Since July, the SZV-TD report must be submitted in a new form

The FIU has adjusted the form and procedure for filling out information on labor activity.

Firstly, a section will appear in SZV-TD, which will indicate information about the employer in respect of which the policyholder is the legal successor. It will be filled in by the legal successor of the deregistered employer, if necessary, submit (correct) information about the work activity of the registered person, previously submitted by such employer.

Secondly, the need to reflect the territorial conditions of work is provided for: in the regions of the Far North (RKS code) and in areas equated to the regions of the Far North (ISS code). It is noteworthy that the form still does not provide for the indication of information about work in other regions of the North, although the length of service in these regions also affects the provision of guarantees to workers.

Thirdly, the order of filling in the "Code of the function being performed" column has been changed. If at present information is entered into it on the basis of professional standards, then after the entry into force of the changes in question, the All-Russian Classifier of Occupations will be used for this. The code will consist of five digital characters in the format "XXXX.X", where:

- the first four characters - the code of the name of the occupation group in the OKZ;

- the fifth character is a control number.

The changes take effect on July 1, 2021.

On January 10, 2021, legislative amendments entered into force, which tighten control over the circulation of cash.

As a reminder, Federal Law No. 208-FZ of July 13, 2020 introduced new provisions into the current law on combating money laundering (No. 115-FZ of August 7, 2001).

In particular, any withdrawal from an account or crediting to an account of a legal entity in cash in the amount of 600,000 rubles or more is now subject to mandatory control. Previously, these actions came under control only if they were not determined by the nature of the company's business.

Also under the mandatory control were:

operations on crediting or writing off funds when making payments under a financial lease (leasing) agreement, if the amount is equal to or exceeds 600,000 rubles;
postal money transfer operations, if the amount is equal to or exceeds 100,000 rubles;
operations to return the unused balance of funds contributed as an advance for communication services, if the amount is equal to or exceeds 100,000 rubles.
At the same time, the new law abolished the requirements for control over such operations as:

exchange of banknotes of one denomination for banknotes of another denomination;
transfer of funds abroad to an account opened for an anonymous owner, and receipt of funds from abroad from an account opened for an anonymous owner;
money transfers carried out by non-credit organizations on behalf of the client;
receipt or provision of property under a financial lease (leasing) agreement.
Also, the new norms establish that transactions with cash or non-cash funds in a real estate transaction are subject to mandatory control if the amount is equal to or exceeds 3 million rubles. The previous wording of the law did not specify the form of funds (cash or non-cash) used in these transactions.

The amendments changed the requirements for the control over operations related to state defense orders. In particular, now operations on the second and subsequent crediting of funds to separate accounts are subject to mandatory control if the amount is equal to or exceeds 10 million rubles. Previously, this threshold was 50 million rubles.

In addition, the new rules oblige organizations carrying out transactions with monetary funds or other property to document and submit to the authorized body the information necessary to identify a foreign structure without forming a legal entity performing an operation with monetary funds or other property.

Resolution of the PFR Board of October 27, 2020 N 769p (registered in the Ministry of Justice on January 19, 2021)

Fines 2021: what homeowners will have to pay for

Since January 1, 2021, several laws have come into force that will change the lives of apartment and house owners. For violation of the new norms, Russians will face sanctions, penalties, fines and even criminal punishment.

Fines in 2021:

For violation of fire safety - up to 5,000.00 rubles,

A fine can also be received for an open fire left unattended in residential premises, including on balconies and loggias, as well as for parking a car near the house, if it closes the place where the nozzles for fire equipment on the facade or the cover of the fire hydrant well are closed.

Fines will also affect the owners of private houses, who now have to cook food on fire exclusively in specially designated places (for example, a barbecue is suitable). “Moreover, this brazier should be located 5 m from any outbuilding, and within a radius of 2 m there should be no flammable substances. In order not to receive a fine for making fires on the site, now you need to dig a hole at least 30 cm deep and up to a meter wide, and before any building there must be at least 50 m

For harmful garbage:

For citizens - up to 2000.00 rubles.

For officials - up to 30,000, rub

For persons engaged in entrepreneurial activity up to 50,000.00 rubles

For legal entities persons - up to 250,000.00 rubles

From January 1, 2021, the collection of penalties for the payment of debt for communal services will resume. From this year, arrears that arose before the introduction of the moratorium, that is, until April 6, 2020, can be presented for payment. If the debt was formed during the moratorium period - from April 6 to December 31, 2020 - then penalties will be charged only starting from the 31st day of delay in payment

The mechanism for calculating the property tax will also change from this year. Now the basis for the calculation will be the cadastral value of the object as close to the market value. The result will be a significant increase in property tax. Reducing coefficients can no longer be used, and the delay in payment will cost the taxpayer 20% of the amount of the accrued tax. If the delay was deliberate, the penalties will increase to 40%. However, the signs of this very intentionality are not disclosed in the laws. The sanctions also include daily penalties in the amount of 1/300 of the product of the duration of the delay

The key rate has been kept at 4.25% per annum. Key rate remains at 4.25% per annum

Information from the Bank of Russia dated December 18, 2020

The Bank of Russia Board of Directors left the key rate at 4.25% per annum. This value was established in July 2020.

The Central Bank notes that, given the high heterogeneity of current trends in the economy and price dynamics, it will assess the further development of the situation and the potential for an additional reduction in the key rate. Subsequent decisions on the key rate will be made by the Bank of Russia taking into account the actual and expected dynamics of inflation relative to the target, the development of the economy over the forecast horizon, as well as assessing the risks posed by internal and external conditions and the reaction of financial markets to them.

The next meeting of the Bank of Russia Board of Directors, which will consider the issue of the key rate, is scheduled for February 12, 2021.

Recall that the issue of the size of the key rate is important, in particular, when calculating interest for the use of someone else's funds under Art. 395 of the Civil Code of the Russian Federation; percent under Art. 317.1 of the Civil Code of the Russian Federation (legal interest); compensation for delayed wages, vacation pay, dismissal payments and other payments due to the employee, penalties for taxes, fees, contributions, etc.

In addition, from 2021, the key rate affects the amount of personal income tax on income from deposits in banks - the lower the key rate on January 1, the less the "deduction" and, accordingly, the greater the tax.

Since December 23, the minimum amount of arrears of natural persons possible for collection through the court has been increased to 10,000 rubles

On December 23, 2020, amendments to p. 1, 2 tbsp. 48 of the Tax Code of the Russian Federation, according to which the tax authority (customs authority) can apply to the court to collect arrears at the expense of the property of an individual who is not an individual entrepreneur, provided that the total amount of taxes, fees, insurance premiums, penalties, fines unpaid by him on the basis of requirements exceeds 10,000 rubles (not 3,000 rubles, as it was before).

At the same time, the mechanism for collecting arrears within the specified amount will continue to operate: if, within three years from the date of expiration of the deadline for the execution of the earliest claim for payment of tax, due, insurance premiums, penalties, fines taken into account when calculating the total amount to be collected, such amount of taxes etc.) does not exceed 10,000 rubles, the tax authority (customs authority) applies to the court with an application for collection within six months from the expiration date of the specified three-year period.

Federal Law of November 23, 2020 N 374-FZ

Having submitted an application for the transition to an electronic work book, one cannot re-require the maintenance of a paper work book.

According to Part 5 of Art. 2 of the Federal Law of December 16, 2019 N 439-FZ, an employee who has submitted a written application for the employer to continue keeping a work book in accordance with Article 66 of the Labor Code of the Russian Federation has the right to subsequently submit to the employer a written application for the employer to provide him with information on labor activity in accordance with Article 66.1 of the Labor Code of the Russian Federation. At the same time, the law does not indicate the existence of a similar right for employees who, until December 31, 2020, did not submit any application without good reason, and for whom the law also provides for the continuation of their paper work books.

The Ministry of Labor of Russia received a request to comment on this situation. However, the department did not give an answer to this question. But they indicated that the law does not provide for the possibility of resuming the maintenance of a paper work book after an employee submits an application for switching to an ETC and making a corresponding entry in the work book.

Letter of the Ministry of Labor and Social Protection of the Russian Federation of December 14, 2020 N 14-2 / ​​OOG-18054

Executive holidays extended

Federal Law of July 20, 2020 N 215-FZ establishes the specifics of the compulsory execution of judicial acts, acts of other bodies and officials, as well as the return of overdue debts during the spread of a new coronavirus infection. In particular, the aforementioned law in relation to pensioners, as well as small and medium-sized businesses employed in the industries most affected by the pandemic, provides for an installment plan for the payment of debt according to the submitted executive documents (the so-called "executive holidays"). The installment plan is provided once, the debt must be repaid in monthly equal payments (for more information about the essence of executive holidays, the conditions and procedure for obtaining them for citizens and businesses, see our materials - a special review and news).

Now, such an installment plan can be obtained according to executive documents, which will be presented for compulsory execution until 05/01/2021 (and not until October 1, 2020, as previously stipulated). The corresponding amendments to Law No. 215-FZ entered into force last week (12/22/2020).

In addition, until July 1, 2021 (previously the deadline was 12/31/2020 inclusive), the period during which the bailiff-executor does not apply compulsory enforcement measures related to the arrest and seizure of movable property against all debtor citizens, has been extended. excluding vehicles. Recall that this restriction does not apply to the execution of a judicial act on the seizure of the debtor's property.

The minimum wage for 2021 became known

The Ministry of Labor has established a living wage for the working-age population for the II quarter of 2020. It is equal to 12 392 rubles. This means that the minimum wage for 2021 will be approved in the same amount. Now the minimum wage is 12 130 rubles.
Let us recall that the minimum wage for the next year is set in the amount of the subsistence minimum for the working-age population for the second quarter of this year. For this, a separate law is adopted.
Document: Order of the Ministry of Labor of Russia of 08/28/2020 N 542н

To establish, in agreement with the Ministry of Economic Development of the Russian Federation and the Ministry of Finance of the Russian Federation, the subsistence level for the whole Russian Federation for the second quarter of 2020 per capita - 11,468 rubles, for the able-bodied population - 12,392 rubles, pensioners - 9,422 rubles, children - 11,423 rubles.

The income tax return for 2020 must be submitted in an updated form

The IFTS finalized the declaration form, its format and the procedure for filling it out.
Let's point out the main improvements:
• updated barcodes;
• amended Appendix No. 2 to the declaration will be filled in by taxpayers who have entered into an agreement on the protection and promotion of investment. Information about the income of an individual from operations with securities in this application will no longer be indicated;
• new signs of a taxpayer have appeared, for example, code 17 for IT companies;
• added fields to sheet 02. They are also provided for participants in special investment contracts and residents of the ASEZ;
• for sheet 04, a new code for the type of income was added - 9. This code is filled out when it is necessary to reflect the shareholder's income from the distribution of the property of the liquidated organization in the declaration;
• another type of adjustment has appeared on sheet 08 - based on the results of the mutual agreement procedure.

Document: Order of the Federal Tax Service of Russia dated 09/11/2020 N ED-7-3 / 655 @

The government has prepared a project according to which the annual income is more than 5 million rubles. you need to pay personal income tax at a rate of 15%.

It is planned that the new rules will need to be applied starting with revenues generated in 2021.
Note that the income of residents of the Russian Federation from the sale of real estate is planned to be taxed, as now, at a rate of 13%.
Let us remind you that the President made a proposal to introduce a progressive rate. Additional income will be directed to the treatment of children. This is true for SG

Document: Draft Federal Law N 1022669-7

New measures to support small and medium-sized businesses in Moscow became known

The city authorities have adopted another package of measures to support business in connection with the spread of coronavirus and the introduction of high alert. Among other things, the following innovations can be distinguished:
• small and medium enterprises of any type of activity will receive subsidies to pay the interest rate on loans taken (up to 6% or up to 8% per annum, depending on whether the loan was taken before or after April 15);
• cinemas, retraining organizations, sanatoriums and rest homes, as well as organizers of exhibitions and conferences will be provided with a deferment of advance payments for the first quarter of 2020 on corporate property tax and land tax. Deferral period - until December 31 of the current year;
• organizations - owners of premises for hotel accommodation will receive compensation for property tax and land tax for the II quarter. If the owner of the premises leases them for hotel accommodation, then compensation will be given to him only if the rental rate for this period is reduced by at least 50%;
• subjects of small and medium-sized businesses that rent real estate from the city and have previously concluded agreements for its redemption, redemption payments for the II quarter can be transferred until December 31, 2020 inclusive.
Document: Decree of the Government of Moscow of 15.04.2020 N 405-PP

Assistance for paying salaries and other measures: the president announced new solutions to support business

At a meeting with members of the government, the president spoke about new measures to support organizations and entrepreneurs working in industries that were affected by the spread of coronavirus.
Thus, it is proposed to include trade in non-food products in the list of affected industries. We are talking about small and medium-sized companies.
Small and medium-sized enterprises will receive direct free aid for urgent needs, including the payment of salaries and maintaining their level in April and May. The main and only condition is the preservation of the level of employment of at least 90% of the staff on April 1. The amount of assistance is 12,130 rubles. per month for each employee. To receive it, you will need to remotely submit an application during May. The first payment (for April), employers will be able to receive on May 18. In May, funds will be transferred in June.
At least 75% of the volume of interest-free salary loans should be secured by guarantees of Vnesheconombank. We are talking about loans that banks give to employers to pay salaries to employees. It is also proposed to extend this measure to medium and large enterprises that have suffered from the spread of coronavirus.
Clear criteria will be developed for classifying organizations as systemic. The list of such enterprises should be finalized by the government. A special loan product will be introduced for them - soft loans for replenishment of working capital. The state will subsidize the rate on such a loan in the amount of the key rate. In addition, half of such a loan will be provided with state guarantees of the Ministry of Finance.
Expand support for the airline industry. For the relevant organizations, funds will be allocated that they can use to pay for leasing, replenish working capital, pay salaries, and also pay for aircraft parking.
Among other things, additional funds will be allocated to maintain financial stability and balance regional budgets.
In addition, the meeting raised the issue of taxing personal income tax on the amounts of additional payments to medical personnel. As the president pointed out, citizens should receive exactly the amounts announced earlier, but according to the current legislation, they still have to withhold personal income tax. In the near future will make appropriate adjustments.

