Additional support to companies in Rezekne and Latgale special economic zones
On May 14, 2020, amendments to the Law on Taxation in Free Ports and Special Economic Zones were adopted at the Saeima meeting of the Republic of Latvia. Amendments to the Law provide additional support opportunities for the commercial companies of the Special Economic Zone of Rezekne and Latgale.
Amendments to the Law provide that undertakings which have acquired the status of a commercial company of the Rezekne Special Economic Zone may receive aid not only for initial long-term investments but also for the expected wage costs. The estimated cost of wages is the costs incurred as a result of initial investments for newly created jobs. These include the gross wage and employers' national social insurance contributions and are calculated for a period of two years. It is important to mention that the newly established workplace must be provided with a worker whose declared residence is in Latgale planning region. In addition, the newly created workplace must be maintained for at least five years for a large commercial company, but for a small or medium-sized commercial company for at least three years.
More than the significance of the amendments to the Law is explained by Sandra Ežmala, manager of the Special Economic Zone of Rezekne: “Extension of the aid to Rezekne SEZ and Latgale SEZ, with additional support for the creation of new jobs, is important for the development of a commercial environment for the development of the environment in Latgale region. We hope that this support will help to attract new businesses and investment projects to the region, which will create well-paid jobs, competitive products and services with high added value."
At present, the law stipulates that the aid for the expected wage costs may be received by undertakings by 31 December 2024, while the aid for initial investments is applied until 31 December 2035.
Regarding the special economic zone of Rezekne:
Rezekne SEZ was established on 23 April 1997 on the basis of the “Rēzekne Special Economic Zone Act”. This Law prescribes the procedures for the administration and utilisation of Rezekne SEZ, requirements for the performance of commercial activities and investments, as well as the functions and tasks of the Rēzekne SEZ administration.
The Law on the Application of Taxes in Free Ports and Special Economic Zones is laid down in the Law on the Application of Tax Facilities in Free Ports and Special Economic Zones. The companies registered in Rezekne SEZ may receive both direct tax discounts (real estate tax, corporate tax on dividends) and indirect tax relief, forming free zones in THE territory OF THE RSEZ, as well as making investments. Tax relief for Rezekne SEZ will be applicable until 31 December 2035.
The total area of Rezekne SEZ is 1155 ha, which includes the administrative territory of the municipality of Rēzekne and Rēzekne. A commercial company of Rezekne SEZ operates 20 commercial companies in 2020.
Additional information: Rēzekne Special Economic Zone Administration
Phone: (+371) 2863 3550; e-mail address pr@rsez.lv; website: www.rsez.lv
Prepared by: Daiga Uanne,
Rēzekne SEZ Management External Relations Organizer
Phone: (+371) 2863 3550; e-mail address pr@rsez.lv; website: www.rsez.lv