The minimum wage is raised to the subsistence level

From 1 January 2018, the minimum wage is set at 9489 rubles. per month. Now it is 7800 rubles.

Since 2019, the minimum wage will be set at a rate of the federal subsistence level for the second quarter of the previous year, the project says. At the same time, the minimum wage for the next year should not be less than the current minimum.

Let's explain on an example, as under new rules will define MROT for 2020. The subsistence minimum for the II quarter of 2019 will be compared with the subsistence level for the second quarter of 2018. If the latter turns out to be lower, the minimum wage for 2020 will be equal to the subsistence level for the second quarter of 2019, if higher - the minimum wage for 2019.

Document: Draft Federal Law (http://regulation.gov.ru/projects/List/AdvancedSearch#npa=73033)

Public discussion ends on September 25, 2017

The Ministry of Finance again confirmed that the journal of the cashier-operator can not be kept Uniform primary forms for accounting trading operations using CCPs are not required.

The Office has already issued a similar explanation, which the Federal Tax Service sent to lower-level tax authorities.In a new letter, the Ministry of Finance, as an optional, called the form KM-4 "Journal of the cashier-operator".Recall that you still need to apply forms of documents for accounting for cash transactions.Document: Letter No. 03-01-15 / 54156 of the Ministry of Finance of the Russian Federation of August 23, 2017

The central bank lowered the key rate.

Since September 18, it will be 8.5% instead of 9% per annum. The rate did not change for three months. The next update of this indicator is expected on October 27.Document: Information of the Bank of Russia dated 15.09.2017

The Federal Tax Service is planning to update the form of the income tax declaration and the rules for filling iе

It is assumed that the changes will come into force in 2018.
The draft order of the FTS clarifies the procedure for completing the reporting: the indicator for line 150 of Appendix No. 4 to Sheet 02 should be specified taking into account the 50% restriction for the transfer of losses. This feature of the Federal Tax Service pointed out in January. Recall that from January 1, 2017, the amount of the transferred loss on income tax is temporarily limited.
Among the planned amendments to the declaration form are the following:
- New barcodes may appear on all pages;
- In section B of sheet 03 they want to enter the code of the type of income 3. This code will need to be used for income on bonds subject to income tax at the rate of 15%;
- sheet 08 is supposed to be supplemented with information about the transaction, on which the organization made an independent, symmetrical or reverse adjustment. It will be necessary to indicate, for example, the number and date of the contract, the name of the subject of the transaction.
Document: Draft Order of the Federal Tax Service of Russia (http://regulation.gov.ru/projects#npa=64562)
Public discussion and independent anti-corruption expertise are completed on October 11, 2017

More Than 5000 New Cars are Sold in Latvia This Year

The growth in sales of new cars in the four months of this year in Latvia was the fourth smallest in the EU, in Lithuania - one of the largest in the EU, according to the European Automobile Manufacturers' Association (ACEA), as reported by LETA.

In Lithuania, in January-April 2017, compared to the same period in 2016, car sales increased by 17.2% - up to 7778. In Latvia, car sales for the year increased by 2.5% - up to 5481, in Estonia by 7%, up to 8095.

In April 2017, compared to April 2016, car sales in Lithuania increased by 10.7% - up to 2254, in Latvia – decreased by 3.2%, to 1417, in Estonia – increased by 4.3%, to 2226.

In the EU as a whole, car sales increased by 4.7% - up to 5.333 million this year, including the decrease in April by 6.6% - to 1.191 million. In this year, the most popular are cars of the brand Volkswagen - 564.5 thousand are sold within four months, or by 1.2% less than the same period last year.

Russians will Open a Chocolate Factory in Jelgava

In September, a chocolate factory LLC “Chocolette Confectionary” may start its work in Jelgava, as the LETA Agency was informed by the enterprise.

Previously, it was planned that the factory will begin work in the spring. Employees have already been hired, but their quantity is not mentioned by the enterprise.

According to the data of “Firmas.lv”, the turnover of the company founded in 2016 amounted to 2333 euro, losses - 63,402 euro during the first year of operation.

The factory in Jelgava is planned to be open by the enterprise “Mediahold SBC Limited” registered in Cyprus, whose owners are Russians. Premises are leased from NP Properties and are located in the former RAF production area.

In 2017, the Ministry of Finance is Planning a Large-Scale War against Shadow Economy

In 2017, at least 20 actions will be implemented provided by the plan for combating shadow economy, said the Minister of Finance Dana Reizniece-Ozola.

“For example, we managed to find a solution for the grain industry this year, which brought the result. Earlier fraud was common in the industry related to value added tax (VAT). The data allow us judging that significantly reduced the amounts of returned VAT starting from July 1, compared with the previous period - more than for 10 million euro. With the support of the Saeima, over 20 actions of the plan will be implemented next year to combat shadow economy, which would reduce its share of the taxi business, construction, reduce the risk of VAT fraud. Also, more strictly will be regulated cash turnover”, said the Minister.

The control system of money laundering is improved, sanctions are upgraded for credit institutions for violations in this industry. Legal framework for the development of accounts register is established, said the Minister.

According to words of Reizniece-Ozola, during the preparation of the budget of 2017, the main directions were the fight against the shadow economy, more effective use of resources, limiting of tax optimization. “It was possible to prepare a balanced budget without significant changes in the major taxes. All tax changes are discussed and developed in close collaboration with partners of the government”, said the Minister.

Summary of the Year: Small Business Got Lost in the Maze of Micro-Enterprise Tax

The last year and a half the issue of micro-enterprise tax (MET) was like a hot potato - which hand take, be sure to be burned, writes “NRA”.