Document: Transcript of the meeting of the president with members of the government 04/15/2020

Reporting

All organizations and individual entrepreneurs can submit documents that must be submitted in March - May 2020, three months later. These include:
• declarations (excluding VAT reporting);
• tax calculations on the amounts of income paid to foreign organizations and taxes withheld;
• 6-personal income tax;
• settlements on advance payments.
In addition, until May 15, 2020, the deadline for submitting a VAT return and calculation of insurance premiums for the first quarter of 2020 was extended.
Payment of taxes and contributions:
Small and medium businesses
For small and medium-sized businesses, which are included in the register as of March 1, 2020 and operate in the most affected sectors of the economy, the deadlines for the payment of a number of mandatory payments have been extended.
The list of areas of activity most affected by the spread of coronavirus is on the website of the Federal Tax Service.
For six months:
• income tax for 2019;
• single tax at the simplified tax system for 2019;
• USCH for 2019;
• taxes (except VAT, NPA and taxes transferred by the organization and individual entrepreneurs as tax agents) and advance payments on them for March and the first quarter of 2020.
For four months:
• taxes (other than VAT, NPA and taxes transferred by the organization and individual entrepreneurs as tax agents).

The President proposed additional measures to support business, citizens and medical staff

During a meeting with regional leaders to combat the spread of coronavirus in Russia, the president proposed a number of new measures. For example, to provide a delay in the payment of insurance premiums not only to microenterprises, to expedite payments to families with children, to establish special payments to health workers.
Support for economics and business
The President said that the economy cannot be stopped, namely:
• close transport, freight, passenger traffic between regions;
• massively restrict the work of enterprises.
It is necessary to create all conditions for companies, organizations, entrepreneurs to return to their normal work schedule. There should be a list of organizations whose work is limited due to increased risks. Each entity will have its own list of enterprises that play an important, systemic role for the economy of the entities.
The president proposed the following measures:
• extend to all affected small and medium-sized enterprises a deferral of payment of insurance contributions to social funds for six months - as was done for microenterprises;
• for small and medium-sized businesses, which are provided for a deferral of all taxes (except VAT) for six months, such debts are restructured. It can be extinguished smoothly, monthly, in equal installments for at least a year after the end of the deferment;
• The government, with the participation of the Central Bank of the Russian Federation, should prepare a business support program. It should allow companies to maximize their employment and employee income. The President noted that it is fair to help primarily those companies that maintain employment.
Citizen support
The president announced the following measures:
• additional payments to families entitled to matkapital, 5 thousand rubles each. monthly for each child under the age of three inclusively will be implemented in April, as well as in May and June;
• in June (one month ahead of schedule) payments will begin to families with children from three to seven years old inclusively. For those who are temporarily recognized as unemployed, it is proposed when calculating the payment, as well as other benefits, not to take into account income received earlier at the place of work. This expands the circle of recipients of such support;
• everyone who lost their jobs and contacted the employment service after March 1 of the current year was offered to pay unemployment benefits automatically in the amount of minimum wage in April, May and June - 12,130 rubles. It will be possible to issue it remotely;
• the government should work out a mechanism for automatically renewing passports, driver’s licenses, and other certification documents for at least three months;
• for families with children where parents are temporarily unemployed, in addition to unemployment benefits and payments that are due to families with children, it is also proposed to pay an additional 3 thousand rubles for the next three months. per month for each minor child;
• The government should make holidays on consumer and mortgage loans more accessible for citizens. They will be able to use a larger number of people.
Healthcare Support
Since April, the president has proposed setting a special federal payment for three months for specialists who work directly with patients with coronavirus and who risk their health every minute:
• for doctors - 80 thousand rubles. per month;
• for paramedical staff - paramedics, nurses - 50 thousand rubles;
• for junior medical staff - 25 thousand rubles. per month;
• for emergency doctors - 50 thousand rubles. per month;
• for medical assistants, nurses and car crew drivers - 25 thousand rubles.
With the introduction of federal surcharges, regional ones will not be canceled.
Document: Transcript of a meeting with regional leaders on the fight against the spread of coronavirus in Russia

Ministry of Economic Development approved deflator coefficient for UTII for 2020

The indicator for UTII will be 2.009, which is 4.9% more compared to the current value (now it is 1.915). This means that the tax burden on payers using this special regime will increase by the same percentage.
Recall, the State Duma proposed to limit the growth of the deflator for UTII within inflation. According to forecasts, it will not exceed 3.8%. Perhaps the final coefficient for 2020 will be lower.
Documents: Order of the Ministry of Economic Development of Russia of 10.21.2019 N 684
Document: Letter of the Ministry of Finance of Russia dated 10/18/2019 N 03-15-06 / 80212

In 2021, entrepreneurs may pay premiums of almost 11%

Now in the Tax Code of the Russian Federation the sizes of fixed insurance premiums for individual entrepreneurs are established until 2020 inclusively.
The Ministry of Finance has prepared a draft that proposes the size of these payments for 2021-2024. The document is being publicly discussed.
The total amount of a fixed payment (and this is the amount of pension and medical contributions) for 2021 will amount to 45,218 rubles. (36 455 and 8 763 rubles, respectively). Compared with the load of 2020 - 40,874 rubles. (32,448 and 8,426 rubles, respectively) - this is 10.6% more. Further, the total payment will increase at a slower pace: in 2022 - by 9.6%, and in 2023 and 2024 - by 6%.
Recall that a fixed payment entrepreneurs pay for themselves. If income is more than 300 thousand rubles, then an excess of 1% of pension contributions must be paid. Moreover, the total amount of pension contributions cannot exceed eight fixed payments for pension insurance.
Documents: Draft federal law (https://regulation.gov.ru/projects#npa=97048)

Information on the average number of employees will be included in the calculation of contributions

A bill has been submitted to the State Duma, which proposes to adjust the procedure for submitting information on the average number of employees. If the document is accepted, then the information will be included in the calculation of contributions for the year (paragraph 2 of article 1 of the draft). Moreover, there is no special procedure for submitting information when creating or reorganizing an employer. Thus, as a general rule, they will need to be submitted no later than January 30.
Recall that now organizations annually submit information on the average number of employees no later than January 20. If the company has just appeared or undergone reorganization, it is also necessary to inform about its number no later than the 20th day of the month following the month of creation or reorganization.
Document: Draft Federal Law N 837128-7 (https://sozd.duma.gov.ru/bill/837128-7)

The list of objects from which organizations pay cadastral value tax will be changed

On January 1, 2020, an amendment to the Tax Code of the Russian Federation will come into force, which will adjust the list of objects taxed on property tax of organizations at cadastral value. The corresponding draft State Duma adopted in the third reading. Starting next year, you will have to pay tax (paragraph 2 of article 1 of the draft):
- from residential premises;
- construction in progress;
- garages;
- car seats;
- residential buildings, garden houses, household buildings and structures that are located on sites for personal subsidiary plots, gardening, horticulture or private housing.

Five new super service prototypes introduced

Prototypes of super services appeared on the government services portal:
- "Labor relations online" - for the remote conclusion of contracts with the employer;
- "Property online" - for registration of the right to a land plot;
- "Digital documents on education online" - for storing documents on education and sending them to organizations where they require confirmation of qualification;
- "My health online" - for using medical documents in electronic form and making an appointment with a medical institution;
- "Online disability assistance" - to simplify the process of registration of disability and benefits.
At the beginning of the year, we talked about the fact that the government planned to launch 25 super services on priority life situations by 2021. This initiative is being gradually implemented. Prototypes of 15 super services appeared on the public services website. Of those that are still in development, the most anticipated for business are as follows:
- business registration;
- business permissions in digital form;
- state support of business;
- digital construction;
- transportation of passengers and goods.
Prototypes are created so that users can familiarize themselves with future super services and leave comments that developers will take into account.
Document: Information of the Ministry of Communications of Russia from 11.21.2019 (https://digital.gov.ru/ru/events/39494/)

Palm oil, fruits and berries: VAT rates will change from October 1

A law has been published in which there are two amendments:
- when selling palm oil, VAT will have to be paid at a rate of 20%, not 10%;
- when selling fruits and berries (including grapes) - at a rate of 10%, not 20%.
Innovation will need to be applied when importing these products into Russia.
We believe that the government will soon adjust the lists of goods subject to VAT at a rate of 10% for domestic sales and for imports.
Document: Federal Law of 02.08.2019 N 268-ФЗ

Shelf of accounting documentation they want to clarify

Rosarchive prepared a draft amendment for the list of model management archival documents. Now there is a public discussion. Important amendments will affect the retention of documents, including:
- tax returns and disagreement documents on taxation issues (correspondence) - they will be stored as a general rule not for five, but for six years;
- registers of information on the income of individuals - five years (Article 313 of the Project) instead of 75;
- invoices - five years (Article 317 of the Project) instead of four;
- samples of signatures of financially responsible persons - they are offered to keep them for five years (Article 282 of the Project) after the change of financially responsible person (now the samples are stored for how long, but not less than five years).
Documents: Draft order of Rosarchive

MPs adopt amendments stabilizing fuel prices

Thanks to the amendments, gasoline, diesel and kerosene prices will be less exposed to pressure from world oil prices. To achieve this, for example, plan:
- reduce the notional value of the average wholesale price of sales of AI-92 gasoline in 2019 from 56 thousand to 51 thousand rubles. per ton, the price of diesel fuel - from 50 thousand to 46 thousand rubles. per ton;
- establish that the annual indexation of these wholesale prices by about 5% will be carried out until 2024 inclusive (and not until 2021, as established now);
- increase the compensation factor. For example, for gasoline - from 0.6 to 0.75 in 2019.
The amendments listed affect excise taxes. Changes will come into force from the day the law is published. They will apply to legal relations arising from July 1, 2019.
Document: Draft Federal Law N 752627-7 (https://sozd.duma.gov.ru/bill/752627-7)

Deputies adopted amendments to simplify work with online cash registers in third reading CCP outside the place of settlement

They will expand the list of cases when it will be possible to use an online cash desk located outside the place of settlements. So it will be possible to do:
• in case of distribution trading (except for cases of online payment). Recall that now for some types of distributed trading, CCP is optional (for example, for trading on airplanes);
• remote sale of goods;
• the provision of services or the performance of work paid for where they were provided (performed) when this place is located outside the office or other object of the contractor (the list is fixed in the legal norm);
• providing the population with services that need to be filled out with special forms approved by the federal authorities;
• ticket sales by driver or conductor in public transport. Recall that until July 1, with such a sale, CCP can not be applied;
• accepting fees for housing and utilities.
In such cases, instead of issuing a cash receipt or BSO, it will be possible to demonstrate a QR code on the screen of a mobile device so that the buyer can read it.
Features of using a QR code
When rendering services to the population, drawn up by special forms, it will be possible to print a QR code on the form. It will also be possible to do so when selling tickets with a driver or a conductor.
In addition, the driver or the conductor will be able to transfer the ticket with the information printed on it. According to this information, a passenger will be able to receive a cashier's check online for free. The check must be formed on the day the ticket is paid.
Features of the formation of checks when paying for utilities
When accepting payment for housing and utilities, it will be necessary to generate a cashier's check or BSO, as well as send information to the tax office within five business days from the day the money arrives in the current account. This rule does not apply when paying by cash and cards directly at the place of settlement. An electronic or paper cash receipt will be issued at the request of the client no later than five business days from the date of receipt of the request. You can apply for a check within three months from the date of its formation. If the request is not received, the obligation to transfer the check is considered fulfilled.
The provision of services through vending machines
When providing services with automatic devices that are mechanically connected to the case of an automatic device for settlements, it will be possible to use an online cash register located outside the case of such an apparatus. The client will receive a cash receipt if he provides a phone number or email address before settlement. From February 1, 2020, this will be possible if a QR code is displayed on the device’s display. Recall that similar rules are now set for the sale of goods using machines.
CCP when offsetting or returning advances
They will expand the list of services for which it is allowed to issue one check for a settlement period when offsetting or returning advances. This can be done when providing services:
• Housing and utilities, including the services of resource-supplying organizations;
• security and safety systems;
• education.
In addition, they will increase the period during which such a check is drawn up. This will need to be done no later than ten calendar days following the day the billing period ends (now - no later than the first working day).
Additions to the list of cases where CCP may not be applied
We list the cases that affect a larger number of potential users of online cash registers. So, without cash desks they can work with cashless payments:
• Partnerships of property owners (including HOAs), housing, housing and construction cooperatives and other specialized consumer cooperatives - when calculating the provision of services to their members. Such services should be provided as part of the statutory activities. In addition, these users will not be able to use CCP when accepting payment for housing and utilities;
• educational organizations in the provision of educational services to the population;
• physical education and sports organizations in the provision of services to the population in the field of physical education and sports.
Note that if the client pays with a card at the place of settlement, this exemption will not apply.
KKT at SP without workers
Entrepreneurs without workers will be given the right not to use cash registers when selling goods that they themselves have produced. This will be possible to do when performing work and rendering services. The transition to work with cash desks will be postponed until July 1, 2021.
If the entrepreneur enters into an employment contract with the employee, he will be required to register the CCP within 30 calendar days from the date of conclusion of the agreement.
Commencement of amendments
The law, when approved by the senators and signed by the president, should enter into force from the moment of publication. We believe that this will happen before July 1.
Document: Draft Federal Law N 682709-7

Ministry of Finance has adjusted the forms of accounting companies

From January 1, 2020:
- the obligation to make payments on advance payments on corporate property tax is canceled;
- the right to choose an inspection is fixed, into which it is possible to submit reports on property tax of an organization if there are several objects in one region.
From reporting for 2020:
- the obligation of organizations to submit declarations on transport and land taxes is canceled.
We wrote about these and other changes when the project was adopted in the third reading (see review).
Document: Federal Law of 15.04.2019 N 63-ФЗ
The order was registered with the Ministry of Justice on May 20. The amendments are related to amendments to PBU 18/02 and the Law on Accounting, according to which from 2020 the Federal Tax Service will form and maintain a special accounting base. The document comes into force on June 1. A number of provisions will need to be applied in reporting for 2020.
Consider what the new shapes look like.
General change for all forms
OKUD form codes are brought into line with the current edition of the Rosstandart order. OKVED is also replaced by OKVED 2.
Reports will need to be filled out only in thousand rubles. Unit of measure "million rubles." excluded from forms.
Changes in the balance sheet
A new line has appeared, in which it is necessary to indicate whether the organization is subject to mandatory audit. If so, then it will be necessary to give the name of the audit organization (full name of the individual auditor), her (his) TIN, PSRN (BINP).
Changes in the report on financial results
Line 2410 received a new name - "Income Tax". Lines 2421, 2430, 2450 are excluded from the form. New lines appeared:
• 2411 - “Current income tax”;
• 2412 - “Deferred income tax”;
• 2530 - “Income tax on operations the result of which is not included in the net profit (loss) of the period".
The aggregate financial result will now need to be defined as the sum of the rows:
• "Net income (loss)";
• "The result from the revaluation of non-current assets, not included in the net profit (loss) of the period";
• “Result from other operations not included in net profit (loss) of the reporting period”;
• "Income tax on operations the result of which is not included in the net profit (loss) of the period".
Changes in the report should be applied with the accounting for 2020. The organization has the right to decide to use them before.
Changes to the simplified financial results report
The line "Income taxes (income)" must include the current income tax and deferred tax.
Changes in the report should be applied with the accounting for 2020. The organization has the right to decide to use them before.
Document: Order of the Ministry of Finance of April 19, 2019 N 61n

