Amendments to the Law "On Taxation in Free Ports and Special Economic Zones"

 At the beginning of 2018, according to the business support regulation, the conditions for providing aid for initial investment are changing, therefore, amendments to the law need to be made so that Freeport and special economic zone administrations can conclude contracts with the capital companies for making investments and applying tax incentives.

In order to provide support to capital companies of the Freeport of Riga and Ventspils Freeport, as well as Liepaja, Rezekne and Latgale Special Economic Zones (SEZs), when concluding investment agreements, the provisions of the Law "On Taxation in Free Ports and Special Economic Zones" need to be aligned with the amended regulatory framework for supporting commercial activities in the initial stages. investments, that is, by Commission regulations. Amendments to the law proclaimed by the State Secretaries on November 30 must still be approved by the government and adopted by the Saeima.

After making amendments to the law, special economic zones and free port administrations will be able to continue to attract new investments, applying the exemptions from corporate income tax and real estate tax as provided for in the Law "On Taxation in Freeport and Special Economic Zones".

The amendments to the law provide for the further application of the special tax regime in the territories of Riga and Ventspils Freeport and Rezekne, Liepaja and Latgale SEZs. In order to ensure the continuity of business support measures, amendments to the draft law should be made as soon as possible. The bill also provides for clarification of the requirements for granting business support. 

The draft law will affect the capital companies that carry out or plan to carry out commercial activities in the territories of the Freeport of Riga and Ventspils Freeport and Liepaja, Rezekne and Latgale SEZs, while also affecting the institutions involved in decision-making and monitoring, ie, special economic zones and free port administrations.

The project will have a positive impact on employment in the regions, taking into account possibilities to start a new business or expand the existing freeport of Riga and Ventspils and Liepaja, Rezekne and Latgale SEZ territories.

Taking into account the requirements set out in Commission Regulation No 2017/1084, the administrative burden will not increase, but the requirements for submission of documents to businesses and the granting of operating aid granted by the administrations of Riga and Ventspils Freeport and Liepaja, Rezekne and Latgale SEZ territories are specified. 

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