Preliminary explanations of politicians and officials has not clarified this issue, so part of the MET payers closed up their businesses or discharged employees already in the autumn. Shortly before Christmas changes were made again in the legislation, but they likely only kept from the wider business liquidation, but did not return the closed ones.

The Ministry of Finance emphasizes that the entry into force of the new regime as a whole for most micro-enterprises the burden of taxation compared with the previously planned (the MET rate decrease and the introduction of minimal social contributions) will decrease, because their turnover is below average. This will contribute to the progressivity of the MET system, because for businesses with small turnover the burden of taxation will be less, but those micro-enterprises, which are working seasonally, will not have to pay taxes at time when business activity is not actually carried out.

By early December, about 2.000 of MET taxpayers refused the status. Some of them are re-registered as a limited liability company, the part has not yet decided what taxation mode to work in and other already closed the business.

Swedish IKEA is Considering the Possibility of Opening a Store in Latvia

The world's largest furniture trader - the Swedish company IKEA is still considering the possibility of opening stores in Estonia and Latvia, told representative of the Icelandic company Felit to the LETA agency, the IKEA operator in Vilnius, Johannes Johannesson.

Felit is a franchise holder of IKEA in all three Baltic countries - Estonia, Latvia and Lithuania. The first IKEA store was opened in Vilnius in August of 2013, and its activity in the first two and a half years has been successful. Now the possibility to open IKEA stores on the Estonian and Latvian markets being considered, but decision has not been made yet”, he said.

Head of the Public Relations Department of the Latvian Investment and Development Agency (LIDA) Vineta Vilistere-Lace informed the LETA agency that the work on planning of the first IKEA store in Latvia, Stopinu Municipality is carried out, but she was unable to provide detailed information.

Andris Ozols, Director of the LIDA said in mid-September to the LTV TV-broadcast „Morning Panorama” that the first IKEA store in Latvia can be opened in about two years in Stopinu Municipality.

Free Conversations: LMT Cancels Roaming Charges across Europe

Starting from November 1, the company Latvijas Mobilais Telefons (LMT) cancels all restrictions on calls across Europe.

Starting from now, the company's customers will be able to communicate by the phone freely for a fixed monthly fee - call and send messages in all countries of the European Economic Area without any additional surcharges.

Therefore, any restrictions on communication not only in Latvia, but also in most European countries are cancelled for the customers.

“Latvia every year is more and more closely involved in European processes - both economically and socially. Inhabitants of Latvia are increasingly travelling across Europe, go for vacation, do business or study. Each of us has friends, relatives or acquaintances living in Europe. That is why LMT cancels the last restrictions on the issue of European communications”, said the Head of the company Yuris Binde.

According to his words, the company wants to prove once again that Latvia is the best place in the world for mobile services.

List of countries: Austria, Belgium, Bulgaria, Czech Republic, Denmark, France, Greece, Estonia, Ireland, Italy, Cyprus, Latvia, Great Britain, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Sweden, Spain, Hungary, Finland, Germany, Iceland, Liechtenstein and Norway.

The Competition Council will Verify the Transaction on Merging of DNB and Nordea Banks

The Competition Council (CC) received the news about the transaction, in the result of which the company Indy AB will get a decisive influence in the banks of DNB and Nordea in the Baltic States.

The CC shall take a decision to allow or prohibit merging or permit under certain conditions within a month. If the case requires additional analysis, decision time may be extended to four months. Companies that can provide their opinion on the impact of the proposed transaction on the market can contact the CC.

Consent of the CC for merging transactions is required, if the total turnover of the transaction parties in the previous fiscal year amounted to at least 30 million euro and turnover of at least two merging parties in Latvia was not less than 1.5 million euro.

The CC authorizes transactions, as a result of which there is no significant reduction in competition.

As reported, Nordea and DNB entered into agreement to merge activity in the three Baltic countries. It is planned that the new bank will be established in the second quarter of 2017. The new bank will be registered in Estonia with the branches in Latvia and Lithuania.

Businessmen Believe that Latvia should Consider Importation of Guest Workers

The country needs to think about the guest workers as solving the problem of labour shortages, said today businessmen at a press conference of SEB Bank according to survey results of financial directors of large companies.

According to the survey, the demand for labour force will continue to grow in all three countries. If last year 21% of financial directors in Latvia said that the demand will increase, but this year already 25% of them told it.

Director of Elko Grupa Sven Dinsdorf said that the issue of attracting of guest workers to a certain extent is taboo, but he encourages politicians to actively solve it.

More active must be the enterprises themselves, because the labour force soon will “physically” vanish. The procedure for attracting of guest workers is difficult, and the country should provide mechanism for this.

Vice-President of Food Union Normunds Stanevich also supported the idea of involving guest workers. “Latvian society is not ready, but we need to work with politicians to create a legislative framework, speaking with acquaintances, friends and colleagues, explaining the role of integration to enhance the overall well-being”, he said.

By 2020, the Harbours of Latvia may Lose All Cargos from Russia

All Russian cargos, which are currently handled at the harbours of the Baltic States, must be reoriented to the Russian harbours by 2020.

These tasks were discussed at a meeting chaired by the special representative of Russian President on environmental planning, ecology and transport issues Sergei Ivanov on September 28, as the sources familiar with the outcome of the meeting informed the Petroleum Information Agency (PIA).

According to one of them, it was mainly spoken about transhipment of dry cargo.

At the same time, another talker added that the Russian Railways was entrusted to develop the issue of economically attractive tariffs together with the oil companies.