Bank of Russia maintains key rate at 7.75% per annum

The board of directors of the regulator decided not to raise the rate. This was facilitated by the level of inflation. As the Chairman of the Bank of Russia noted in the report on monetary policy, its level was lower than expected. According to the results of 2019, it will most likely amount to 4.7-5.2%.
The next meeting at a key rate will be held on June 14. On it, the Central Bank of the Russian Federation can lower the rate if the situation in the economy remains favorable. Although, as you know, the regulator takes into account many factors, for example, the geopolitical situation, oil prices. Therefore, the final decision of the Central Bank is difficult to predict.
Document: Information of the Bank of Russia dated 04/26/2019

Ministry of Labor has prepared a schedule for transferring the weekend in 2020

The holiday project is currently undergoing public discussion.
New Year holidays will last eight days - from January 1 to 8.
The Ministry of Labor also planned long May weekends. First, five days - from May 1 to May 5, and then three more - from May 9 to 11.
Three days are allocated for the holidays:
- in February - from the 22nd to the 24th;
- March - from the 7th to the 9th;
- June - from the 12th to the 14th.
The shortest weekend can be the Day of National Unity. It will be celebrated one day - November 4.
Documents: Draft Decree of the Government of the Russian Federation ( https://regulation.gov.ru/p/91 )

Ulyanovsk project. Wind power is the future today.

With the help of our partner, the Fairvind RUS Company in the Ulyanovsk Region, the installation of the second wind farm - 14 wind generators with a total capacity of 50 MW has been completed. We are very pleased that our modest contribution is present in solving this difficult, modern and environmentally friendly task.

In the Ulyanovsk region, the installation of the second wind park was completed - 14 wind generators with a total capacity of 50 MW. Vestas wind turbines based on the platform V126-3.45 MW were used during construction. These are the first wind turbines in Russia that contain elements produced as part of the company's localization program for wind turbines: the nacelles were assembled in Nizhny Novgorod, the blades and the towers of the wind turbines were finished at the site of the wind park in Ulyanovsk. Vestas is a global technology partner of the joint Wind Energy Development Fund of the Finnish company Fortum and RUSNANO, which carry out the construction of the facility.
Simultaneously with the construction of a wind farm, a plant for the production of blades is being built. In the Ulyanovsk region, Westus Management Rus localizes the production of composite blades for wind turbines. The project partners are Vestas, RUSNANO and the Consortium of Investors of the Ulyanovsk Region, which includes the Ulyanovsk Nanocenter and the Region Development Corporation. The first blades will be produced in early 2019.
Sergey Morozov, head of the region: “In alternative energy, we see an opportunity not only to reduce dependence on hydrocarbon production, to reduce the burden on the environment, but also
diversify the economy, quickly increase the proportion of high-tech industries. And this is the most important strategic priority for the development of our state and our region. At the beginning of 2018, the first in the country industrial wind park with a capacity of 35 MW was commissioned in the Ulyanovsk Region. The construction of the second 50 MW wind farm began in the summer. And the installation of the wind farm is completed. Wind turbines of the new park will start generating energy in the first half of 2019.”
Alexander Chuvaev, Director General of UK Vetroenergetika LLC: “Completion of the installation of wind power plants is an important stage in the implementation of the Vetroenergetika UK project in the Ulyanovsk Region. A new wind farm will begin to produce clean energy in 2019. UVES-2 is the first sign of the large-scale investment program of the UK Wind Power Company, which provides for the construction of almost 2 GW of wind-generating capacity until 2023 "..
Alisher Kalanov, Chairman of the Board of Directors of Vetroenergetika Management Company: “We highly appreciate the active assistance of the management of the Ulyanovsk region in the implementation of investment projects in the field of wind energy. Next year, the first wind farm, built in the framework of the Fund for the Development of Wind Energy, will start work in the region. When creating a wind farm for the first time in Russia, the equipment of the world leader in the production of wind installations - the Danish company Vestas - was used. We are confident that the wind farm "RUSNANO" and "Fortum" in Ulyanovsk will become a model for more several regions where the Fund plans to launch new generating capacity using wind energy. ”
Kimal Yusupov, Director General of Westas Russia: “The timely and safe installation of the 14 wind turbines was made possible thanks to the coordinated and professional work of the team of the Wind Energy Development Fund and Westas. A distinctive feature of this wind park is the fact that we used components localized in Russia. The development of renewable energy in Russia is not only the commissioning of new energy facilities, but also the development of industry, education and science. ”

#Day_Withra with #Fortum #RES # Renewable Energy #General Energy 

We hope that our productive cooperation will bring new fruits in 2019!

The Ministry of Finance wants to introduce tough penalties for non-submission of accounting to the tax

From 2020, the FTS will form and maintain a special accounting base.
In the Code of Administrative Offenses of the Russian Federation they want to fix responsibility for the late submission of reports through this information resource, for its incomplete presentation and for violation of the submission procedure.
We note now responsibility is established only in the Tax Code of the Russian Federation for non-submission of reports on time. The fine is 200 rubles. for each unsubmitted document.
According to the project, if the accounting is not subject to audit, the penalty will be 50 thousand - 70 thousand rubles. for officials and 100 thousand - 200 thousand rubles. for legal entities. If an audit is required, the fine will be 80 thousand rubles - 100 thousand rubles. for officials and 300 thousand - 500 thousand rubles. for legal entities.
They want to provide for separate responsibility for failure to submit documents by December 31 of the year following the reporting year. Penalties may be in the following sizes:
- 80 thousand - 100 thousand rubles. for officials and 200 thousand - 300 thousand rubles. for legal entities, if accounting is not subject to audit;
- 100 thousand - 200 thousand rubles. for officials and 500 thousand - 700 thousand rubles. for legal entities, if an audit is required.
Changes should take effect on January 1, 2021.

Companies want to be allowed to pay between themselves with electronic money

According to the project, it will be possible to send B2B transfers through corporate electronic means of payment (wallets). Such an opportunity will appear in the PI.
Now companies and individual entrepreneurs can receive electronic money, but they can only send it to individuals. Thus, the specified transfers between legal entities and SP are prohibited.
Recall to use a corporate wallet is allowed if there is no more than 600 thousand rubles in it. (including when recalculating the amount in foreign currency).
Document: Draft Federal Law N 603192-7 (http://sozd.parliament.gov.ru/bill/603192-7)
Submitted to the State Duma on December 7, 2018

You can pay taxes for third parties on the website of the Federal Tax Service

Tax officials launched the service "Payment of taxes for third parties."
According to the Federal Tax Service, with its help, you can quickly and correctly prepare bills and transfer money. Service can use and companies. If desired, even managers have the right to repay the tax liabilities of organizations at their own expense.

When an employer pays for the delay in issuing a work record: the practice is still ambiguous

St. Petersburg City Court charged more than 500 thousand rubles from the company, because she did not give the former employee a work record in time.
The court did not require from the employee evidence that he could not get a job because of the lack of employment record. It is enough the organization’s fault that it did not issue the book on time.
Note that in earlier practice, the St. Petersburg City Court supported the decision of the first instance, which took a different position. For compensation, the former employee had to confirm that he was trying to find a job, but was refused due to the lack of a work record.
So that you do not have to pay compensation to the dismissed employee, hand in the employment record on the day of termination of the employment contract. If you don’t get your hands on it, send a notification about the need to pick it up.

Deputies voted in the third reading for raising the minimum wage

From 2019 the minimum wage will be 11,280 rubles. per month. Now the "minimal salary" is equal to 11,163 rubles.

Ministry of Labor finalized projects on electronic workbooks

The ministry decided to abandon the idea to complete the transition to electronic format by 2027.
The following scheme was originally proposed:
- since 2020, employers are simultaneously electronic and paper workbooks;
- from 2021 they begin to gradually move away from the usual format;
- since 2027, paper books have finally stopped being kept.
Now the Ministry of Labor does not name the final date of transition to the electronic version. After January 1, 2021, two book formats will remain for employees who have filed an application about this. For those who first come to work from January 1, 2021, only electronic format will be used.
When finalizing, the Ministry of Labor also clarified how often it is necessary to send information to the FIU. Previously it was planned that in 2020 it would have to be done monthly, and from 2021, every time after changing information about the employee.
Now it is not proposed to make the dates dependent on the calendar year. The data will need to be submitted on a monthly basis, with the exception of information on admission or dismissal. It will need to be reported to the FIU no later than the next business day after the issuance of the relevant order.

The government wants to increase the marginal base for contributions for 2019

It is assumed that the following limits will be effective from January 1:
- 865 thousand rubles. - for contributions to VNiM;
- 1150 thousand rubles. - for pension contributions.
In 2018, the limit values of the base are equal, respectively, to 815 thousand and 1021 thousand rubles.
Document: Draft Resolution of the Government of the Russian Federation
(public discussion ends October 8, 2018)

Tax officials plan to update the transport tax declaration

According to the project, the revised form will need to be submitted starting with the report for 2019.
There are no significant changes in the form. Going to change bar codes only.
There are technical changes in the order of filling the declaration. They were needed due to the fact that from 2019 they will cancel the deduction for heavy trucks. For such machines will need to make advance payments.
In addition, they plan to slightly clarify the codes of the types of vehicles, as well as benefits and deductions.
Document: Draft Order of the Federal Tax Service of Russia
Public discussion ends October 11, 2018

We begin to plan holidays for 2019 - the schedule for the transfer of holidays is approved

New Year holidays will last 10 days - from December 30 to January 8.
Celebrate Defender of the Fatherland Day is scheduled for February 23 and 24.
International Women's Day will be able to celebrate a little longer - from 8 to 10 March.
May will be rich on holidays. In the first week we rest from May 1 to May 5, in the second - from May 9 to 12.
We will celebrate the Day of Russia in the middle of the week - June 12th.
In November, we will rest for three days - from 2 to 4 November.
For clarity, we recommend using the production calendar for 2019.
Document: Resolution of the Government of the Russian Federation of 01.10.2018 N 1163 (enters into force upon the expiration of seven days after the day of official publication)

The form on which you want to notify about the exemption from VAT, they want to update

The Ministry of Finance has planned on January 1, 2019, instead of one form on VAT exemption, to make two:
- one for those who use the UAT;
- another - for all others.
The amendments can be called technical.
They were needed due to the fact that from the new year, the UAT payers will have to pay VAT. Producers of agricultural products will be able to take advantage of the exemption.
Document: Draft Order of the Ministry of Finance
(public discussion ends October 22, 2018)

The Ministry of Finance has allowed to indicate in the tickets already VAT at a rate of 20 percent

In the tickets that are issued in the current year for travel in 2019, you can specify VAT on additional services at a rate of 20%. The Ministry of Finance believes that this is not contrary to tax legislation.
It is, for example, food or bedding in trains.
Document: Letter of the Ministry of Finance of Russia dated 09/18/2018 N 03-07-11 / 66752

FTS is planning to update the VAT return

The tax authorities have prepared a draft that changes the form of the VAT return, the procedure for filling it out and the format. Adjustments were required due to changes in legislation, including increases in the VAT rate.
It is planned that the order will come into force in the first quarter of 2019.
Read more about the project in our material.
Document: Draft Order of the Federal Tax Service of Russia (public discussion ends October 30, 2018)

CTC innovations were made: purchases for cash, advances, loans, checks, corrections.

In the evening of July 3, a law was published with important amendments to online cash registers. If on that day you worked under the old rules, promptly make adjustments and inform the tax authorities about the violation within three working days. This will help to avoid a penalty.
Let's remind, the basic innovations concern:
- purchases by organizations and IP of goods, works, services for cash or by bank card;
- payment, offset, return of advances;
- issue and repayment of loans;
- requisites of checks;
- application of the correction check;
- reception of non-cash payment from physical persons;
- settlements through vending machines.
 

  Document: Federal Law of 03.07.2018 N 192-FZ (entered into force on July 3, 2018)

Form 2-NDFL plan to change.

The Federal Tax Service introduced a new form of information on personal income and the amounts of personal income tax for discussion. If the draft order is approved, then it will be necessary to submit information on the new form for 2018.
Changes in comparison with the current form are insignificant. In the new help they change the barcode. The number of sections will be reduced from five to three. The data currently reflected in Section 1 will need to be shown in the header of the help form, and the decryption of income information and the corresponding deductions for the months of the tax period will be made in a separate application to the certificate.
It will no longer be necessary to indicate the TIN in the country of citizenship. Instead of the fields "Notification confirming the right to social tax deduction", "Notification confirming the right to property tax deduction", "Notification confirming the right to reduce the tax on fixed advance payments", new fields are provided, including "Notification type code".
 

  Document: Draft Order of the Federal Tax Service of Russia (public discussion ends on July 26, 2018).

The Ministry of Finance announced the tax plans for the next three years.

