2016 exceeded 40,000 euros. In 2019, these taxpayers can use this tax on microenterprises, which turnover in 2017 did not exceed 40,000 euros.

From next year the employee will be able to work only on one microenterprise. Therefore, from January 1, 2018, the SRS will no longer be registered as an employee in a microenterprise, if it is employed in another similar enterprise.

But the law does not stipulate compulsory dismissal. For those persons who work at several microenterprises as of December 31, 2017, the mentioned restriction will be introduced only from January 1, 2019.

The State Revenue Service (SRS) promises to inform all owners of the Electronic Declaration System (EDS) by February 1, 2018 about employees who work for other business people.

Since 2019, an additional tax is imposed on “extra” workers, that is, those who work simultaneously at several microenterprises.

If the employee continues to work simultaneously in several microenterprises at the same time in 2019, then two percentage points for each such employee are added to the tax calculation, and from the year 2020 such companies will lose the status of microenterprises.

Prior to this date, taxpayers can apply to the SRS to refuse or apply for a taxpayer status on microenterprises.

Current taxpayers from microenterprises, who want to keep this status next year, do not need to file an application with the SRS.

The tax service calls for a decision, assessing the changes in the legislation, which will come into force next year.

Applications can be filled in a free form and sent to the SRS by mail or submitted in the electronic declaration system of the SRS.

11/12/2017

The owner of the brand Laima – Orkla Confectionery & Snacks Latvija – through the intermediation of Colliers International, has concluded a deal to purchase a plot of land in Adazi for the construction of a new Laima factory.

The contract specifies not only the purchase of a land plot, but also about the building of roads and making optical internet.

Before the conclusion of the transaction, the site was thoroughly investigated for contamination and soil quality.

The results of the research showed that the land is not contaminated and safe for production.

Also, a construction project for a new factory was developed, which was submitted for approval to the Adazi Local Council.

Construction is scheduled to begin in the spring of 2018 and finish in the first quarter of 2019.

Moving the factory and starting production in new premises are planned for the end of 2019.

The total investment in the construction of the new factory and the further development of Orkla Confectionery & Snacks Latvija will amount to 20 million euros in three years.

11/12/2017

The Ministry of Economy, which presented the concept of a new law “On the hiring of residential premises” this summer, believes that changes in legislation will contribute to the creation of a civilized market. And they also will help solve the problem of obsolescence of housing stock and settle long arguments between owners and lodgers.

The Ministry offered several tools for supporting the housing affordability program. One option is long-term loans for the construction of apartment houses, an increase in the maximum threshold in the budget of local governments to pay for the restoration and restoration of housing stock.

They also consider the possibilities of giving a 10% grant for the construction of apartment houses for rent, or a tax rebate on real estate in case of restoring a housing stock. The Deputy State Secretary of the Ministry Edmunds Valantis said the following things about that.

Today in Latvia construction of profitable houses is practically not conducted. Most of the housing is for sale. The new law will facilitate the development of the hiring market, there will be a more effective dispute resolution mechanism, and this will allow investors to invest in this segment of the market.

Creation of a civilized market will also be the ability to curb the outflow of residents both from regions to Riga and from Latvia as a whole. The expert pointed to Valmiera as an excellent example.

Enterprises that pay good salaries are interested in attracting specialists. These professionals need somewhere to live. Therefore, in Valmiera, well-appointed apartments are offered for rent for 5.2 euros per square meter.

Many countries of Europe also took this path. They contribute to the development of the rental market for housing, as many people prefer to live in rented apartments, rather than buying real estate.

For example, in Scandinavia a large market for hiring apartments has been created. The system works through a special fund that the state can support. Austria and the Netherlands are also active in this field. Here the state through various motivating mechanisms supports the hiring market.

Edmunds Valantis recognizes that there is no common opinion at the state level regarding to what “affordable housing” is. “Studying the world experience and research, we see that people should not spend more than 25-30% of their income on housing, but for example, in Riga, rental rates are about 6-7 euro per square meter.” It turns out that the salary should be much larger, than average people get today.

We have a very small share of those people who have enough income so that this proportion of expenses can be saved. This is a challenge. “We see that due to low solvency the housing fund is developing very slowly, ” the ministry spokesperson explained, adding that the availability of housing helps attract work force.

At the same time, it is known that in the period from 2010 to 2016 the most active construction was conducted in the Riga region. Speaking of the reasons, Valantis noted that many people wanted to live in family houses, and not in a high-rise building.

This is the difference between the inhabitants of Latvia and their neighbors. Their work is often nearby – new jobs are being created today not only in Riga, but also in Marupe, Salaspils, Kekava, where new production facilities are opening. We should note that in Europe the average share of the rental market for housing is 25-30%.

Officials admit that the share of the black market is really great in Latvia. “In fact, we cannot calculate how much housing is rented, and it is likely that this segment of the market is already considerably larger that we think,” added Valantis.

11/12/2017

The general contractor of the project is the company Merks. Construction work is planned to be completed in the spring of 2019. The Akropole shopping center will be located at the address 275b Maskavas Street.