Earlier, the president of Transneft Nikolay Tokarev said during a meeting with Russian President Vladimir Putin that Russia continues to reorient deliveries of petroleum products for export through the harbours of the Baltic States in favour of its own facilities. “In accordance with the request of the government we reorient traffic flows from the Baltic harbours: Ventspils, Riga to our Baltic harbours in Ust-Luga and Primorsk, as well as in Novorossiysk”, he said.

“If last year there (in the Baltic States - IF) about 9 million tons of petroleum products were transhipped, so this year - 5 million tons. Until 2018, in the coming years, we will reduce the traffic flow in the Baltic States to zero. We will load our harbours, as there is surplus capacity”, explained the head of Transneft.

“Plants allow us today loading of oil-products pipeline up to 32 million tons, and the part of capacities not demanded by the oil we reorient for products. This will occur in the direction of Primorsk – we will supply up to 25 million tons of diesel fuel, as well as in the direction of Novorossiysk from the Volgograd refinery plant and oil refinery plants of Krasnodar region”, said N. Tokarev.

Implementation of the project to increase capacity of the oil-products pipeline Vtorovo-Yaroslavl-Kirish-Primorsk (“North”) up to 25 million tons per year will allow (starting from 2018) fully redirecting the volumes of diesel fuel to the harbours of Primorsk and Vysotsk, which are currently transhipped in Riga and Ventspils.

In 2016, according to the data of Transneft, it is planned to transport and tranship in Primorsk 15.5 million tons of diesel fuel under the “North” system, in Ventspils will be transhipped of 2.6 million tons of fuel supplied through a pipe, in Riga and Ventspils - 3.6 million tons transported by rail, of which the largest volume will be in Bashneft - 1.7 million tons, 700 thousand tons for Rosneft, 500 thousand tons for Gazprom Neft, 200 thousand tons for LUKOIL”. The PIA companies have not responded to a request, whether they will be ready to transfer these volumes from railway in “North” starting from 2018.

Latvia is Trying to Find Replacement for Russian Oil

Latvia wishes to become a member of the transport project “New Silk Road”, taking into account the decision of the Russian company Transneft to stop the export of oil through the Baltic ports by 2018.

Such an opinion was expressed by the head of the company “Baltic Association of Transport and Logistics” (BATL) Inga Antane in an interview to the Latvian TV.

Antane puts high hopes on the upcoming summit of the heads of governments of the countries of Central and Eastern Europe and China in the "16+1" format in early November in Riga, which will discuss “New Silk Road”, was informed by portal rosbalt.ru on Sunday.

Participation of the Republic in this route now “virtually is the only way to ensure that Latvia was not in transit isolation”, she said. “We have to be there. We very much hope that we will be part of the “Silk Road”, said the head of the BATL.

“Exactly Latvia and other Baltic countries have seaports with access to both the Scandinavian market and Russia, and this possibility do not have a very large number of countries”, emphasized Antane.

She noted that the decrease in the volume of cargo turnover in Latvia began in 2015, especially in the Freeport of Ventspils. Senior officials in charge were informed on the situation, who also were called to review and develop competitive rates to maintain the status of a transit country for Latvia.

“I believe that the drop in freight traffic in Latvia can be viewed as dramatic one, particularly given the recent statement made by Russia that it could completely stop the export of oil products through the ports of the Baltic countries by 2018, including Latvia. Therefore, our association and its member companies believe that the dramatic situation is formed in the industry, especially given the fact that transit is the second largest and most historically significant sector of Latvia, which brings the country's economy about 1 billion euro per year”, said Antane.

According to the Estonian carriers, it is not a surprise the decision of the Russian side to completely stop the export of oil products through the Baltic Sea ports in the next few years. As the heads of the Estonian state-owned transportation company EVR Cargo said, as the transit of oil products through Estonia by now is interrupted.

“Export of oil products through Estonia is already completed in March of this year, so that the statement is not anything unexpected. Similar statements were heard before, it is primarily a domestic political statement”, said to BNS Chairman of EVR Cargo Raul Toomsalu.

The heads of the Port of Tallinn and Sillamae Port of Estonia similarly assessed the plans made by the Russian side.

Last week, the head of a major Russian petroconcern said that Russia continues to reorient deliveries of oil products for export through ports in the Baltic States in favour of its own facilities.

“In accordance with the request of the government, we reorient freight traffic from the Baltic ports: Ventspils, Riga – to our Baltic ports, which is Ust-Luga and Primorsk, as well as Novorossiysk”, said the head of Transneft Nikolay Tokarev during a meeting with Russian President Vladimir Putin.

“If last year there (in the Baltic States - IF) it was transshiped about 9 million tons of oil products, so this year only 5 million tons. Until 2018, in the coming years we will reduce the flow of goods within the area of the Baltic States to zero. We will load our ports, as there is capacity surplus”, he said.

Most Latvian Employers Lack of Skilled Employees

Latvian employers have serious problems with the availability of labour force - 70% of them constantly, frequently or quite often do not have enough skilled employees, and 85% cannot find the employees who would be rated as “good” ones by the company, according to a survey conducted by the Employers' Confederation of Latvia (LDDK).

47% of the companies prefer specialists with secondary and higher professional qualifications while looking for employees.

In the survey, 96% of respondents said that improvement of professional skills of employees and their education throughout their lives is very important or rather important. Getting an education by adults is usually complicated by the need to pay tuition, poor offer of educational programs for adults, lack of motivation among the employees themselves, as well as limited possibilities of time planning so to be able to combine work with studying.

There was not a single enterprise, participated in the survey for which previous experience of the candidate would not be important.

