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COVID-19 in the Baltics: What State Measures are Available or are Being Planned for Your Company in Each of the Baltic States? 

by Mart Blöndal

Published: April, 2020

Submission: April, 2020

 



On the 17thof March, we gave an overview on the options available for the governments in Estonia, Latvia and Lithuania to support companies being harmed by the COVID-19 crisis. At that time we noted that companies should work with the government in order to ensure that the measures taken truly help the companies survive the crisis.


As of the 2ndof April, the Baltic governments have adopted a number of measures to help companies, the most important of which are outlined in the overview table below.


 

Estonia


Latvia


Lithuania


Employment support


(Implemented) State compensates up to 70% of the salaries for employees effected by COVID-19, up to 1000 eur.


(Implemented) State compensates up to 75% of the salaries for workers’ idle time in companies affected by COVID-19, up to 700eur.


Employer no longer required to contribute to sick pay, if employee afflicted by COVID-19 or under quarantine.


(Pending) State compensation for idle time for micro enterprises, self-employed persons and authors.


 


(Implemented) State compensates (a) 70% of remuneration of the employee, but no more than EUR 910 gross, or (b) 90%, but no more than EUR 607 gross


 


Sector specific liquidity support


(Pending) Agricultural companies can apply for a guarantee (up to 50 million eur), a working capital loan (up to 100 million eur) or land capital loan (up to 50 million eur).


Not available.


(Implemented) State guarantees for factoring. Guaranteed 80%, up to EUR 1 875 000.


 


(Implemented) Favourable conditions for companies executing projects financed from EU structural funds: (1) possibility to receive an advance even if not provided under project agreement; (2) maximum advance increased to 50%; (3) advance up to 10000 EUR does not require guarantee; (4) shorter payment terms


Liquidity support (guarantees on liabilities)


(Implemented) The government entity “KredEx” will provide a guarantee to alleviate repayment schedules of existing liabilities and give guarantees for new loans. The Guarantee amount is up to 5 million eur. The guarantee will cover between 35% to 90% of the loan amount.


(Implemented) The government entity “Attistibas finanšu institucija Altum” (ALTUM) will provide guarantees to alleviate repayment schedules of existing investment loans, working capital facilities and financial leasing, as well as for new working capital facilities. The guarantee amount is up to 5 million eur, but not more than 25% of turnover in 2019.


(Implemented) Compensation of 100% of interest on loans which were suspended under so-called "loan holiday" clauses after 16 March.


 


(Implemented) State guarantees for loans or leasing. Guaranteed 80%. Covers new or existing loans. Covers both liquidity and investment loans.


 


Liquidity support (loans)


(Implemented) KredEx will provide working capital and investment loans for up to 5 million eur, with an interest rate starting from 4%.


(Implemented) ALTUM will provide working capital loans for up to 1 million eur for economically viable entities, but not more than 25% of turnover in 2019, twice the payroll in 2019, or liquidity needed in the next 12 months. Fixed interest rates from 1.9% to 2.9%.


(Implemented) Businesses experiencing liquidity problems will be eligible to receive loans. Eligible businesses are those which experienced a 60 percent or larger contraction of turnover due to the COVID-19 outbreak. Applicants must not have been under financial difficulty prior to the outbreak. The loan limit is determined by the company’s needs for one month and is paid out monthly. Return of loans starts at 3 months past the end of the quarantine.


Liquidity support (VAT refund)


Not separate legislation available.


Regular refund of overpaid VAT within 30 days since VAT return deadline (1 April – 31 December 2020).


Not separate legislation available.


Liquidity support (Tax relief)


(Implemented) Interest will not be claimed for late payment of tax obligations for the period between 1st of March until the end of the emergency situation.


(Implemented) Taxpayers affected by COVID are allowed to defer or split due tax payments for a period of up to three years with no late payment penalties.


(Implemented) Suspension of recovery of tax and social security payments from 16 March until the discontinuation of the national emergency. Further, the Tax Authority, the Social Security Authorities and the Customs Authorities will not apply tax recovery measures, including late payment interest for taxpayers who have experienced adverse effects from COVID-19.


Liquidity support (Tax relief)


 


 


(Pending) The rate of the late payment of interest will be reduced from 0.06% per day to 0.03% per day.


(Implemented) Local municipalities have the right to prolong the term for payment of real estate tax, provided that the deadline is set within year 2020.


(Implemented) Taxpayers are able to enter into a tax payment postponement agreements for interest free postponement of taxes.


Liquidity support (debt enforcement)


Not available.


(Implemented) Grace period in debt enforcement extended to 60 days. Moratorium on new insolvency petitions, if filed by a creditor, until 1 September 2020.


Not available.


Reduction of rent and utility bills


Not available.


(Implemented) State and municipal institutions, as well as entities controlled by public persons, where they are lessors, are allowed to relieve companies from their rent payment obligations or reduce the payable amounts.


 


(Implemented) Possibility to agree upon extended payment schedule for communal services, such as: electricity, gas, heating, water, provided that the company paying was negatively affected by the quarantine (determined individually).


 


 


Sector specific support


Not available.


(Implemented) In case shortage of medicines can be established, wholesalers are allowed to distribute products that were initially meant to be distributed in other EU countries (without the necessary packaging requirements), provided that the State Agency of Medicines is informed.


Not available.