The area of the premises of the Akropole shopping center will be 98,000 square meters, of which 9,000 will be office space in a nine-story office building. Akropole will house a cinema, ice rink, restaurants and a bowling alley.

The shopping center will have approximately 1,500 new jobs and parking for at least 2,500 people. Around the center, 700 new coniferous, deciduous trees and shrubs will be planted, as well as several hundred other plants.

For maximum convenience of visitors, a new flyover will be built from the South Bridge, as well as other improvements in the traffic flow. For example, it is planned to expand Salaspils Street, to create new access roads from the streets of Slavu and Salaspils and to improve public transport access to the shopping center.

The architectural project Akropole has been developed by the architectural bureau Sarma & Norde arhitekti, its construction supervision is carried out by the firm Būvuzraugi LV.

12/10/2017

Approximately 30% of Latvian young people want to earn 801 – 1200 euros a month, according to a poll conducted by the bank SEB. The survey was conducted in August and involved 1195 people aged from 18 to 25 years.

13% of respondents believe that they must earn more than 1,200 euros per month. The salary from 501 to 800 euros per month is considered suitable by 37% of young people, and 17% are ready to work for 301 – 500 euros per month.

Plans for young people are quite ambitious. Almost 40% of respondents dream of earning at least 1500 euros (after tax paying) per month in five years.

12/10/2017

Until the end of February 2018, the ruling coalition intends to finally determine the conditions for the transition of the general education system to the Latvian language. This must be done so that the parties will not be able to use this discussion in their favor during their election campaigns. Prime Minister Maris Kuchinskis (The Union of Greens and Peasants) reported that news on Latvian TV in the program “Morning Panorama”.

According to Kuchinskis’s party members “there is no doubt that education in Latvia should be received in the state language”, because only people with a good knowledge of the language will be able to compete in the labor market. Also, the proposal of VL-TB / DNNL on amendments to the law on education was discussed, and it offered to introduce a norm to conduct classes in state and municipal schools only in the Latvian language.

Also a concept was provided by Karlis Shadurskis, who stated that from 2020/2021 academic year all general subjects in secondary schools were planned to be taught only in Latvian. Within a month the Minister of Education and Science Karlis Shadurskis should prepare an information message and potential amendments to the laws that will be discussed.

Kuchinskis recalled that the government’s declaration envisaged the preparation of principles for the gradual transfer of education into the state language. The co-chairman of VL-TB / DNNL, Raivis Dzintars, said that the two proposals did not contradict each other, but Shadurskis was invited to the meeting of the National Unity faction on October 25.

The party should be convinced that its goal will be fixed by the law, then VL-TB / DNNL will not submit its bill. At the same time R.Dzintars added that if the idea of education in the Latvian language was not clearly and unambiguously included in the concept of the Ministry of Education and Science (MES), VL-TB / DNNL would come up with its legislative initiative. The politician believed that the transition had to happen at all levels, that is, not only in secondary schools.

12/10/2017

The Latvian software testing company TestDevLab developed the Test48.com solution, which became the finalist of the contest for the 2017 The European Software Testing Awards in the category Best Mobile Testing Project. As the head of the department of public relations of the enterprise Kristap Skutelis said, reaching the final meant that experts rated Test48.com as a useful and well-developed product. Within 48 hours Test48.com allows in simple and understandable form to receive a professionally issued report on the errors found in applications, which helps their developers to create better products.

Test48.com’s solution is available to customers this year, but many of accelerators of new businesses are already included in the number of its customers in Latvia and abroad. TestDevLab clients include Skype, Microsoft, Twilio, Libon, Latvenergo, several Latvian banks and many other enterprises.

The enterprise TestDevLab was established in November 2011 and belongs in equal shares to Andrey Frishfelds and Erwin Greenfelds. In 2016, its turnover amounted to 3.09 million euros – it’s by 31.3% more than in 2015, but the profit decreased by 39.4% – to 441,137 thousand euros.

12/10/2017

Last week a change of owners and board members took place in the company Stenders, one of the most popular cosmetic companies in Latvia. Stenders was founded in 200, the company initially engaged in the production of cosmetic products, bath balls, soaps, etc. The turnover of the company in the fiscal year from April 1, 2015 to March 31, 2016 amounted to 8.028 million euros, but its losses – 633 thousand euros.

The new owner of the company is now CICC Ehealthcare Investment Fund, registered in the Cayman Islands. All the former owners of the company are exempted from their positions. New members of the board are Chinese citizens – Xia Wu, who became chairman of the board, Gang Yang and Yang Zhao.

As the former board member explained, the deal was aimed at making a leap in development, as well as for entering the global market because it was impossible to do that on your own.

06/10/2017

1.935 million euros were asked by the Ministry of Transportation for unforeseen expenses related to the repair work of roads and railways damaged during the floods in August this year.

Strong August rains washed away and damaged much of the roads. Damaged roads were both the main and regional importance. This led to an emergency situation, and the liquidation of the consequences of the flooding required 1.345 million euros.

Also, intensive rains on August 23 and 24, resulted in damage of some sections of the railway border of Latvia-Karsava-Rezekne, where erosions and landslides of the railroad track took place.