The survey involved 98 companies from all sectors of the national economy. Including 60% of respondents are large or medium-sized enterprises.

The Food and Veterinary Service Found Old Sweets Delivered to the Largest Stores of Latvia

The Food and Veterinary Service (FVS) found out that a large-scale overlabeling of food products with expired expiry date is carried out at the warehouse of the company Triom in Jelgava. The Service discovered almost ten tons of various sweets - candies, chocolate, cookies with expired expiry date.

Information obtained during the inspection specifies that LLC Triom supplied products to a wide range of customers, including the largest retail store chains of Latvia, such as Maxima, Rimi, Mego, Elvi, informed the representative of the FVS Ilze Meistere to the LETA Agency.

The FVS inspectors found a variety of solvents, agents for removing paint and other tools used for the removal of the original labelling during the inspection at the warehouse. In addition, 26 different stamps with dates and batch numbers were seized, which were used for overlabeling of food products.

Re-packaging of goods was also carried out at the warehouse - products with expired expiry date were replaced out of original package to the boxes of larger sizes, labelled with the new expiry date and batch number, as well as supplied with new accompanying documents.

It is the largest scheme of overlabeling of food products ever found out by the FVS, said Meistere.

Technological tools used and accuracy of the performance demonstrate the scale of the company activity - counterfeit labeling is virtually indistinguishable from the original one. This can be done only at the time of the inspection, when there were detected packages with the original labelling, packages with labelling removed and packages with counterfeit labelling.

While overlabeling goods, letter fonts were used specially selected for each item. While repackaging, specially ordered boxes of different sizes were used, as close to the original, in which the original manufacturer's name and trademarks were placed.

The FVS has started to recall of goods from identified retail store chains across Latvia.

Import of Cigarettes in Latvia Increased for a Quarter within Seven Months

Reducing the Number of Banks Has Been Explained by the Limited Growth Opportunities

Since 2008, quite a lot of banks left the market of Latvia, but due to the limited economic potential these trends will continue in the coming years, said President of the Association of Latvian Commercial Banks Martins Bichevskis in an interview to the Latvian Radio.

Banks are a mirror of economics, he said. Limited capacity of the Baltic economics affects the ability of banks to grow and make money. Banks cannot build its business without people and enterprises. In Latvia and in the Baltics in general, demographic trends are negative, which limits the growth of economics. If the number of enterprises is not growing, if the population decreases, so the number of banks decreases as well, said President of the Association.

Commenting on the plans of the association of DNB Bank and Nordea, Bichevskis noted that competition will change in the banking sector, and this is good news for customers. The second good news for the market is that the combined bank will be the Baltic bank, as currently DNB Bank and Nordea, in fact, are subsidiaries of Scandinavian banks in Latvia, Lithuania and Estonia, which carry out a business plan approved in Scandinavia. The new bank will be a real Baltic bank, so there is hope that it will seriously think about innovations and development, said Bichevskis.

As previously reported, the banks Nordea and DNB entered into an agreement to combine activity in Estonia, Latvia and Lithuania in order to create a new leading bank in the Baltic States with strong Scandinavian roots. It is planned that the deal to establish a new bank will be concluded in the second quarter of 2017. Nordea and DNB will operate separately as competing banks until all the required permissions will be received.

As pointed out by representatives of Nordea, both banks will complement each other - Nordea takes a strong position in the segment of large enterprises, but DNB is a strong player in the segment of small and medium-sized enterprises. By pooling their resources, the banks will become a larger and more influential player also servicing of individuals. In addition, the new bank will have a wider availability and geographical coverage, taking into account the strong positions of Nordea in Estonia and DNB in Lithuania, as well as equal positions of the banks in the Latvian market, said in a statement on the planned unifying of the banks.

The new bank, which will appear in the result of the unifying of Nordea and DNB will be the second largest in the Baltic States. Its loan portfolio will amount to 13 billion euro, but the amount of deposits - 8 billion euro.

Dairy Farmers and Pig Breeders will be Able to Change the Type of Activity without Sanctions

The appropriate changes in regulations are made and mandatory deadlines of supervising the implementation of projects co-financed by the EU are reduced in order to facilitate complicated procedure when dairy farmers and pig breeders want to reorient to other agricultural activities because of the crisis. Relevant amendments to the Regulation “Procedure for the Provision of State Support and the EU for the Development of Agriculture and Fisheries” were today adopted by the government.

As explained by the Ministry of Agriculture, farms which are affected by the Russian embargo are currently experiencing financial difficulties and sometimes are forced to change the scope of activities, but it is complicated by the rules of money disbursement of EU funds, according to which the supervision of completed projects needed to be conducted five years more after the last payment.

If the farm starts to engage in other activities before the deadline, for example, breeds beef cattle in the farms built for dairy cattle, it will have to pay not only fines, but also, perhaps, to return all financing invested in the project.

To avoid a situation when farmers are forced to keep loss-making activity, as they undertook the relevant obligations, the Ministry of Agriculture appealed to the European Commission and decided to amend the provisions of supervision after explanations received, providing that the term of supervision will be already applied starting from making a decision to approve the project implementation applications of the applicants in the fields of dairy farming and pig breeding.

In addition, the dairy and pig farms will be able to change the project aims and reorient to other agricultural sectors, submitting the application to the Rural Support Service.

In Latvia, there are low purchasing prices for milk are kept, so farmers are beginning to reduce the herds, switching to the production of meat and more milk is sold to buyers from Lithuania, where rise in prices is observed exceeding the average performance in Latvia - 18 cents per kilogram of milk.