The Office prepared a draft tax policy for 2019-2021. Many initiatives already have documents that the State Duma is considering. Let's talk about the most important proposals.
Payment of taxes
It will be possible to clarify the account to which the mandatory payment was erroneously transferred.
The amount of accrued interest should not be greater than the arrears to which they were charged.
Tax inspections
The number of Russian controlled transactions is planned to be reduced.
VAT
They propose to increase the basic rate of VAT from 18 to 20%. All lowered rates will remain.
They want to conduct a chamber inspection of VAT for two months, and not for three.
Reimbursement of VAT is planned to be made more accessible. To do this, lower the threshold for the amount of taxes listed - one of the criteria for the right to refund VAT in a declarative manner
reimbursement of VAT.
It will not be necessary to submit transport documents with customs officials' notices about the export of goods from Russia to confirm the zero VAT rate.
Income Taxes
The distribution of the profit tax between the budgets at the rate of 3% to the federal budget, and 17% - to the regional ones is proposed to be extended until 2024.
The amount of excess of the value of property, which is received during liquidation, is planned to be equal to the contribution to the authorized capital to dividends.
USN
It will be possible not to file a declaration for the USN with the object "income", if you use the online cashier.
They want to simplify the recognition of expenses for fixed assets, the rights to which must be registered. It will not be necessary to confirm the filing of documents for state registration. In addition, it is proposed to register for entrepreneurs how to determine the residual value of fixed assets.
Corporate property tax
On movable property offer not to pay tax. According to the agency, this will help taxpayers to upgrade their machinery and equipment.
Insurance premiums
The provisional tariff of pension contributions is planned to be made permanent. We are talking about a rate of 22% from the limit base and 10% above it.
Are going to release from the contributions compensation for the cost of travel on vacation family member of an employee who works in the Far North. Now, in order not to pay contributions, the employer needs to buy tickets for the family members of employees.
Excises
It is planned to index excise taxes for 2021 on the level of inflation. According to forecasts, it will be 4%.
State fee
The state fee for electronic registration of legal entities and IP want to be reset.

Document: Draft guidelines for budget, tax and customs tariff policy.

Increased tax on cars pay, even if its description in the list of expensive cars and the traffic police is different.

The Federal Tax Service reminded that it does not matter how the model (version) of a particular brand is described in the list of expensive cars - less or more volumetrically than in the information of the State Traffic Safety Inspectorate. The transport tax must be calculated with an increasing coefficient. The Office has already expressed this opinion.
Let us explain with an example. In the list the model is described as follows: "Mercedes-Benz S 400 4MATIC long base" with engine capacity of 2996 cu. see The tax will have to be paid in an increased amount, despite the fact that there is no word "long base" (Mercedes-Benz S 400 4MATIC with the engine capacity of 2996 cubic cm) in the certificate of car registration.

  Document: Letter of the Federal Tax Service of Russia No. BS-4-21 / 6138 dated 04/02/2018

Buffet for employees: whether to pay contributions and personal income tax.

If you organized a buffet for employees on a holiday or on regular working days, then pay fees from the cost of food and calculate personal income tax. The income of each employee is determined by dividing the cost of food by the number of people. This approach was suggested by the Ministry of Finance. About NDFL department has already expressed a similar opinion.
Let's note, financiers considered a concrete situation, to us, unfortunately, not known, and decided that in that case it is possible to determine the benefit of each employee.
Usually it can not be done for a buffet style meal. After all, you can not determine exactly how much the employee ate. In such a situation, there is no question of paying personal income tax. The approach corresponds to the position of the RF Armed Forces. For contributions, this rule also works: it is not known from which amount to pay them.
If you do not charge personal income tax and contributions, assess the risks of claims of controllers. They can calculate that the benefit of each employee is known.

  Document: Letter No. 05-04-06 / 33350 of the Ministry of Finance of the Russian Federation of 05.05.2018.

The government began to work on a phased increase in the retirement age.

They want to start the transition in 2019 already. Every year, the retirement age is planned to be increased by half a year. As a result, for men it should reach 65 years by 2028, and for women - 63 years by 2034. Apparently, soon the corresponding bill will be submitted to the State Duma.
Now the retirement age is:
- 60 years for men;
- 55 years for women.
For employers, the proposed innovations may mean that there will be less and less work for retired workers every year.
We will remind, under the agreement with the pensioner on age it is admissible to conclude with it the urgent labor contract. And the worker-pensioner has the right to take up to 14 days a year as a leave without saving wages. The employer must provide such leave.

The government proposes to raise the VAT rate to 20%.

The Prime Minister said that the rate will raise from 18 to 20%. At the same time, exemption from VAT and reduced rates for major socially important goods and services will not be canceled.
 

  Document: Transcript of the Government Meeting (http://government.ru/news/32873/)

The State Duma was offered to significantly increase the duty for issuing a new generation of passports

It is planned that for issuing a passport with an electronic media, it will be necessary to pay 5 thousand rubles. Now the state duty is 3.5 thousand rubles.
To get the same passport for a child under 14 years of age, instead of 1,5 thousand rubles. give 2,5 thousand rubles.
The bill also introduces a state duty for issuing documents that can be obtained in the form of a plastic card with a microchip: for a certificate of registration of the vehicle - 1,5 thousand rubles., For a national driver's license - 3 thousand rubles.
Document: Draft Federal Law No. 451536-7 (http://asozd.duma.gov.ru/main.nsf/(Spravka)?OpenAgent&RN=451536-7)

The Central Bank of Russia did not change the key rate

The key rate will remain at the level of 7.25% per annum. In this sense, it has been operating since March 26.
Next time the Central Bank of the Russian Federation will consider the issue of the level of the main indicator of monetary and credit policy on June 15.
Document: Information of the Bank of Russia dated 04.27.2018 (http://www.cbr.ru/press/PR/?file=27042018_133000key.htm)

Since May 14, the control over currency transactions will be strengthened

Three major changes:
- companies will have to inform banks about the exact, but not the maximum terms of receipt of proceeds or goods on foreign trade transactions;
- banks will have more reasons to block operations;
- for a number of violations, the fine threatens not only organizations, but also officials. If the violation is repeated, the perpetrators may lose their jobs for three years.
Document: Federal Law of 14.11.2017 N 325-FZ (effective from May 14, 2018)

The Ministry of Labor explained how to transfer an employee to another position during a childcare leave

The Board will help in the situation when the employee agrees to transfer, but is on parental leave, and in his place a fixed-term employment contractor works.
In this case, the main employee should interrupt the leave, in connection with which the replacement is waiting for dismissal.
After processing the transfer, the principal employee can resume the leave to take care of the child. At the same time, it is permissible to conclude a new fixed-term employment contract with a replacement employee.
Note that the algorithm does not work if the primary employee does not want to interrupt the specified vacation. As Rostrud previously noted, there is no provision for withdrawing it from the law, it is enough to just receive a transfer application.
However, it should be borne in mind that the transfer of the main employee without leaving his leave has consequences. The condition about the urgent nature of the work of the substitute employee becomes invalid. That is, the contract with him is transformed into an agreement for an indefinite period.
Documents: Letter of the Ministry of Labor No. 14-2 / ​​B-191 of March 21, 2013

From June 1 on the site of the tax service it will be possible to find additional information about the companies

Service of the Federal Tax Service for the verification of counterparties was due to be made on July 25, 2017, but the agency postponed its launch on June 1, 2018.
Among the open information you can find information:
- on arrears and arrears on penalties and fines;
- tax offenses and liability for them;
- special tax regimes;
- participation in the consolidated group of taxpayers;
- the average number of employees, paid taxes and fees, income and expenses of the company on financial statements.

Labor and May: recall how much work and rest in connection with the upcoming holidays

Employees with the "five-day" waiting four days of rest from April 29 to May 2. However, before this, it will be necessary to work on Saturday - April 28.
Such a layout became possible due to the transfer of output:
- on April 30 - from April 28;
- on May 2 - since January 7.
On Victory Day there will be one day of rest - Wednesday, May 9.
On April 28 and May 8, it is necessary to work for an hour less than usual.
Document: Resolution of the Government of the Russian Federation No. 1250 of October 14, 2017 (entered into force on October 26, 2017)

Property tax: The Ministry of Industry suggested what equipment is related to movable property

The equipment of industrial enterprises, listed in section 330.00.00.00.000 OKOF, can not be attributed to real estate, even if it is fixed on the foundation. This conclusion of the Ministry of Industry and Trade tax specialists have adopted. We believe that they will use it, assessing the legality of the calculation and payment of property tax on objects that previously fell under the federal privilege for movable objects.
Organizations that have equipment from the mentioned section (for example, lathes) can be calm: they do not have to prove to the inspectors that the machine is movable property.
Documents: Letter of the Federal Tax Service of Russia of 28.03.2018 N BS-4-21 / 5834 @

The employee changed his passport after the deposit of 2-NDFL - you can give him a certificate with new data

The organization may not worry that the inspection contains a certificate of 2-NDFL with obsolete employee data (for example, the series and the number of the old passport). You can issue a certificate to the employee with new data, the Federal Tax Service said.
In this situation, you do not need to specify the reporting already submitted.
Please note: if you are going to file a correction certificate for other reasons, you will have to specify the employee's new data in the update.

UTII for the I quarter: consider the new size of the coefficient K1

The federal coefficient-deflator K1 was increased for the first time since 2015. Now it is 1.868 (increased by 4%). Do not forget to check if your K2 coefficient has changed in your area.

With a monthly premium, personal income tax is paid in the same way as with a salary

According to the Ministry of Finance, personal income tax with monthly premiums, which are part of the pay (for example, for production results), should be calculated on the last day of the month for which the premium was paid. They withhold the tax at the actual payment, but transfer not later than the next day. The Office has already expressed this opinion. The FTS agrees with him.
For example, the production award for March is paid on April 25. In this case, the organization must:
- Calculate personal income tax as of March 31;
- to keep - on April, 25th;
- transfer - no later than April 26.
Please note that the date of actual receipt of income for quarterly, annual premiums is determined on the date of their actual payment. The same applies to bonuses that are not related to production results (for example, to the jubilee).
Document: Letter No. 03-04-06 / 18932 of the Ministry of Finance of the Russian Federation of March 26, 2013

Rostrud launched the first social network in Russia for business contacts

Societe SkillsNet http://skillsnet.ru/ - part of the largest base of vacancies Work in Russia http://trudvsem.ru/. In the new Internet service, their profiles can be found in companies-employers, universities and directly specialists themselves. More than 500 thousand employers have already joined SkillsNet.
The social network provides for communication on thematic groups. It will allow you to discuss news and share information in various areas of professional interests. SkillsNet is also designed to accommodate and search for information about vacancies and internships, feedback on employers.
As the head of Rostrud notes, SkillsNet will be the best social networking site for professional contacts.

Transfer of an employee between separate subdivisions: how to pay personal income tax and file accounts.

Transfer of an employee between separate divisions: how to pay personal income tax and file accounts
The Federal Tax Service disclosed the nuances of transferring the tax and presentation of the 6-NDFL, when the employee is transferred from one unit to another. At the same time, isolated subdivisions are registered in the territories that belong to different OCTMOs.
Salary payment
The organization may encounter a situation when the employee worked in the first half of the month in one separate unit, and in the second half in another. Salary for the month is calculated at the end of the month.
The FTS clarifies that the personal income tax on the income of such an employee should be transferred to the budgets at the location of each separate subdivision. Of course, the amount of tax should be calculated on the basis of the revenues actually received from the relevant unit. In addition, you need to file two calculations of 6-NDFL at the location of each separate unit.

A fine may not exist if the legal entity has received a demand for an explanation of the declaration.

Directing a taxpayer to submit a clarification to the declaration does not indicate that the controllers found an error in it. Detection of inaccuracies that lead to non-payment of tax is confirmed by an act of tax audit. This means that the organization can pay the missing amount with penalties and submit an updated declaration, even having received a demand to clarify inconsistencies. Penalty for non-payment will not be. The main thing is to have time to do everything before drawing up the act. This conclusion follows from the letter of the Federal Tax Service.
We believe that the position concerns penalties for the following violations:
- gross violation of the rules of accounting for incomes, expenses and objects of taxation, which resulted in understating the tax base;
- failure of the tax agent to maintain or transfer tax.
Note that the Armed Forces of the Russian Federation recognized that the fine was lawful in a situation where the taxpayer eliminated violations after the controllers sent him reports of discrepancies in the declarations. Organizations should take into consideration the considered letter of the Federal Tax Service. It is not worthwhile to count on the fact that it will help in court in connection with the said position of the RF Armed Forces. However, when appealing to a higher tax authority, it can be useful: it may be possible to avoid a fine.
Document: Letter of the Federal Tax Service of Russia of 21.02.2018 N CA-4-9 / 3514 @

Tax specialists have corrected 2-NDFL, ruled her fillings and a format

Since February 10 it will be already necessary to hand over references for 2017 in the changed form. Main reason for innovations: to give the chance to report to assignees of tax agents. In the document there are also other specifications.

The president has introduced in the State Duma the bill of minimum wage rate increase to a living wage since May 1.

The document provides that the minimum wage rate will make 11 163 rub a month.
Document: Draft of the federal law (http://asozd2.duma.gov.ru/main.nsf / (Spravka)? OpenAgent&RN=374313-7)
It is brought in the State Duma on January 26, 2018

Since February the sizes of children's grants have exchanged.

For 2,5% the grant size has grown at registration in early terms of pregnancy (to 628,47 rub), grants at the birth of the child (to 16759,09 rub).
Indexation concerns also the minimum size of a monthly grant on care of the child. On the second child the grant became more at all (6284,65 rub), on the first - only at those who has gone to a child care leave till January 1 (a new minimum - 3 142,33 rub).
Document: The resolution of the Government of the Russian Federation of 26.01.2018 N 74 (has come into force on February 1, 2018)

Increase in the deflator coefficients for UTII and trade fees for 2018.

The Ministry of Economic Development plans to increase the deflator coefficients for 2018 There are such values of deflator coefficients:
- 1,868 - for the UTII. Now it is 1,798;
- 1,285 - for the trade fee. Now it is equal to 1,237.
The project has a deflator coefficient for the USN, but this indicator is not applied in 2018. The fact is that the legislator "froze" the indexation of income limits for the transition to the USN and for the loss of the right to use this special regime.

Charging contributions to the sickness benefit, which the FSS did not take.

The sickness allowance, which the FSS did not absorb, must be assessed.
Payments to the employee in such a case are not recognized as a temporary disability allowance and in connection with maternity, therefore they are not exempted from contributions. The Federal Tax Service sent this explanation to the Ministry of Finance for inspections.
A similar conclusion was made by the Ministry of Labor on the basis of the Law on Insurance Contributions.
Judicial practice until 2017 was controversial. In one refusal, the RF Armed Forces supported the controlling bodies, in the other - the legal entity.

Document: Letter of the Federal Tax Service of Russia of 22.09.2017 N ED-4-15 / 19093

Will there be a privilege on movable property for all legal entities in 2018?