06/10/2017

Over the past 8 months in Latvia, the output of industrial products has significantly increased. In comparison with the indicators of the previous year, this figure increased by 9.4% according to the calendar calibrated data.

In the manufacturing industry, this increase was 8.5%, in the development of quarries and the extractive industry it was 18.8%, and in the field of gas and electricity – 12%. Production of wood and wooden products increased by 10.9%, food products – by 6.5%, finished metal products (except machines and devices) – by 34.9%.

In August 2017, as compared to August 2016, the turnover of manufacturing industry in accordance with the calendared data increased in actual prices by 16.1%, in the local market included – by 14.5%, in the export market – by 18.1% ( if to include the data of the euro area – by 29.6%, but outside it – by 9.8%).

In August 2017, compared with July, the turnover of manufacturing according to seasonally adjusted data increased by 3.5%. In the local market the growth was 2.1%, in exports – 5.2% (in the euro zone – 7%, outside it – 8.5%).

06/10/2017

The majority of Latvian residents looking for jobs and surveyed on the portal, namely 77%, consider that the amount of wages must necessarily be indicated in the text of the advertisement containing a proposal for work.

The number of man and women among respondents who considered the indication of the wages mandatory was equal.

CV Market also noted that public opinion on this issue had changed somewhat. The year before only 89% of residents considered indication of the amount of wages mandatory and 11% thought this aspect to be optional.

According to the representative of the CV Market, this topic was painful not only for potential employees but also for employers, since most companies did not have an official system of payment and the employer could not be 100% sure what salary would be paid the new employee. In many sectors, the total amount consists of several components – the basic salary and the percentage of sales.

However, if the salary was always indicated in the job offer announcement, only those people who liked this salary would come to the interview and employers would not have to spend their time on those who refused the offer after learning about the amount of payment too low for them. Unfortunately, at present there are many contenders of such kind.

The survey conducted from August 18 to September 7, involved 1,271 people at age from 20 to 55.

28/09/2017

Many years of experience and the results of the survey show that the inhabitants of Latvia lack not only knowledge in the legal field, but also an understanding of the fact who can help them.

The most common mistakes that people make are to use samples of contracts downloaded from the Internet that are not appropriate for a particular situation, as well as attempts to rely on the experience of friends or relatives.

Their desire to save on legal consultations is clear, but real estate transactions are just where you can very easily make a fatal mistake. After all, it is not the sphere with which we all come across every day and we do not have so much experience and knowledge. It is in contracts, for unfamiliar terms and cunning speech turns, that trickery tricks are often hidden.

Each situation needs its contract

Very often people use contract templates from the Internet to make deals. Therefore, quite often the content of the contract does not correspond to what the parties have agreed upon. The important terms of the contract are not specified here, the object of the transaction itself is erroneously indicated, the order of settlements is not specified, as well as specific obligations that the parties actually took upon themselves. ”

Terminological clarity of the contract

Residents do not want, cannot read carefully the text or do not consider it necessary to understand the content of the document. The ability to read the documentation of various transactions is poorly developed even for legally educated people who rely on the professionalism of the developers of documents and decide not to delve into the voluminous legal text. Sometimes, re-reading the draft agreement, they do not even notice mistakes in their personal data, account number, interest calculation, transaction procedure and other important information, “says Sandra Stipniece.

However, just reading the documents and checking your data is also not enough – you need to delve into the text, understand the terminology and terms of the contract. “The legal language is specific and contains complex terms, so it is especially important to involve a professional who will help not only to identify shortcomings in the document, but also to remove the pitfalls possible during the transaction. So, for example, legal documents often confuse movable property with immovable, pledge with an advance, the right of simple use with the apartment right, as well as other terms, ” says a sworn notary.

Such surprises as “a cat in a poke”

An inadequate attitude towards the legal side of the transaction can sometimes lead, for example, to the fact that, a person bought not the apartment, but the right to lease it. Also the new owners can learn about the various bans and burdens on the newly acquired land, when the transaction has already taken place. It may happen that together with the newly purchased apartment they can inherit tenants who have a lease of the premises that is still valid for several years, and the new owner must respect it.

Before signing the contract, the sworn notary Sandra Stipniece recommends:

Consult a notary;

Carefully read any document relevant to the transaction;

Feel free to ask questions and not rely solely on human integrity;

In writing, record everything agreed upon by the parties;

Do not use samples of contracts available on the Internet, without adapting them to a specific situation;

To provide for the right to derogate from the agreement unilaterally, if the planned consequences or result do not occur;

Use non-cash settlements. It is recommended to use the opportunity to transfer money for purchase to the notary;

Listen to intuition and not engage in a transaction in which every nuance is not clear and understandable;

Check the information included in the contract – personal data, property addresses, cadastral number, etc.

Check the information in the relevant registers – for example, compare the data of the State Land Service with the information in the Land Register;

Evaluate the advantages and reliability of the notarial deed in comparison with the contract prepared privately;

Never rely on the experience of neighbors or acquaintances – each transaction is unique;

Do not sign the contract if any term or condition is not understood and explained

Balticmagazine

11/12/2017

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