81 million euro have been invested in the construction and reconstruction of meat and dairy farms in Latvia of the EU funds and state subsidies in 2007-2013. The largest projects were a pig-breeding complex LLC "Baltic Pork" – 3.9 million euro, a dairy-farm LLC "Seli" – 3.6 million euro, a dairy-farm LLC "Agro-Dzelzava" – 3.6 million euro.

In Italy, the Branch of the Latvian Bank “PrivatBank” is Closed

The Central Bank of Italy said today that it has begun to take actions to close the Latvian branch of the credit institution “PrivatBank” on its territory, since this financial institution has violated regulations governing the prevention of money laundering, said the agency Reuters.

As pointed out by the central bank of Italy, a subsidiary of “PrivatBank” has no right to carry out any operations, except that it is allowed to customers to withdraw their funds or transfer them to other banks.

This decision was adopted after the country's central bank carried out a check in the branch of “PrivatBank” in the period from March 16 to April 6.

During the inspection “significant violations of the rules on the prevention of money laundering were revealed, and there is a risk that violations may be repeated,” said the Central Bank of Italy.

As reported, the Financial and Capital Market Commission (FCMC) applied a fine in the amount of 2 million euro for violations to JSC “PrivatBank” in December 2015.

The FCMC relieved of duties the Chairman of the Board of the Bank Alexander Trubakov and responsible Member of the Board Iveta Kerpe, and also recommended the Bank Board to completely change the board.

The FCMC has motivated its decision by saying that the bank concluded high-risk transactions that do not meet standards.

The audit of transactions for the period from 2012 to 2014, mentioned in the published study “Kroll” by the National Bank of Moldova, violations in the analysis of customers, documenting of information, supervision of transactions were found which the bank has not qualified as suspicious and has not notified about them the Service of prevention of legalization of illegally gained funds.

PrivatBank is the 11^th bank in Latvia in terms of assets. Shareholder of the Latvian "PrivatBank" is a homonymous Ukrainian bank.

Differentiated Tariffs for Electricity: Who will Pay More?

Today new tariffs for distribution service component of electricity come into force, making payments for the consumed electricity, which provide the introduction of a fixed monthly fee to all electricity consumers. Low-income users will be compensated the increase of electricity bills.

After the introduction of new tariffs of JSC “Sadales tīkls”, electricity bills will decrease to those customers who consume electricity efficiently, but will increase to those who do not consume energy or consume it inefficiently.

For example, for households with single-phase connection, which do not consume electricity the bills will increase by a fixed monthly fee in the amount of 1.5 euro (including VAT). In its turn, with relatively small electricity consumption - 85 kilowatt hours per month – a total bill will increase by 0.23 euro. When consuming of 115 kilowatt hours per month, the bill will decrease by 0.21 euro, while consumption of 300 kilowatt hours - by 2.97 euro per month.

A fixed monthly fee will depend on the connection power in households with three-phase connection. For example, the bills will increase in the future for a fixed monthly fee in the amount of 4.84 euro (including VAT) under the three-phase connection 20 A, when the electricity is not consumed. In its turn, with relatively small electricity consumption - 100 kilowatt hours per month, total bill will increase by 3.35 euro. When consuming of 400 kilowatt hours per month, total bill will be decreased by 1.13 euro, while electricity consumption of 600 kilowatt hours – by 4.1 euro per month.

The new model of tariffs of “Sadales tīkls” envisages the introduction of a fixed monthly fee for all consumers in accordance with the power used. Due to the socio-economic situation at the state level, the decision was made that members of the protected groups will be able to pay lower prices. Servicing of such users is carried out by “Elektrum” in 2016, applying the relevant discounts.

According to the law, support will be able to get large families, where are three or more children or wards under the age of 18 years. If you have three or more children and at least one of them is in the age of 18-24 years, and continues to study, a discount is pertained to such a family as well. Also, the support is pertained to invalids of the first group, to families in which there is a disabled child under the age of 18 years, the needy and financially disadvantaged individuals.

The needy and financially disadvantaged individuals do not need to submit applications, since the monthly data are provided by social service of municipality. Others need to fill out a form on the portal: www.elektrum.lv.

One protected consumer with single-phase connection is compensated a fixed connection fee in the amount of 1.5 euro including VAT, for three-phase connection and electric current on the electrical box up to 16 amperes, 3,872 euro with VAT is compensated. With three-phase connection and electric current on the electrical box exceeding 16 amperes, a fee of 0,242 euro for each amp including VAT in compensated, with the maximum current at which the compensation is paid, does not exceed 32 amperes.

If the electricity is consumed by a number of protected consumers, so each of the households with the needy and financially disadvantaged individuals, as well as invalids of the first group and the families who have children with disabilities, the support in the amount of 1.5 euro with VAT is provided.

The lower price applies to the first 100 kilowatts consumed per month by invalids of the first group, families who have children with disabilities, as well as the needy and financially disadvantaged individuals. For large families, this value is 300 kilowatts.

Reduced price for electricity is 0.02542 euro per kilowatt hour without VAT for the first consumed 100 or 300 kilowatt hours starting from August 1 of this year regardless of the consumer group.

Latvians are more likely to be refunded the overpayment of taxes

In the first half of the year, the amounts of personal income tax (PIT) have grown by 60.8%, refunded to the people by the State Revenue Service, said Acting General Director of the State Revenue Service Dace Peleka at today`s press conference.

In the first half of the year, the PIT refund was 59.03 million euro, which is for 22.33 million euro higher than a year earlier.

This is related to the fact that people increasingly file annual declarations of income and show more considerable amounts of reasonable expenses in its.