The government wants to keep the privilege on movable property for all legal entities for another year.
As of January 1, 2018, as of January 1, 2019, they are planning to postpone the date when the tax on property tax will be applied only by decision of the regions.
Without these amendments on the territory of the constituent entities of the Russian Federation, which did not issue the relevant laws, the benefit can not be applied from next year. This means that for movable property, taken from January 1, 2013 to register as a fixed asset, will have to pay tax.
Document: Draft Federal Law No. 274631-7 (http://sozd.parlament.gov.ru/bill/274631-7)

Introduced to the State Duma on September 29, 2017

The updated invoice form is mandatory for all legal entities in all cases.

The Ministry of Finance warned legal entities against drawing up invoices according to the old form.
You need to use the updated form, even if the organization does not fill in the rows or columns that appeared in the form after the changes. This conclusion follows from the letter of the department.
Invoices and adjustment invoices must be submitted according to approved forms, the Finance Ministry recalls. It is impossible to exclude rows and columns from forms independently.
Whether it will be possible to get a VAT deduction, if the invoice is made according to the old form, the agency does not explain. According to the Tax Code, the inspection should not refuse a deduction, if it can identify the seller, the buyer and determine other requisites for the invoice required for the application of the deduction. Therefore, if a legal entity still declared a deduction under the old form, which contains such indicators, there is a chance to defend the right to it in court.

Document: Letter No. 03-07-09 / 57881 of the Ministry of Finance of the Russian Federation of 08.09.2017

Exemption from the payment of personal income tax amounts of material assistance at the birth of a child.

The issue of exemption from personal income tax for amounts of material assistance for the birth of a child has been withdrawn.
The tax does not need to be paid from the amount that does not exceed 50 thousand rubles. for each child and paid within a year from the date of birth. A non-taxable limit applies to each parent, the Finance Ministry notes.
The Federal Tax Service sent explanations to the Ministry of Finance for inspections.
A similar opinion was expressed by the financial department in August.
In 2013, the Federal Tax Service considered that the exemption should be applied to one of the parents of their choice or to two, but based on a total amount of 50 thousand rubles.

Documents: Letter of the Federal Tax Service of Russia of 05.10.2017 N DG-4-11 / 20041

Indexing of the child benefit from 01.02.2018.

Ministry of Finance: can VAT be applied if the building is put into operation after transition from USN to OCH?

If the company that built the building was on the USN with the "revenue" object, when switching to the general regime, it is impossible to deduct the "input" VAT. With the object "income minus expenses" this can be done. So says the financial department.
In 2015, the Ministry of Finance believed that the organization on the USN with the object "income" is entitled to apply the deduction of VAT after switching to DOS. This position was recently cited by the AU of the Urals District.
In its new explanation, the Ministry of Finance supported the view shared by the RF Constitutional Court, the Federal Tax Service, and the Russian Armed Forces in the refusal.
Therefore, the organization that moved from the simplified tax system to the "revenue" object for the general regime is unlikely to be able to withhold VAT deduction in this situation.
Document: Letter No. 03-07-11 / 56374 of the Ministry of Finance of the Russian Federation of 01.09.2017

The minimum wage is raised to the subsistence level

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 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

Russians will Open a Chocolate Factory in Jelgava

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.

The Turnover of the Fishing Industry will Drop by at Least 50%

The drop in the fishing industry's turnover in Latvia will be not less than 50% this year – such a forecast was expressed by the Chairman of the Board of the Latvian fish processing plant Brīvais Vilnis Arnold Babris to the BNS Agency.

“Everyone will incur losses and the general fall in will be not less than 50% turnover in the industry, it is more than a year earlier. Already in the summer months we will stand and no one knows what will happen in the future”, he said, recalling that almost all fishing enterprises seasonally and temporarily stop working in the summer - in June, July and August.

All fishing enterprises, which will go on summer vacation, have the stored up goods for the execution of orders in the warehouses, added Babris. “Usually the summer months are a rather empty period, as in the heat, people usually consume less canned fish, especially in the southern regions. The greatest consumption is of sprats, he said.

Many fishery managers have already reduced production capacity, said Babris. “Now companies are working at low capacity - not more than by 50% of the actual. Some of them have even worse situation”, he said.

The situation has not changed significantly in recent months and currency devaluation still has a negative impact on consumption within the traditional sales market for fishery managers - in the CIS countries.

As previously reported, Rosselkhoznadzor banned the import of fish and canned fish from Latvia and Estonia starting from June 4, 2015. The reason for this was violation of veterinary-sanitary requirements identified by veterinarians.

The Latvian Lido Plans to Open 100 Restaurants in Germany in Five Years

Latvian catering company Lido plans to open 100 restaurants in Germany in five tears, said to journalists its representatives on Tuesday.

Also, Lido plans to open restaurants in Austria and Switzerland.

As previously reported, Lido invested 3 million euro in the opening of the first two restaurants Kirsons restaurants and production in Berlin.

Both Kirsons restaurants in Berlin are scheduled to open on Wednesday, May 18.

In 2014, Lido's turnover amounted to 33.158 million euro - by 11.6% more than in 2013, losses – 889.000 euro.

The main business areas of Lido are catering, processing of meat products, processing of fish products, production and sale of semi-finished products. The owner of the company is the Latvian businessman Gunars Kirsons.

The Advertising Market in the Baltic States Increased by 3% in 2015

Last year, the advertising market in the Baltic States increased by 3.1% - up to 270.9 million euro, according to the data of market analysis conducted by marketing research and media monitoring companies TNS in Lithuania, Latvia and Estonia.

The majority of the funds - 101.1 million euro were generated by the Lithuanian advertising market. The advertising market of Estonia (92.6 million euro) was on second place, the third - in Latvia (77.2 million euro).

If we compare the amount attributable to advertising per one resident of a country, Estonia is leading here. In this country, 70.5 euro of advertising investments are attributable per one resident of the country, in Latvia, this amount is 38.9 euro, in Lithuania - 34.6 EUR.

Also, Estonia is the leader in the terms of the share of GDP spent on advertising in the media. Here 0.45% of GDP, in Latvia - 0.32%, in Lithuania - 0.27% is spent on advertising in the media.

20.9 Million Euro will be Allocated to Increase the International Competitiveness of Latvia in the Field of Tourism

Starting from Monday, the Investment and Development Agency of Latvia (LIAA) begins to conclude the contracts to provide support in the framework of the project “Promoting of the International Competitiveness of Latvia in the Field of Tourism”.

As reported by the LIAA, available funding amounts to 20.958 million euro, aid intensity - 80%. Applications will be accepted until December 31, 2023.

Representatives of the tourism industry can receive support to participate in international exhibitions, carry out presentations or demonstrations of stands at international conferences and seminars related to tourism.

Support measures may be provided if the product is offered in the priority sectors of tourism and meets the relevant criteria, such as business tourism, wellness tourism.

The merchants may qualify for the support meeting the status of conducting of micro, small and medium business, the societies, where at least five merchants came together or cooperative societies, as well as the societies, if the number of founders includes at least five merchants or cooperative societies.

The cost support in the framework of the program is provided from September 1, 2015, but supporting documents should be submitted until July 31 of this year. With regard to activities carried out after May 1 this year, the documents must be submitted no later than within hree months after their completion.

Microsoft Invented the “Infinite USB Flash Drive”

The Microsoft Corporation found a way to create a data storage device that can store a virtually unlimited amount of information for any long period, reports The Next Web.

The storage of new type will be based on 10 millions of long oligonucleotides with DNA molecules. The company Twist Bioscience was a provider of “material”.

According to the representatives of Microsoft, only 20 grams of molecules allow you recording all digital data generated to date on such a “USB flash drive”. Thus, they can be read even after several thousand years.

Coding of information in the new drives will be carried out using not two bits, but four ones. Nucleotides will act as bits - A, C, T and G.

The Next Web points out that the cost of technologies required to work with the DNA has declined substantially in recent years. So, in 2003, in order to decipher the human genome consisting of about three billion nucleotides in length, the researchers spent more than a billion dollars on research. Now, reading the DNA is about a thousand dollars, the newspaper writes.

46.3 Million Euro from the Swiss Cooperation Program was Invested in the Latvian Economics

46.3 million euro from the Swiss Cooperation Program was invested in the Latvian economics, according to the Ministry of Finance.

On Thursday, the 8^th annual meeting in the framework of cooperation of Latvia and Switzerland was held in the Ministry of Finance. The participants acknowledged that Latvia has successfully managed to achieve and even exceed the planned results. 46.3 million euro or 89% of available funding under the program was invested in the national economy of Latvia. Swiss experts highly evaluated post-project supervision in Latvia, noting that it could serve as an example for other recipient countries of Swiss co-financing.

Financing from the Program of cooperation with Switzerland in the amount of nearly 49 million euro is available from 2007 in Latvia. 12 projects in such areas as regional development, the modernization of vessels, improvement of the environment, support of the private sector and the NGO sector, education and research, financial sector regulation and access to finance were implemented with the support of the program in Latvia.

Latvia is consistently ranked among the leaders among 12 beneficiary countries of the Swiss co-financing, said the Ministry of Finance.

The decision related to the next stage of Cooperation program of Latvia and Switzerland can be made in the second half of 2017 as a result of the positive outcome of the negotiations between the Swiss Government and the European Commission.

German Investors Expect to Increase the Turnover in Latvia This Year

This year, German investors expect to increase the turnover in Latvia and every second company working in the country with German capital expects growth in export, according to a survey of the German-Baltic Chamber of Commerce in Lithuania, Latvia and Estonia (AHK).

According to the Executive Director and Member of the Board of AHK Florian Schroeder, 1097 enterprises with German capital are currently registered in Latvia, but the most important investment fields are mechanical engineering, woodworking and metalworking. The German capital is included in such enterprises as AKG Thermotechnik Lettland, Valmieras stikla šķiedra, Zieglera mašīnbūve, Rettenmeier Baltic Timber, Kurzemes Atslēga-1.

According to the words of Schroeder, the general mood of German investors has become more positive. A year earlier, the biggest fear was associated with geopolitical events in the world, especially in Russia, but now the mood has improved and investors are hoping for positive development of the business.

“Of course, the Russian embargo and the fall of the rouble affected all types of businesses, but the Germans are pragmatic and never focus on business only in one country, but other markets are found instead of Russia”, said Schroeder.

65% of the enterprises surveyed predict a positive development of business this year, but two-thirds expect to increase turnover, and it is for 22 percentage points more than last year.

The number of enterprises that rely on the positive development of exports has doubled compared to last year, and the result is better than in Latvia and Lithuania.

Also, respondents expressed growing appreciation of business environment in Latvia compared with other countries in Central and Eastern Europe. Latvia takes the second place among the 20 most attractive countries for investors, and only Estonia was rated even higher.

At the same time, there are aspects that have not improved in comparison with 2015, in particular, the transparency of the building tenders and qualification of workers. A third of respondents are dissatisfied with vocational education system in Latvia.

A Number of Events for the Development of Economic Cooperation between Latvia and Belarus will be Held This Year

This year, a number of events for the development of economic cooperation between Latvia and Belarus will be held, as reported in the Ministry of Economics.

The Minister of Economics Arvils Ašeradens discussed topical issues of bilateral economic cooperation and the events scheduled for this year with the Ambassador of Belarus in Latvia Marina Dolgopolova on Friday.

Ašeradens expressed his satisfaction related to active economic dialogue and cooperation between Latvia and Belarus, as well as in connection with the abolition of EU trade restrictions in regard to Belarus, which would be a significant turning point in the expansion of bilateral economic cooperation.

Latvia cooperates with Belarus in the field of trade, transit and logistics, tourism, light industry, etc. Prerequisites for successful cooperation include geographic proximity and extensive contacts of businessmen, as well as different formats of cooperation - the Belarus-Latvia Intergovernmental Commission, the Latvia-Belarus Business Cooperation Council, the Latvian foreign trade representation in Belarus.

The Minister welcomed the plans of Belarus to strengthen bilateral economic cooperation, proposing to extend it also to the field of information and communication technologies, education and science, energy efficiency.

During the meeting, they discussed the possibility to hold the Latvian-Belarusian business forum in Riga in the autumn and the Ambassador offered include the areas such as transport and logistics, IT, trading in the commodity exchange, finance and loans.

In the autumn, the Days of Latvia in Belarus will be organized. This year, it is planned to organize a number of trade missions to Belarus for Latvian companies working in the fields of transport, tourism, engineering and health. It is scheduled to hold the 12^thmeeting of the Belarus-Latvia Intergovernmental Commission on economic, scientific and technical cooperation issues in Belarus.

Belarus takes the fourth place among the foreign trade partners of Latvia outside the EU - after Russia, China and Switzerland. In 2015, trade volume between the two countries amounted to 522.4 million euro – for 7.6% less than in 2014. Latvia has a negative balance of trade in goods and services with Belarus.

According to the data of LLC “Lursoft”, there are 2263 enterprises with Belarusian capital working in Latvia. According to the Bank of Latvia, the Belarusian direct investment in Latvia amounted to 25.3 million euro, while the Latvian in Belarus - 50.9 million euro at the end of 2015.

„Statoil”: the SRS Becomes More Friendly to Entrepreneurs

The company “Statoil Fuel&Retail Latvia” positively evaluates the work of the State Revenue Service (SRS), because there are several fields, in which the SRS became much friendly to entrepreneurs, said the Executive Director of “Statoil Fuel&Retail Latvia” Gunta Jekabsone.

The improvements relate to, for example, submission of electronic documents, communications, risk analysis, the assessment of which companies should be subject to in-depth audit.

“I think that the SRS copes with its tasks. In recent years, the trend is positive", said Jekabsone.

“Good initiative is the White List. The benefits are small, but the administrative burden for those who are in this list is great. It is rather a question of prestige. But it is also a step forward in cooperation with honest businessmen. I hope the following steps will be taken”, said a businesswoman.

The Companies from Lithuania and Estonia Lead in the List of the Largest Companies of the Baltic States

The retail companies dominate in Latvia in the list of 500 largest companies, industrial companies in Lithuania have no equal competitors, but Estonians are strong with shipping companies growing at the expense of the Latvian side, according to a study conducted by the Lithuanian business newspaper Verslo zinios together with the Latvian Dienas bizness and Estonian one Aripaev.