 


 

Estonia


Latvia


Lithuania


Employment support


(Implemented) State compensates up to 70% of the salaries for employees effected by COVID-19, up to 1000 eur.


(Implemented) State compensates up to 75% of the salaries for workers’ idle time in companies affected by COVID-19, up to 700eur.


Employer no longer required to contribute to sick pay, if employee afflicted by COVID-19 or under quarantine.


(Pending) State compensation for idle time for micro enterprises, self-employed persons and authors.


 


(Implemented) State compensates (a) 70% of remuneration of the employee, but no more than EUR 910 gross, or (b) 90%, but no more than EUR 607 gross


 


Sector specific liquidity support


(Pending) Agricultural companies can apply for a guarantee (up to 50 million eur), a working capital loan (up to 100 million eur) or land capital loan (up to 50 million eur).


Not available.


(Implemented) State guarantees for factoring. Guaranteed 80%, up to EUR 1 875 000.


 


(Implemented) Favourable conditions for companies executing projects financed from EU structural funds: (1) possibility to receive an advance even if not provided under project agreement; (2) maximum advance increased to 50%; (3) advance up to 10000 EUR does not require guarantee; (4) shorter payment terms


Liquidity support (guarantees on liabilities)


(Implemented) The government entity “KredEx” will provide a guarantee to alleviate repayment schedules of existing liabilities and give guarantees for new loans. The Guarantee amount is up to 5 million eur. The guarantee will cover between 35% to 90% of the loan amount.


(Implemented) The government entity “Attistibas finanšu institucija Altum” (ALTUM) will provide guarantees to alleviate repayment schedules of existing investment loans, working capital facilities and financial leasing, as well as for new working capital facilities. The guarantee amount is up to 5 million eur, but not more than 25% of turnover in 2019.


(Implemented) Compensation of 100% of interest on loans which were suspended under so-called "loan holiday" clauses after 16 March.


 


(Implemented) State guarantees for loans or leasing. Guaranteed 80%. Covers new or existing loans. Covers both liquidity and investment loans.


 


Liquidity support (loans)


(Implemented) KredEx will provide working capital and investment loans for up to 5 million eur, with an interest rate starting from 4%.


(Implemented) ALTUM will provide working capital loans for up to 1 million eur for economically viable entities, but not more than 25% of turnover in 2019, twice the payroll in 2019, or liquidity needed in the next 12 months. Fixed interest rates from 1.9% to 2.9%.


(Implemented) Businesses experiencing liquidity problems will be eligible to receive loans. Eligible businesses are those which experienced a 60 percent or larger contraction of turnover due to the COVID-19 outbreak. Applicants must not have been under financial difficulty prior to the outbreak. The loan limit is determined by the company’s needs for one month and is paid out monthly. Return of loans starts at 3 months past the end of the quarantine.


Liquidity support (VAT refund)


Not separate legislation available.


Regular refund of overpaid VAT within 30 days since VAT return deadline (1 April – 31 December 2020).


Not separate legislation available.


Liquidity support (Tax relief)


(Implemented) Interest will not be claimed for late payment of tax obligations for the period between 1st of March until the end of the emergency situation.


(Implemented) Taxpayers affected by COVID are allowed to defer or split due tax payments for a period of up to three years with no late payment penalties.


(Implemented) Suspension of recovery of tax and social security payments from 16 March until the discontinuation of the national emergency. Further, the Tax Authority, the Social Security Authorities and the Customs Authorities will not apply tax recovery measures, including late payment interest for taxpayers who have experienced adverse effects from COVID-19.


Liquidity support (Tax relief)


 


 


(Pending) The rate of the late payment of interest will be reduced from 0.06% per day to 0.03% per day.


(Implemented) Local municipalities have the right to prolong the term for payment of real estate tax, provided that the deadline is set within year 2020.


(Implemented) Taxpayers are able to enter into a tax payment postponement agreements for interest free postponement of taxes.


Liquidity support (debt enforcement)


Not available.


(Implemented) Grace period in debt enforcement extended to 60 days. Moratorium on new insolvency petitions, if filed by a creditor, until 1 September 2020.


Not available.


Reduction of rent and utility bills


Not available.


(Implemented) State and municipal institutions, as well as entities controlled by public persons, where they are lessors, are allowed to relieve companies from their rent payment obligations or reduce the payable amounts.


 


(Implemented) Possibility to agree upon extended payment schedule for communal services, such as: electricity, gas, heating, water, provided that the company paying was negatively affected by the quarantine (determined individually).


 


 


Sector specific support


Not available.


(Implemented) In case shortage of medicines can be established, wholesalers are allowed to distribute products that were initially meant to be distributed in other EU countries (without the necessary packaging requirements), provided that the State Agency of Medicines is informed.


Not available.


 


New measures are being introduced daily, and the above table only covers the most important support instruments currently (as of 02.04.2020) implemented or proposed. It is only intended to give a general comparison across the Baltic countries. COBALT will update the table above as necessary to also cover further major measures.


In order for your company to benefit from the above, you will likely need to liaise with the appropriate national authorities.


COBALT is a closely integrated alliance of top-tier law offices across the Baltics.


 


You may contact our Covid-19 Response Team in each of the Baltic Capitals:


Team Estonia:[email protected]


Team Latvia:[email protected]


Team Lithuania:[email protected]


 


 

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