In the first half of 2016 560 426 annual declarations of income were filed, but in 2015 for the entire year - 593 151 declarations.

The amounts requested to be refunded under the declarations for the six months amounted to 72.48 million euro, but in the past year throughout the year - 70.41 million euro, in 2014 - 54.96 million euro.

Proceeds from the PIT in the first half of the year amounted to 723.87 million euro, a year earlier – 694.54 million euro.

How to return the overpaid amount of income tax?

In some cases, the taxpayer does not need to file an annual declaration of income in a mandatory manner, but in his own interest is to file an annual declaration of income to get back overpaid tax.

The annual declaration of income of the population with the documents attached thereto, which certify the reasonable expenses must be submitted to the Customer Service Centre of the SRS.

It should be taken into account that the applicable rate of reasonable expenses is 213.43 euro while declaring of reasonable expenses on education and health care services and payments of health insurance premiums, and when filling in the annual declaration of income for 2014.

More detailed information on the refund of overpaid amount of personal income tax is available on the website of the State Revenue Service.

"Coface": Global Business Risks Reached the Highest Possible Level

The international credit risk insurance company “Coface” raised its estimate of Latvia to A4 in the rating of business environment of countries. Despite the fact that the rating has improved for a number of European countries as well, the overall level of risk in the world reached a record high level. Evaluation of business environment of the world's largest economies - the US and China - has deteriorated.

Taking into account the steady growth and reduced export dependence on Russia, "Coface" improved assessments of Lithuania and Slovenia up to A3 (this rating remained unchanged also for Estonia), in its turn, the risk assessments of Latvia and Romania improved to A4. In Western Europe, the credit rating assessments increased in France (A2) and Italy (A3).

In general, the global business risk reached the highest possible level, which was observed previously in the early 2000s for the last time. Average corporate risk in all 160 corresponds to the level B or “significant risk” countries at the moment. The forecast for global growth in this year was decreased by 2.5% by "Coface", which is explained both by a lack of a market and low inflation. Credit risk rating has fallen for world's leading economies – the USA - A2, China - B.

“Countries around the world are affected by the rapid decline in export, tourism and investments of China, fluctuations in different markets have a negative impact on business as well, especially in the oil one”, says the director of Coface in Latvia Arnis Blumfelds. “The biggest risk in Europe at the moment is the political uncertainty significantly affecting both entrepreneurs and households. After the Brexit voting "Coface" lowered its growth forecast for the UK GDP this year by 0.6 points, to 1.2%. At the same time, the growth forecast of the Eurozone in 2016 remains stable (1.7%), followed by household consumption, private sector investment, as well as lower oil prices and low interest rates of the European Central Bank, which had a positive impact on business”.

This quarter, a new category was introduced in the risk rating - E or “extremely high credit risk”, and this assessment is already assigned to countries such as Syria, Libya, Afghanistan, Iraq, Iran, Cuba and Venezuela.

Business Environment Risk Assessment of "Coface" is based on various factors, such as political, economic and financial condition of the country, insolvency trends of enterprises and trends of the business environment. Risk assessment has seven levels: A1 (very low), A2, A3, A4, B, C and D (very high), in addition positive or negative development trend is added to each assessment.

The Shopping Mall “Domina Shopping” Changed its Owner

EfTEN Kinnisvarafond II Real Estate Fund bought the shopping mall Domina Shopping in Riga from the company KanAm Grund Group for 74.5 million euro, have informed BNS its representatives.

The loan in the amount of 45 million euro for this deal was issued by the Latvian branch of Nordea Bank.

As pointed out by the head of EfTEN Capital in Latvia Victor Savin, the shopping mall Domina with its central location is suitable for the Fund in terms of its strategy. “Buying of the shopping mall Domina is an important step in the development of the company, confirming the leading role of the enterprise in the region”, he said.

Manager of the shopping mall Domina Shopping will be Dina Buntse, who has over ten years of experience in management of shopping malls, including more than eight years she had been working in the management of the shopping mall Spice, but the last six years she was responsible for the activity of the shopping mall Saules Miestas in the Lithuanian Siauliai bought by EfTEN Real Estate Fund III in the last year.

The desire to open a hypermarket in the shopping mall Domina Shopping was expressed by the retail company Rimi Latvia.

The area of the shopping mall Domina Shopping is more than 120 thousand sq. m. m., it is the second largest shopping mall in Riga. There are more than 160 stores. In 2015, the turnover of Domina Shopping amounted to 64.4 million euro – for 7% more than in 2014.

EfTEN Real Estate Fund established in 2015 is the closed real estate fund managed by the company EfTEN Capital founded in 2008. License for the company management of alternative investments was issued by the Estonian institution of financial supervision.

It is unprofitable to Build Apartments of Economy Class in Latvia

People in Latvia want to buy residential property, but they usually choose apartments of economy class, the final price of which is so minimized that this cannot not to affect the quality of construction. It is unprofitable to build apartments of economy class in Latvia in small amounts, said the owner of the real estate company “Vestabalt” Aldis Plaudis in an interview with LETA.

“Fighting for the final costs per square meter, builders and developers are forced to save where it is not supposed to be saved. Simple materials, poor quality finish. Also, it is not a secret that taxes are optimized in the construction for a cheaper final product”, he said.

Plaudis believes that it makes sense to build apartments for the price of 1200 euro per square meter only under large amounts.

“The developer has to buy a piece of land, to pay the architect, designer, for the construction of communications, bank interest, commissions to those who will sell the apartments. It is almost impossible to fit into the price of selling the apartment up to 1,200 euro per square meter with all these costs”, he explained.

