Infographics: How Baltic governments vary in their aid for businesses regarding Covid-19 crisis
COVID-19 crisis in the Baltics
Varying is not only the number of Covid-19 sufferers in each Baltic country, but also the choices made by governments, which include both restrictions and incentives for companies to contain the spread of coronavirus. See summarized budget and tax solutions which were implemented by Latvia, Lithuania and Estonia.
Employee salary compensation during the downtime
In Latvia, employee salary compensation is expected to be paid for by May 20. The amount of the payment is 75% of the average monthly gross salary, but not exceeding 700 euros per calendar month. All businesses are eligible for the downtime payment if they have a turnover of at least 20% and meet the other basic criteria.
In Lithuania, the downtime payment is calculated at 90% of the average monthly gross wage, not exceeding 910.50 EUR, in the sectors directly affected by government decisions. In other sectors, the contribution is calculated at 70% of the average monthly gross wage, up to a minimum wage (607 EUR) in Lithuania. The downtime payment is time limited and is expected to be paid by mid-May.
In Estonia the downtime payment is calculated at 75% of the average monthly gross wage. The maximum downtime payment is 1000 EUR. In addition, the employer is obliged to pay the employee a salary of at least EUR 150. Downtime payments are expected to be paid through May 20. In Estonia the downtime allowance may not be less than EUR 584.
Extension of the tax payment term
There is a procedure in place in all three Baltic States for deferral of tax payments without penalty. In Latvia, the application of the special Covid-19 consequence rule allows deferral of current taxes for up to 3 years. The general procedure for deferral of tax payments for up to one year is also available. In Estonia, tax payments can be deferred for up to 18 months, while in Lithuania there is no maximum. The time period is agreed upon by the tax administration and each company individually.
Accelerated refund of VAT overpayments in Latvia
Unlike Lithuania and Estonia, Latvia has stipulated that the SRS is obliged to process requests for refund of overpaid VAT within an accelerated period and to refund overpaid VAT amounts within 30 days after the submission of the declaration. The action supports companies by improving their daily cash flow and without detaining their financial resources.
Tax reporting - a different approach
In Latvia, the deadline for submission of annual reports has been extended by three months. At the same time, deadlines for filing tax returns remain unchanged. In Estonia, the deadlines for reporting and declarations have not been changed, while in Lithuania the deadline for submission of CIT reports has been extended until March 30 and the deadline for declaration and payment of CIT has been extended until July 1.