In the hands of the five largest companies, such as Orlen Lietuva, Maxima LT, Ericsson Eesti, Uralchem Trading and Tallink Grupp is concentrated 10% of the total turnover of the 500 largest companies, but the 50 largest enterprises of the region concentrate at about 30% of the revenues of all companies from the list, according to the results of 2014.

Exactly half of the sales give trade sector companies in Latvia. In Lithuania, contribution of that sector is 40%, in Estonia - 44%. Particularly brightly are distinguished industrial enterprises in Lithuania, whose total income amounted to a substantial share of total revenues in 2014 - 35%. In Latvia, the share of sales in this sector was 12%, in Estonia - 19%.

The Court Found the Latvian Bank “Trasta komercbanka” to be Liquidated

The Riga Vidzeme District Court decided to admit the JSC “Trasta komercbanka” to be liquidated on Monday.

A sworn attorney Ilmars Krums is appointed by the bank to be the liquidator of the bank. The verdict of the court is final and not subject to appeal.

While the appeal of revocation of a license is not considered by the bank, the court, liquidating the bank, artificially deprives it of the opportunity to implement its rights, said the representative of “Trasta komercbanka” Christa Kreizberga-Neya in the court. She reiterated that the liquidation of the bank “cuts off” many things, provided for by legal acts of the EU.

The representative of the Financial and Capital Market Commission (FCMC) Ieva Berroni explained that we are talking about the terms in this process - even if the proceedings on the liquidation of the bank would be postponed, the bank has been revoked the license already, so the process cannot be stopped.

The second representative of the FCMC added in the court that the case of liquidation of the bank should be continued and there is no reason to delay it as long as the rights of the bank are not restricted.

As indicated by Berroni, the bank liquidation process is primary aimed at the return of its assets and leaving of “Trasta komercbanka” out of the market will not have a material negative effect on the stability of the Latvian financial sector.

The bank representative said that a national court cannot make a decision, as the Latvian laws are not harmonized with EU standards.

The representative of the FCMC previously explained to the court that the revocation of the bank license is thoughtful and carefully considered decision. Liquidation of the bank was asked to start as soon as possible by the FCMC, so that you can begin to meet the needs of investors.

In her turn, the representative of the bank said that the decision of the European Central Bank provides the possibility to dispute it, and this right is guaranteed by legislative acts of the European Union.

As it was previously reported, the Riga Vidzeme District Court began to examine the case of the beginning of the liquidation process of “Trasta komercbanka” at the request of the FCMC.

As reported, the European Central Bank annulled the license of “Trasta komercbanka” at the request of the FCMC on March 3.

“Trasta komercbankа” has been working since 1989. The Group has its representations in Russia, Ukraine, Kazakhstan, Tajikistan, Azerbaijan and a branch in Cyprus. Igor Buimisters owns from 33% to 50% of the bank's shares, Ivan Fursin (indirectly) - from 20% to 33%.

Statoil: Estonians More Often Buy Fuel in Latvia

According to Statoil, the Estonians more often buy fuel in Latvia due to the difference in the prices.

Prices for gasoline and diesel fuel in Latvia are lower than in Estonia and Lithuania, said director of production of Statoil Fuel & Retail Latvia Armands Zubulis. The price of diesel fuel in Latvia is for more than 10 cents cheaper compared with Estonia, he added.

According to the data of Statoil, more and more Estonians visit petrol stations in Latvia, especially those ones located in the area of Latvian-Estonian border.

According to the European Commission data the price of gasoline in Latvia was the fourth one last year, but the price of diesel fuel - the second lowest in the EU.

Housing Affordability has Increased in the Capitals of the Three Baltic States

Housing affordability of dwelling has increased in the capitals of the three Baltic States in the IV quarter of 2015 according to the last Housing Affordability Index prepared by Swedbank.

Housing Affordability Index has increased by 4.7 points - up to 160.1 points in Riga, in Tallinn - by 4.2 points, up to 153.4 points, in Vilnius – by 4 points, to 129.2 points in the IV quarter of 2015 in comparison with the IV quarter of 2014.

“It means that household income exceeded the required ones for 60.1% in Riga in the IV quarter of 2015 in order to afford an apartment in accordance with the established norms and thus mortgage payments would not exceed 30% of net income”, - explains Swedbank.

Interest rates on mortgage loans in Estonia and Lithuania were down slightly, but in Latvia – increased in the IV quarter of 2015.

The time required for the accumulation of funds to make a first instalment in the amount of 15 per cent on a mortgage was a month and a week less than a year earlier constituting of 24.6 months in Riga in the IV quarter of 2015. In Tallinn, it decreased by about three weeks - to 28.5 months, in Vilnius – by a month, to 36.8 months.

In the terms of the sum assets, Swedbank is the largest in Latvia.

Latvia is Planning to Sign an Agreement on Accession to the OECD in Early June

Overproduction of Wheat is Expected in the World this Year

The global market has faced overproduction of wheat against the backdrop of growth in production over the last 5 years, as well as high carry-over stocks of grain products in the current season.

This was announced by a senior editor of the grain department of information agency Platts Andre Agapi, speaking at an international conference Middle East Grain Congress in the United Arab Emirates.

“Growth in production of wheat in many key countries exporting wheat is observed in 2015/2016. In particular, the gross harvest of grain was increased by Ukraine - to 27.5 million tons against 24.5 million tons in a previous season, Russia - up to 61 (59.1) million tonnes, the United States - to 55.8 (55.1) million tonnes, Australia - to 24.2 (23.1) million tonnes and the EU countries - to 149.5 (149.1) million tonnes”, said an expert.

Also, the analyst estimated the export potential of wheat in some key countries until the end of 2015/2016. Thus, according to A. Agapi Ukraine can supply to foreign markets about 7.4 million tons of grain production within 4.5 months remaining before the end of the season. For Russia, this figure is 5.8 million tons, for the EU countries - 12.5 million tonnes, for the United States - 8.1 million tons.

Separately A. Agapi focused his attention on India. “In the current season in India, there is a decrease of gross harvest of wheat by 7 million tons – up to 89 million tons. Thus, the country can switch from the exporters to its importers and depending on the decision on the further functioning of the 25% duty on wheat import, may import from 1 to 4 million tons of grain”, said the analyst.

At the same time, A. Agapi said that Australia will become a potential key supplier of wheat to India.

In Latvia, the grain is still one of the most important groups of export goods. In 2015, Latvia sold 1.79 million tonnes of wheat and wheat-rye mixture at foreign markets, which is 416 thousand tons or 30.2% more than the year before.

The Latvians are Buying More Expensive Products with the Increase of Purchasing Power

Riga City Council and Swedbank will Support Novice Entrepreneurs in the Framework of the Grant Programme Take-Off 

Riga City Council and Swedbank will sign an agreement on the implementation of the grant programme Atspēriens (Take-Off) for the fifteenth time in a row in the first half of 2016 in order to promote the development of small and medium entrepreneurships in the capital.

Entrepreneurs can get up to 15 000 euro this year to support of one innovative business idea. Applications for grants will be accepted until March 21.

Signing of the agreement on the implementation of the programme in 2016 will take place on Thursday, February 18 at 1.00 pm attended by the Chairman of Riga City Council Nil Ushakov, head of Swedbank Maris Mancinskis and Member of the Board of the company Certes Technologies Agnis Kalnins. The signing of the agreement will take place in premises of the company Certes Technologies at the address Mukusalas Street 41b-8.

This company became the winner of the programme in 2014, receiving a grant for the production of teaching audio systems for schools. After the signing ceremony, the representatives of Certes Technologies will introduce the process of production of their audio systems to the participants.

Since 2009, 126 business ideas have been supported in the framework of the programme Take-Off of total almost a million euro. This year, the grant programme will offer not only financial support for the winners, but also new knowledge available on the free seminars on topics relevant to entrepreneurs.

Birthday of the Bar “Barschevsky & Partners”

We are really glad to wish many happy returns of the day to our colleagues – the Bar “Barschevsky & Partners”! We wish prosperity and harmony, the goals to be achieved and wishes to come true!

Happy birthday, friends!

Former Vice-President of Latvenergo was Fined for Nearly 50000 Euro

Riga District Court, considering one of the cases of bribery of officials of Latvenergo, sentenced the former vice-president of the company Aigars Melko and the head of Energy Consulting Andrey Livanovich to fines, but the technical director of production of Latvenergo Gunars Tsvetkovs was acquitted.

Melko has to pay a fine in the amount of 48.1 thousand euro, but Livanovich - 37 thousand euro. The court has reclassified accusations - Melko is convicted for taking unauthorized benefits, but Livanovich for commercial bribery. The complete sentence will be available on January 25 and it can be appealed within 10 days.

The court also decided that against the company of Livanovich Energy Consulting will be applied measures of forced exposure in the amount of 400 minimum salaries or 148.000 euro.

The bribe was given for the fact that the best proposal would have the company Alstom Power Sweden AB in the tender of Latvenergo related to the reconstruction of hydroelectric units of the Plavinas Hydroelectric Power Station. The total amount of the bribe amounted to 627 thousand euro.

Decrease in Oil Prices Contributed to the Profit of Lithuanian Companies

Lithuanian companies engaged in non-financial activities received 3.31 billion euro of pre-tax profit in the first nine months of this year, while the profit was 2.79 billion euro in 2014, but in the pre-crisis year of 2007 – 3.13 billion euro according to the Department of Statistics. As economists say, profit has increased due to the decrease of energy resource prices, as written by a business daily Verslo žinios on Wednesday.

The Chief analyst at DNB Bank Indra Ganite-Pikchene said that the general macroeconomic trends are extremely bad this year, but deflation has helped the companies, as energy resources have dropped in price.

“Financial situation of Lithuanian companies is very good and maybe even too good this year. Record large liquid assets and undivided profits show that the companies are not able to successfully “employ” the profit; they lack ideas. Money is not be returned to shareholders and not invested”, said the Chief analyst of Swedbank Nerijus Machiulis.

The Biggest Tax Debtors Owe Latvia Over 245 Million Euro

100 biggest tax debtors have owed Latvia a total of 245.107.000 euro at the beginning of December 2015 - 1% less than at the beginning of November, according to the State Revenue Service (SRS).

Including debt of 36 physical and legal persons exceeds 2 million euro, it is for one person more than at the beginning of November.

A private person Yevgeny Yakovlev has been considering to be the leader of the list of debtors for a long time – his debt increased to 19.16 million euro to the beginning of December. The second place takes the company Asiva with its debt in the amount of 9.705 million euro, the third one - AVT Nafta with 8.839 million euro.

A private person Vadim Mitrofanov with his debt in the amount of 8.804 million euro is the next one according to the amount of debt, the company Krаsainie lеjumi with 8.474 million euro, the company Bebriko Ltd (former KMM Metаls) with 8.182 million euro, Eco Tyre Baltics with 7.689 million euro, Baltic lumber products with 5.467 million euro, Future vision with 5.129 million euro and the company East-West Transit with the debt in the amount of 4.041 million euro closes the top ten of tax debtors.

100 biggest tax debtors have owed Latvia a total of 247.64 million euro at the beginning of November 2015.

“Rigas udens” Will Auction Property Located on Murjanu Street

The company “Rigas udens” will auction property located in Riga, on 70 Murjanu Street on January 21, as reported by "The Latvian Herald".

The lot consists of a plot of land, water treatment plant, transformer substation, etc. Starting price is 625.000 euro.

“Nordea Bank” Raised its Forecast of the GDP Growth in Latvia for 2015 up to 2.4%

Another Fast Food Giant “Pizza Hut” Will Start its Work in Latvia

Opening of another fast food giant “Pizza Hut” is planned in Latvia in the first quarter of next year, reported a representative of the company Vitaly Zhiauga.

More detailed information about the location and opening date will be available closer to the establishment`s opening day, according to his words.

We remind that Pizza Hut is a restaurant chain, consisting of more than 34 thousand outlets in 100 countries of the world. Pizza Hut is included in a corporation Yum! Brands. The same corporation owns the brand “Kentucky Fried Chicken” (KFC), one of the establishments of which was opened in Riga on August 28 of this year.

It is planned to spend more than a million euro to open both establishments according to the owner of franchises of Pizza Hut and KFC in the Baltic States Sigurd Arnar Sigursson.

Baltic Logistic Solutions Will Establish Logistic Centre in Each of the Baltic States

The logistic company Baltic Logistic Solutions (BLS), which is the part of the Sanitex Group, expanded the warehouse complex in Riga this year, planning to complete construction of its own warehouse in Estonia next year, because if you want to compete in this segment, it is important to take care of your own infrastructure, investing in quality a lot, the business paper Verslo žinios reported on Monday about the plans of BLS.

The complex in Riga was built this summer, where one of the warehouses is provided for the storage of frozen products, the other one for dry products which require cool temperature. In Estonia, the warehouse will be intended to store products requiring different temperatures. While it is believed that pre-investment in Estonia will amount to about 12 million euro. Also, it is discussed the possible further development in Riga.

“We see Latvia as the central tracks of warehouse of the Baltic Sea, Riga is convenient for distribution of imported goods to the markets of all Baltic States. Estonia, in its turn, is more intended for the local market, but as yet few products go from North to South”, said a member of the board of Sanitex and Baltic Logistic Solutions in Latvia Yovaras Pilkёnis.

Turnover of the Lithuanian capital of the company Sanitex which began its activity in 1992 reached 249.057 million euro, profit - 1.881 million euro last year.

Latvia's Export Remained at Last Year's Level

Latvia is the only state among the EU countries, which export remained at last year's level in January-September according to data released on Friday by the EU statistics department Eurostat.

The volume of export decreased in four countries during this period, including Lithuania for more than in anyone else - by 6%, in Estonia - by 3%.

In its turn, 23 countries increased the volume of export, including most of all Cyprus – by 23%, Ireland - 20%, as well as the United Kingdom and Croatia – by 11%.

Import increased compared to nine months of the last year in 21 countries in January-September most of all - to Ireland (+14%), Malta (+11%) and the UK (+9%).

The volume of import decreased to 7 countries: in Greece - by 11%, Finland - 8%, Estonia - 5%, Cyprus - 4%, Belgium - by 2%, Latvia and Lithuania - 1%.

The Share Residents in Equity Capital of Latvian Banks Has Reduced

The share of residents in paid-up capital of Latvian banks decreased by 5.4 percentage points in the first nine months of 2015 - to 14.1% of the total share capital of banks, was reported to the agency BNS in the Financial and Capital Market Commission.