Economist: Due to the Exit of the UK from the EU Woodworking Industry in Latvia Will Suffer the Most

Although the direct impact of the exit of the UK from the EU on Latvian export will not be huge, because export to this country is 5% of the total volume, the effects may be felt by particular industry - woodworking, for which the United Kingdom is an important market, said to the LETA agency an economist of Swedbank Martins Kazaks.

Falling of the British pound and demand may negatively affect the industry. If that happens, it will affect the speed of decline of the unemployment rate in Latvia, but the export will not grow as we would like it to grow.

“Money transfers by our emigrants to their families in Latvia will be reduced. If “Brexit” would lead to weakening of the entire European economics, it will affect all export. For Latvia, it would mean a drop in exports, a slight increase in unemployment, lower income of state and municipal budgets than desired, less willing to invest. The growth in Latvia will become weaker. The competition at the export markets will be even more acute, and it will be more difficult to raise salaries”, explained the expert.

However, the overall stability of the Latvian economics depends not on the exit of the UK from the EU, but on what the country can do itself. Negative impact on the Latvian economics will be felt, but it will not be very dramatic, said Kazaks.

Therefore, to strengthen the national economy you have to do what they say for years - to implement structural reforms in a number of sectors, including in justice, health, education. “We can survive if we are strong”, concluded the expert.

The SRS Discovered Fraud with Customs Duties for Hookah Tobacco

Customs officers of the State Revenue Service (SRS) found fraud with customs duties while importing of the hookah tobacco cargo from Lithuania, have informed the Department of Public Relations of the SRS to BNS.

The SRS pointed out that it is the second disclosed violation related to tobacco cargoes for hookahs within the last month imported from Lithuania in transit.

On June 10 of this year, customs officers checked the transit cargo exported from Latvia at the customs check-point “Terehova”. 21 tons of tobacco for hookahs was listed in the invoices, which are transported from one of the customs warehouses in Lithuania to Kyrgyzstan. The declared cargo - tobacco for hookahs - was not found on the view, while 22 pallets of cans with unknown liquid and two pallets of pavement were found out, said the SRS.

“In order to legally put into requisition the cargo goods within the EU, it is necessary to clear it at the customs warehouse, paying of customs duties (duty, excise duty and VAT). Fraudsters prefer to leave the cargo in the territory of the EU without paying taxes. Such actions are covered by documents – invoices have been stamped, confirming that the cargo should be on the territory of the EU in transit, but in fact the cargo remains in one of the EU countries. Similarly, in the case of the cargo checked on June 10 - tobacco probably remained in the territory of the EU to implement it without payment of customs duties established. Losses from fraud arising from non-payment of taxes in the EU are approximately 1.1 million euro, and will be charged to the person providing a guarantee”, said the SRS.

The procedure has been initiated related to an administrative offense - non-declaration of goods or declaring it under a different name.

Cooperation with Lithuanian law enforcement authorities is carried out to clarify the circumstances. Alienation of the vehicle and the goods was made.

Affordability of Residential Property has Improved in the Capitals of the Three Baltic States

According to the Swedbank index that determines the affordability of residential property, in the first quarter of this year this index in Tallinn in comparison with the previous year has improved the fourth quarter in a row. The net salary of the inhabitants of the capital of Estonia in the first quarter grew by 8.5% in the annual comparison and is much higher than the growth of apartment prices.

In the first quarter of 2016 the growth of apartment prices in Tallinn has slowed down compared to the previous year up to 0.6%. The growing number of transactions with the residential property slowed in the first quarter up to 7%, but in April and May less transactions were concluded compared to the same period in the last year. Apartment prices in downtown are falling since the last quarter of the last year. This decline was compensated by the strong annual growth of prices in other parts of the city with high activity of transactions (for example, in the first quarter the growth was by 6% in Lasnamäe, up to 14% in Mustamäe).

The offer of new apartments remains at high level. Currently apartments for sale are offered within about 100 development projects at different stages of construction in Tallinn. For certain projects, preliminary sale of apartments has just begun, at the same time in other houses only a few apartments remain unsold. The number of permits issued for the construction of apartments falls for three consecutive quarters, but in the first quarter, it remained above the average for the five years. In average, 600 apartments have begun to be constructed quarterly over the past year. The difference in the price of transactions between newer and older apartments dropped during the whole year due to lower prices for new apartments, which makes the new apartments more and more attractive for customers.

On the other hand, the consumer confidence in the need to build or buy property in the next 12 month is falling within three consecutive quarters. In the first quarter of 2016, the turnover growth of new housing loans slowed down to 5 per cent in annual comparison, however, the growth of total housing loan portfolio accelerated to 4.4 per cent. Despite the rapid growth of wages and low interest rates, the turnover of new housing loans was falling in March and April.

The offer of new apartments will remain at a high level in the near future. As consumers' willingness to buy real estate is showing signs of fluctuations, price growth of apartments should remain modest. Some correction in prices may occur of the old apartments with high operating cost.

In the first quarter, affordability of residential property improved in accordance with the Swedbank index also in Riga and Vilnius. The best residential property affordability remained in Riga among the capitals of the three Baltic States, where the greatest contribution to the improvement of the index was made by falling of apartment prices by 4.6% in the annual comparison. In Vilnius, the net salary rose by 7.1% in the first quarter, but affordability of residential property has improved slightly due to the growth of apartment prices by 6.7%. Thus, apartment prices in the three Baltic capitals have changed in very different ways in the first quarter.

Starting from June 1 Banks will Verify the Customers with Respect to Political Importance

Starting from June 1 banks and other institutions that provide financial services will find out, whether the customer is a politically important person or not in Latvia, a member of such person's family or closely related to him before starting relationships with new customers.

In cases where a potential customer is a politically important person, a member of such person's family or closely related to him, banks will carry out detailed research of the customer in order to comply with the requirements of the Law on Prevention of Legalization of Criminally Acquired Wealth Funds and Financing of Terrorism (NILLTFNL), which aim is to reduce the likelihood of legalization of funds received from corruption deals.

In early February, the Saeima amended the Law on Prevention of Legalization of Criminally Acquired Wealth Funds and Financing of Terrorism requiring the banks to deeply verify finances of politically important persons. Starting from March 1, those also include senior officials of the Republic of Latvia, their family members and persons closely related to them. Until March 1 these persons were the persons occupying important government positions in other countries, their family members and persons closely related to them.

These requirements for new customers come into force today, but in regard to existing customers - from December 1.

The Association of Latvian Commercial Banks explained that the proposal of the banking sector to make a single list of politically important persons of Latvia, their family members and persons closely related to them was not taken into account in the process of adoption of the law, whose banks will need to intensively control in accordance with the Law on Prevention of Legalization of Criminally Acquired Wealth Funds and Financing of Terrorism.

Provisions of deep research of the customer provide that the banks starting the business relationships with politically important persons, their family members and persons closely related to them must obtain the consent of the board or a specially authorized member of the board. The bank must also take measures to clarify the origin of the customer's funds, as well as to constantly monitor of his transactions.

The Association of Latvian Commercial Banks reported that banks are going to create a clear and convenient form in order to make it easier for customers to meet the requirements of the law. The principle of “know your customer” is not something new for banks, so new requirements will make no significant practical changes in everyday cooperation for most of the customers.

According to the Law on Prevention of Legalization of Criminally Acquired Wealth Funds and Financing of Terrorism, a politically important person is not only the head of state or local authority, parliamentary, Prime Minister, Minister of Deputy Minister, Secretary of State or other high-level official, high-level judges, heads of supreme audit institutions, the heads of the central bank, the commander of the armed forces, heads of public capital companies and other persons. This includes also their parents, grandparents, spouse or an equivalent person, brothers and sisters, the child or the child of a spouse or an equivalent person, grandchildren, as well as all others who have business relationships with these persons or other close relations, including - close friendship.

ABLV Bank Was Fined for 3.17 Million Euro

The Financial and Capital Market Commission (FCMC) has fined the second largest bank in terms of assets in Latvia - ABLV Bank for 3.17 million euro for violations found by the Commission during the inspection.

The FCMC also warned the bank`s Member of the Board responsible for the prevention of money laundering and financing of terrorism Alexander Pazh, said in a press release issued by the Commission.

The FCMC, ABLV Bank and the bank`s Member of the Board Pazh today entered into a tripartite administrative agreement in the field of enforcement of the law on credit institutions and the law on the prevention of money laundering and financing of terrorism in order to achieve improvement in the bank's internal control system. The agreement provides the fine payment by the bank in the amount of 3.17 million euro and warning a responsible Member of the Board of the bank.

By signing the administrative agreement, the FCMC, ABLV Bank and Pazh agreed on the settlement agreement to terminate an administrative case initiated by the FCMC related to the violations found during the inspection.

Determining the amount of the fine payable, the FCMC has taken into account that now ABLV Bank meets all regulatory requirements and continues to improve the internal control system, so the penalty was applied in a reduced amount - 3.17 million euro, which corresponds to 2.5% of the total annual income of the bank. According to the Law on Credit Institutions, the FCMC has the right to impose a penalty of up to 10% of the total bank's net income for the previous fiscal year, explains the Commission.

During audits, the FCMC found out that the bank did not provide sufficient verification and documentation of economic substance and legal purpose of separate consumer transactions in previous years. The FCMC considers that the bank did not pay sufficient attention to the transactions atypically large, complex or related for the customer and did not carry out enhanced monitoring of individual transactions of customers within in-depth complex inspection.

The administrative agreement parties have agreed on the following measures, which the bank undertook to fully take in a timely manner to improve the internal control system and enhance its effectiveness. In turn, the FCMC will oversee the implementation of the bank's obligations set out in the contract terms and amounts.

The conclusions made in the course of the FCMC inspections relate to previously executed transactions of customers and documentation of these transactions, but their assessment was conducted on the basis of today's more stringent criteria. The requirements for customer service were changing very rapidly and significantly over the last year. The bank is currently complying with regulatory requirements in full. Significantly increased the number of employees working in the area of compliance and potential of the relevant structural subdivisions has been strengthened. It also took into account the FCMC in determining the amount of the fine, which is the lowest possible, applicable to credit institutions in accordance with law.

Unfortunately, the requirements for the study and documentation of customer transactions have not yet been sufficiently elaborated in recent years, said the FCMC. Moreover, the bank refused the part of customers, servicing of whose, arising from the current requirements would create a disproportionate risk, and continues to carry out a strict assessment of customers. ABLV Bank is continuing to improve the internal control system in accordance with the recommendations of the FCMC, for what not less than EUR 6.5 million will be spend. Assessment of the bank's internal control system will be carried out and required measures to improve its operation and efficiency will be undertaken.

Last year, the profit of ABLV Bank amounted to 69 million euro.

ABLV Bank is the largest independent private bank in Latvia. The largest shareholders of the bank - Oleg Fil, Ernest Bernis and Nika Berne own 86.25% of the bank's share capital with voting rights based on direct and indirect participation.