The paid-up capital of Latvian banks amounted to 2.068 billion euro at the end of September 2015, including the shares owned by residents of 291.719 million euro, or 14.1% (at the end of 2014 – 19.5%), to non-residents – 1.777 billion euro, or 85.9% (at the end of 2014 – 80.5%).

The paid-up capital of Latvian banks increased by 29.993 million euro (1.5%), including the share of residents has decreased by 105.42 million euro (26.5%), of non-residents has increased by 135.413 million euro (8.3%) in the first nine months of this year.

The share of Sweden in the share capital of Latvian banks amounted to 1.088 billion euro (52.6%), of Norway – 191.178 million euro (9.2%), the USA – 87.116 million euro (4.2%), Russia – 74.606 million euro (3.6%), the Great Britain – 70.943 million euro (3.4%), Ukraine – 69.746 million euro (3.4%), Malta – 47.111 million euro (2.3%), Switzerland – 44.155 million euro (2.1%), Luxembourg – 30.967 million euro (1.5%), Cyprus – 29.604 million euro (1.4%), Estonia – 3.465 million euro (0.2%), Iceland – 3.096 million euro (0.1%), the Netherlands – 1.531 million euro (0.1%) in late June.

There are 27 banks operating in Latvia, including 10 branches of foreign banks.

Latvia takes the 40^th Place in the Index of Welfare

Estonia takes the 31^st, Latvia – the 40^th, Lithuania – the 41^st place out of 142 countries in the world in the traditional Index of Welfare.

The London-based Institute Legatum annually makes ranking, taking into account the economic situation of the country, the situation in the sphere of education, health, quality of state control and safety of citizens.

Among the EU, the Baltic States got a better estimate than Croatia (53^rd place), Bulgaria (51^st place), Romania (50^th), Greece (49^th), Hungary (45^th). Neighbouring Russia has got the 58th position, while Belarus – the 63^rd.

Like last year, the first place in the ranking took Norway.

Forecast. Soon the Latvian Economics will be the Fastest Growing in the Baltic States

The Fish Processors Resumed the Work, Dramatically Reducing Capacity

The Government will make Tax Discount to the Poultry Plant Kekava in the Amount of 3.7 Million for Investments

The government is planning to give a discount of Enterprise Income Tax (EIT) to the largest Latvian producer of poultry Putnu fabrika Kekava in the amount of 3.69 million euro in connection with investments made by the company in the modernization accordingly to the agenda of the government meeting on October 13.

The amendments to the law providing the restoration of discounts on EIT for initial long-term investments made as part of a supported investment project came into force from January 1, 2011 to speed up the recovery of the economics by attracting investments to Latvia as specified in summary to the project of the appropriate order by the Ministry of Economics.

This regulation is valid until December 31, 2020. It provides discounts to taxpayers who have made investments in fixed assets used for their business activities in the supported priority fields and aimed to create new business locations, increasing of production capacity or services, launch of the new products not previously been produced by the taxpayer, or a substantial change in production process.

A discount of 25% is provided, if the total initial amount of long-term investments does not exceed 50 million euro, when it exceeds 50 million euro, the discount will be 15%.

The Ministry of Economics indicated that the application has been received for receiving of the status of the investment project “General Modernization of the Poultry Plant Kekava” in May, 2015. It is planned to invest 14.97 million euro (attributable costs 14.76 million euro) in the framework of the project; thus, the company will be entitled to the EIT discount in the amount of 3.69 million euro after the implementation of the project. The term of the project is 36 months at the beginning of June 2015.

“The additional taxes paid to the state budget will exceed the initially applied discount of 3.69 million euro already in the year of the project completion (in 2019), taking into account growth of the total turnover and increase of the paid taxes planned by the company”, said in the summary.

Also, the Ministry of Economics informed the government on the projected impact over the national economy of the investment project, as well as the financial calculations provided in the business plan of the company, but this information is restricted.

The government will consider the issue behind closed doors.

As previously reported by BNS, the turnover of Putnu fabrika Kekava amounted to 40.811 million euro, profit of 1.05 million euro in the last fiscal year, which lasted from July 1, 2014 to June 30, 2015. According to the company`s data, Putnu fabrika Kekava released 18.6 tons of products in 2014.

Putnu fabrika Kekava, which is engaged in processing of poultry, began work in 1974. It produces more than 65% of total poultry in Latvia by being the company of a full production cycle and growing of chickens. In total, the company produces more than 240 different products.

The Ministry of Economics is going to Establish Order in the Funeral Industry

Estonia, Sweden, Latvia and Finland will be Engaged in Joint Export of Medical Technologies

The Tallinn Industrial Park Tehnopol opens the project of development of business in the field of medical technologies CH Health Access, in the framework of which companies from Estonia, Finland, Sweden and Latvia will jointly bring out medical technologies to new markets, based on common experience.

“The project brings together clusters of health protection of all four countries, based on the experience of which we will help enterprises to launch sales in new markets. Each cluster chose a distant market, where there is already a good partner, which has already formed working relationship, but the companies of a cluster already conducted primary sales”, delivered the press release words of the initiator of the project and director of Tehnopol of the medical technologies Külli Tärno.

Finnish cluster BioTurku will open a fast-growing South Korean market to others, Tehnopol and Latvian Enixus will base on their relationship with the USA (in Silicon Valley and Pennsylvania, respectively). Tartu Biopark will rely on its experience of the Indian market, but the Swedish medical technology cluster will help to enter the market in Uganda.

The project CH Health Access will be valid for 3 years, where 17-22 enterprises for each market will be selected in the region during this period. The programs focused on South Korea and the USA will start in the first quarter of 2016, but in May of the same year – the programs focused on India and Uganda.

The leading partner of the project CH Health Access is the Tallinn Industrial Park Tehnopol. Project partners are Tartu Biotechnology Park, Turusk Science Park, Enixus Baltics Latvia and cluster Swedish Medtech. The project is funded by the Central Baltic Interreg program.

The Use of Tax for Micro-Enterprises Will be Banned in 37 Industries

The government decided today that tax for micro-enterprises will not be applied in 37 industries.

Today, the government approved Regulations “Industries, where the Tax Regime for Micro-Enterprises is not Applied”. The document lists areas of activity, in which the application of the tax regime for micro-enterprises will be banned.

The companies involved in timber industry, conducting supporting activities in forestry and extractive industry, producing tobacco products, by-products of coke and petroleum, pharmaceutical substances and preparations, metal, employed in the construction industry - construction of buildings and utilities, demolition of buildings, preparation of construction sites, installation of electrical installations and pipelines and in similar industries will not be able to pay a micro-enterprise tax and register as a micro-enterprise taxpayer.

Also, the preferential tax regime will be forbidden to use in areas related to the final cycle of construction works.

Also, the lists includes such industries as retail, taxi services, air transport, telecommunications, computer programming, information services, financial services, insurance, except the work of insurance agents and brokers, purchase and sale of your own property, legal and accounting services, consulting in the field of business and management.

The regime will not be able to use the companies providing architectural and engineering and technical, advertising, science and technology services, the exception is photo, translation services; agency of personnel search and selection, bodyguards engaged in administrative work of offices in administration and security, health, social care and the hospitality industry, engaged in social, political and other activities; conducting scientific work and preparing market research.

In addition, paying of a micro-enterprise tax will be banned in manufacturing of metal special ties, tools, vehicles, trailers and semi-trailers, etc.

It was earlier said in the Latvian Chamber of Commerce that a list of prohibited areas where it is forbidden to use a micro-enterprise tax prepared by the Ministry of Finance is absurd and does not achieve the purpose of ordering the business environment.

“Latraps” Invested in the Facilities of Primary Processing of Grain

Cooperative society of agricultural services Latraps invested about 5 million euro in the facilities of primary processing of grain, informed BNS CEO of Latraps Edgar Ruzha.

According to his words, investments are made in primary processing facilities in Bauska, Eleja, Jaunpagaste and Aizkraukle.

All of these facilities received the grain and started to work in this season. Construction of the complex in Aizkraukle was planned to be completed by the beginning of July, but it started to work later and now it is working in testing mode due to amendments in Construction Law.

Latraps was established in 20000. It is the largest cooperative of cultivation of grain and rape in Latvia.

The turnover of Latraps amounted to 166.988 million euro - 18.1% less than in the previous fiscal year, the profit has decreased by 2.6 times - up to 2.022 million euro, as showed by the financial report in the Lursoft database in the fiscal year (which lasted from July 1, 2013 to June 30, 2014).

The Latvian Pig-Breeders Have Lost 8.1 Million Euro

The damage caused by African swine fever (ASF) to the Latvian pig-breeders has reached 8.1 million euro, reported a representative of the Ministry of Agriculture Kaspars Funts to BNS.

“Since ASF was found out, the purchase price of pork felt by 15% per year, creating financial problems for the Latvian pig-breeders. Now the loss of pig-breeders has reached 8.1 million euro. Significantly increased the number of farms, which were affected by market constraints (constraints are now set for 40% of pigs registered in Latvia) and which have to reduce production volumes or stop production”, told Funts.

He said that the Minister of Agriculture Janis Duklavs will report that despite the measures taken the ASF continues spreading in Latvia at an extraordinary meeting of the Council of Ministers of Agriculture and Fisheries of the EU on September 7.

It is assumed that Duklavs will report on the complex situation in Latvia also to the EU Commissioner for Health and Food Safety Vytenis Andriukaitis.

It has been already reported that the ministers of agriculture of Latvia, Estonia, Lithuania and Poland sent a letter to the European Commission with a request to increase funding for the fight against ASF.

ASF is very dangerous and easily transmitted viral disease of pigs. It is necessary to stick the herd in areas, where the disease is found out. Therefore, outbreaks of the disease cause great economic damage to pig-breeders. ASF is not dangerous for people.

45.800 Micro-enterprises are Registered in Latvia

45.815 micro-enterprise taxpayers were registered in early September according to the State Revenue Service (SRS).

66.919 of taxpayers have submitted an application to receive the status of the micro-enterprise taxpayer from September 1, 2010 (the date of the introduction of this tax) to September 1, 2015. 64.458 applications were approved, but 1641 have been rejected, 88 have not yet considered. 732 applications are no longer relevant (due to incorrectly entered data, due to the fact that the applicants changed their minds or if the SRS initially decided to give the status, but later cancelled its decision).

36.163 of applications are submitted in the SRS, but 30.756 in the Register of Enterprises to receive the status of the micro-enterprise taxpayer.

According to the SRS, 18.602 enterprises were deprived of the status of the micro-enterprise taxpayer due to failure to comply with the requirements of the criteria defined by law.

A micro-enterprise tax in the amount of 9% of the turnover was introduced on September 1, 2010. According to the decision of the Saeima, the tax rate of 9% applies to the first three years of the economic activity of those micro-enterprises whose annual turnover is from 7000.01 to 100.000 EUR starting from this year. The rate for these enterprises will be 12% of the turnover starting from the fourth year.

The micro-enterprise taxpayer can be an individual businessman, individual enterprise, peasant or fishing farm, as well as other physical person registered in the State Revenue Service as a person conducting economic activity or a limited liability company (LLC) that meets a number of criteria - employees of the micro-enterprises can only be physical persons while workers of LLC are also members of the board. Turnover of a micro-enterprise may not exceed 100.000 EUR in a calendar year; it may employ not more than five people.

Central Market Will Cooperate with the SRS

The State Revenue Service (SRS) and Riga municipal enterprise “Riga Central Market” agreed to cooperate in order to reduce the number of illegal displays on the market, informed in the Department of Public Relations of the State Revenue Service to BNS.

Leadership of the SRS met with the administration of “Riga Central Market” on August 20 to discuss a significant number of violations related to the use of cash-registers, trade of agricultural produce, as well as in other areas.

Exchange of information, surveillance measures taken by the State Revenue Service and the Market, found violations and measurements of control were discussed at the meeting. Leadership of the SRS and “Riga Central Market” agreed on the need of joint activities with the aim of reducing tax evasion in full, promoting fair competition of traders and protection of consumer rights.

“We concluded that despite of our regular supervision and control measures, a large number of merchants, unfortunately, are continuing not to comply with regulations and do not pay taxes in full at the territory of Riga Central Market, causing losses to the budgets of both the government and state. We acknowledge that it will take time and serious joint work, but the interest shown by leadership of “Riga Central Market” and willingness to cooperate gives confidence that the situation can be changed and improved gradually”, said the General Director of the SRS Inara Petersone.

Petersone and Chairman of the Board of “Riga Central Market” Anatoly Abramov agreed to consider the possibility to conclude an agreement on the improvement and expansion of cooperation.

Riga Central Market acts as a joint stock company of Riga City Council since 1995. It includes Riga Central Market, Agenskalns Market and Vidzemes Market.

SEB Banka Actively Financed Agriculture

The slowing pace of development of the Latvian economics is making businessmen looking for ways to optimize their costs and be very cautious with new investments. In the first half a year SEB bank issued 208 million euro in loans, 87% of whom were given to entrepreneurs. However, in general SEB banka is ready to allocate up to 750 million euro this year for crediting of enterprises and individuals.

In the first half of a year, SEB banka has provided financing to enterprises in the amount of 180 million euro. 105 million of them were allocated to large companies, the remaining 75 – to small and medium-sized enterprises. The funds are mainly invested in production development and implementation of investment projects.

Member of the Board of SEB banka Ints Krasts: “Small and medium-sized enterprises are more focused on the local market, so their survival and development opportunities depend both on the domestic demand and the growth of economics of the country in general. This year, according to forecasts of SEB banka, the GDP growth will be at 2.4% or even lower. Purchasing power is growing, but more slowly than last year. Slowing of pace of development of economics makes employers wary: forces to optimize costs and carefully plan any investments. 180 million euro issued as loans in the first half of a year, in our opinion, is very little. In general, we are ready to provide up to 750 million euro this year. These funds can be used to reach the goals of both entrepreneurs and individuals. We are very pleased with the high activity in the field of agriculture. We expect that the representatives of other sectors will become active when the program of a new planning period of means of European structural funds will be approved”.

Due to the availability of European structural funds, most actively are borrowing entrepreneurs working in agriculture this year. They account for about 30% of SEB banka loans issued in the first half of a year. The amount of financing provided is almost 40 million euro. The funds are mostly used for the purchase of land and equipment, as well as the development of production.

Local governments actively are taking loans, which may still use the means of the EU funds of the previous planning period. Financing granted in the first half of a year in the amount of nearly 2.5 million euro is aimed for infrastructure projects.

Approximately one third of funding allocated by SEB banka in the first half of a year was received by enterprises working in the service sector. The remaining funds are provided to the manufacturers. The largest amount received by companies working in the field of high technologies and telecommunications, as well as representatives of the chemical industry.

The Volume of Latvian Export and Import is the Lowest One in the Baltic States

The volume of export and import of Latvia was the lowest among the Baltic States in the first five months of 2015, but the highest deficit of balance of foreign trade was in Lithuania, reported the Central Statistical Bureau.

Latvia sent the export goods for 4.154 billion euro, Lithuania - for 9.029 billion euro, Estonia - for 4.828 billion euro in the first five months of 2015.

75% of Latvia's export is for the other EU countries including, 63% of the Lithuanian and 75% of the Estonian one.

Export of Latvian goods to Lithuania amounted to 18% of total export, to Estonia - 12% in the first five months of 2015. Lithuania exported to Latvia 10%, to Estonia - 5% of total export; Estonia exported to Latvia 10%, to Lithuania - 5% of total export.

In its turn, the value of goods imported in Latvia for the first five months of 2015 amounted to 5.006 billion euro, in Lithuania - 10.308 billion euro, in Estonia - 5.334 billion euro.

Goods imported from the other EU countries composed 79% of the total value of import in Latvia and 66% in Lithuania, 81% in Estonia.

Import to Latvia from Lithuania amounted to 17%, from Estonia - 8% of total import. Lithuania imported from Latvia 7%, from Estonia - 3% of total import, Estonia imported from Latvia 9%, from Lithuania - 9% of total import.

All three countries have a negative balance of foreign trade in the first five months of 2015. The deficit of balance of foreign trade of Latvia was 852.6 million euro, Lithuania - 1.278 billion euro, Estonia - 506 million euro.

Čili Pica Suffers Losses

Turnover of the company Čilija Pizza, operating a network of fast-food restaurants Čili Pica, amounted to 7.82 million euro in 2014, which is 12.3% less than in 2013, losses have increased for several times and reached 466.8 thousand euro, as presented by a financial report of the company in the database Lursoft.

Revenues of Čilija Pizza from sales of the production fell by 13.5% last year, amounting to 7.02 million euro, while revenues from the product home delivery increased by 0.3%, to 799.500 euro.

Information of the leadership states that Čilija Pizza completed 2014 with losses due to the reduction of the flow of tourists in Latvia, as well as due to the increased competition in the business of public catering.

Also, the leadership indicates that Čilija Pizza continued to develop a network of restaurants Čili Pica in 2014, carrying out renovation and interior changes in a number of them. 655 thousand euro in the whole are invested in the renovation and new design of leased restaurants. In addition, two unprofitable restaurants Čili Pica were closed last year.

In 2015, the company is planning to develop a network of restaurants Čili Pica, opening new ones and updating the interior of existing ones.

Turnover of Čilija Pizza amounted to 8.914 million euro, losses – 39.9 thousand euro in 2013.

Share capital of Čilija Pizza is 2.8 thousand euro. The sole owner of the company is Lithuanian Čili Holdings, according to the data of Lursoft.

Latvian Cheese Producers Have Launched Export to the West

The crisis in the industry and record low purchase prices for milk have not prevented the Latvian cheese producers to find new markets instead of the Russian ones and start production of new products, says the News Service of TV5 channel.

Nearly 3000 tons of cheese was exported to Russia during the first 5 months of last year, when the embargo had not yet touched the Latvian exporters of dairy products. This year, the exporters sent almost the same amount of cheese to new markets in Germany, the Netherlands, Italy, Sweden and Morocco. “We need to find new markets or launch new products. It is necessary to replace the lost markets. We, for example, had not produced mozzarella cheese before, but we had to do it to avoid overproduction of Dutch or Russian cheese. So we launched a new product line – Mozzarella, Maasdam and we also have already started tasting of fresh cheese in retail chains throughout Latvia”, said Deputy Chair of Council of Smiltenes Piens Gita Murnietse.

Latvian cheese producers almost completely replaced the Russian market by European in general, but farmers are now working at their best not to lose income because of falling of purchase prices for milk. “The volume of purchases of milk fell by only 1%. Everyone knows how much farmers get for 1 litres; the purchase price has fallen by 34%. Now they receive 22 cents per litre on average”, explained the head of Siera Klubs Wanda Davidanova.

Farmers have aligned falling of prices by increase in milk yield despite such a sharp drop in purchase prices for milk. “Despite the price reduction, dairy products are produced for 50% more in Latvia than they are bought here. So, the reduction in prices will not help - you will not eat 5 kg of cheese, if before you ate only 1 kg”, pointed out Murnietse to TV5.

Production of cheese and cottage cheese increased by 34% in the first 5 months of this year compared with the same period last year. Export of these products also showed a little, but still growth of 1%. Each Latvian eats more than 18 kilograms of cheese per year; every third ton of produced cheese is exported.

Latvian Pasazieru Vilciens Plans to purchase New Electric Trains

Latvian carrier of passengers by rail Pasazieru Vilciens (PV) is planning to begin a new procedure of procurement of electric trains in the near future, which can be delivered at the end of next year at best, said the board chairman of PV Andris Lubans in an interview to the Latvian TV broadcast “Morning Panorama” on Wednesday.

He said that the strategy of the company in the years 2015-2020, which will be presented on Wednesday, is a prerequisite for the start of the procedure.

„Because of this there is already a more stable foundation for us to attract credit resources. Taking into account that cohesive funding of procurement of trains by the EU is no longer possible, we will have to borrow the money on the market. We must be able to prove the commercial banks that we have a strategy, that our business is viable for decades, that we will be able to collect enough funds to be able to pay for these trains”, said Lubans.

It had been already reported that the winner in the tender declared by PV for the lease of the new trains was admitted the Swiss company Stadler Bussnang, but PV stopped the procedure of procurement of trains on July 23, last year.

Purchase of PV provided rent of 25 electric trains for 15 years with the possibility of increasing the number of trains to 45 with a subsequent redemption. The total contract price is 273.904 euro.

However, the contract was not concluded as Minister of Transport Anrijs Matiss dismissed the board of PV, which has failed to prove that the company can afford to rent the new trains.

PV was founded in 2001 by separating the inner railway passenger services from the state-owned railway company Latvijas Dzelzceļš. Previously PV was a subsidiary of Latvijas Dzelzcels (100%), but PV was transformed into a state-owned enterprise in October 2008.

Luxury Housing Prices in Jurmala Dropped Significantly in This Season

This season, luxury housing rent in Jurmala costs a half times cheaper than last year, shows a market overview prepared by the company “Balsts”.

If the house in good condition and in good location can be rented for 5000 euro a month last year, then is it a half of that price this year.

At the same time, the company's experts note that in the segment of cheaper housing rent substantial reduction in prices has not occurred for apartments in the serial houses and individual rooms in host apartments.

Expert: Smart Technologies Come into the Restaurant Business

Latvian restaurants have to become more flexible and open to different technologies that can help them improve the quality of service and competitiveness, says the expert on restaurant business Elena Kashina.

According to her opinion, in such a small market as Latvia, where there are hundreds of restaurants for several thousand gourmets, the primary goal of technology is to improve the efficiency and improve the service, but the next step is to attract customers.

“As in any hospitality business, it is important not to only get the customer, but also be able to provide services to him so that he would return”, added Kashina.

This trend confirms the week of Riga restaurants that took place just now, conducting the experiment of a table reservation online. For example, it increased the number of visitors for 9% in the restaurant “Aqua Luna”, compared to the other restaurant weeks.

Kashina rates it as an excellent result; particularly noting that general system of table reservation is an effective way to meet the expectations of visitors without significant investments for some restaurants, i.e. restaurants, as well as other enterprises will also use various smart technologies.

We must reckon on the fact that more and more tourists want to book not only accommodation, various tickets, but also tables in restaurants. Entrepreneurs need to think about how to provide the most quality: whether to process manually reservations received by e-mail or join one of the automatic or semi-automatic reservation systems.

In the world of online table reservation another trend is involved - small fee will be charged for the reservation covering the costs of a restaurant if people do not come without warning about it an advance. “I think that almost every restaurant has faced a similar situation in Latvia. The question, of course, is does the Latvian consumer is ready for it”, said Kashina.

“Many people will say that the Latvian restaurants cannot afford to invest in a variety of technological solutions, however, I propose looking at the long-term prospective. Sometimes investing in a high quality POS-system that can be integrated with customer management system, can be compensated by strengthening the customer loyalty”, explains Kashina.

“It is a challenge to master new technologies, which include not only implementing and use of them, but also not to lose personal communication with the client at this time. The hospitality business cannot exist without it, especially high-end restaurants”, summarizes Kashina.

Elena Kashina is an expert on restaurant business with nearly 15 years of experience in the industry both in Latvian and international level. Now she is one of the owners of the restaurant “Aqua Luna” and rotisserie “Doma Dārzs”. Also, she manages a beach restaurant in Jurmala called “Legend. Beach”.

„Laima” Will Invest 700.000 Euro in the Production

The largest manufacturer of sweets in Latvia “Laima” plans to invest 700.000 euro in the improvement of working conditions and production processes at the factory located on Miera Street in Riga, as it was reported by representatives of the enterprise to BNS.

A large-scale investment program is carried out within the enterprise to improve the conditions of workers and the general improvement and renewal of the production process, during which 700 thousand euro will be invested in the factory located on Miera Street. The investment project is scheduled to finish in August 2015.

As NP Foods board chairman Erik Smith-Hansen said, the investment program is planned to strengthen the competitiveness of “Laima” and improve the everyday life of its employees, while preserving the maximal historical value of the factory. “There have not been made investments in the production of “Laima” in the last 15 years and we also will continue to implement improvements in the production lines in the near future”, he said.

It is planned to build a new canteen, new restrooms, additional dressing rooms for the workers of the factory, renew toilets and showers under this program. Along with this, the company is working on to improve an internal turnover of products and raw materials within storage process. It is also planned to convert the building entrances in the framework of this program.

As previously reported, the turnover of “Laima” amounted to 10.842 million euro, profit - 5.75 million euro in 2013.

“Laima” is a part of “NP Foods”, Norwegian-owned food concern “Orkla”. Now “Laima” exports its products to more than 30 countries in the world.

Foreigners Put Their Business to Latvia

491 companies in Latvia are registered for native of Estonia. Increasingly, businessmen of this Baltic country decide to move to Latvia due to more flexible tax system of our country. However, Estonians are not the only as reported by the program “Tonight” of LTV7.

Milanese Riccardo Kapuzzo first came to Riga for almost three years ago as a tourist. So he came to Latvia until the moment he has not moved his business to the Latvian capital on February of this year.

“You have less bureaucracy than in Italy. Taxes are lower, but educational level is higher. Riga is a beautiful city. Your food is delicious. I have gained a few kilos!”, admits Kapuzzo to LTV7. In the portfolio is my own business related to the objects of design and the Internet, an office in the city centre, a team of seven people.

No matter how many foreign companies are registered in Latvia, the fact that taxes are received in the Latvian treasury is important. More often neighbours come to Latvia. Businessmen from Estonia run away. The Association of Small and Medium Enterprises (EVEA) of the Baltic republic is not surprised.

“Estonia's tax system needs to be improved. It seems interesting, for example, your micro-enterprise tax”, said the head of EVEA Raivo Altmets in a conversation with LTV7.

Estonia is settled comfortably in the list of investors in seventh place in the Lursoft database. Lithuania is in the sixth one. The accumulated direct investments of Latvia are almost 12 and a half billion euro in just the first quarter of 2015. This is half of the gross domestic product of the country. That is what produces Latvia per year.

New works places and new culture come together with foreign money. So says the head of the Investment Agency of Latvia Andris Ozols.

“Some of the taxes are the lowest in the EU, what we boast of. But the tax levied on wages is one of the highest. It is clear that this has a negative impact on our competitiveness with Estonians and Lithuanians. The presence of foreign companies from different countries is welcome. However, there are exceptions, for example, investments aimed at narrowing the competition. Scandinavians, for instance, bought a sugar factory that was closed from us”, reminds Ozols.

As follows, Latvia has not yet became an investment haven, but a flow of investments is not as high as we would like.

“If all the foreigners would invest like that, our economy would grow significantly. The biggest problem of our tax system is pulling of it all the time. In the morning somebody woke up and thought: Oh, come on, raise the tax, let's change it!”, says President of Latvian Chamber of Commerce and Industry Aigars Rostovskis.

Losses of Latvian Fishermen Amount to 100-200 Million Euro Because of a Ban on Export to Russia

Losses of the Latvian fishermen amount to 100-200 million euro as a result of Russia's decision to ban the import of canned fish from Latvia, said the Minister of Agriculture Janis Duklavs on Wednesday in an interview to the broadcast of the television channel LNT “900 Seconds”.

Now the working group is specifying the amount of losses. “This question cannot be answered in one sentence, as the working group in working on it, trying to calculate losses. Entire fishing industry because of the ban will not stop ... The losses could reach from 100 to 200 million euro – those are estimations of the industry, of individual representatives of it. We would like to study this issue more precisely and only then to say what these numbers are”, he said.

Duklavs reminded that Russia imposed the ban for two months. “Food and Veterinary Service (FVS) together with representatives of the industry shall study during this time the reason of problems, whether standards for levels of benzopyrene are exceeded, issues of sterilization and traceability. Russian experts pointed out that it is impossible to trace how fish from the ship gets into a can and further on the table of a buyer. These questions need to be answered and Russia's decision will follow two months later”, he explained.

The Latvian side expressed its dissatisfaction with the Russian colleagues, as only four fish-processing plants were verified, but the ban to export products to Russia refers to the whole industry, the minister added.

As previously reported, Rosselkhoznadzor banned the supply of fish and fish products from Estonia and Latvia on June 4. The Latvian fish manufacturers said that it is a heavy assault for them; a number of enterprises may go bankrupt.

Russia Bans Import of Fishery Products from Latvia and Estonia

Russia bans import of fishery products from Estonia and Latvia. TASS is reporting about it referring to the press-secretary of Rosselkhoznadzor Julia Trofimova. Such a statement was made by her after consultations of authorities with the veterinary services of the Baltic States.

“Rosselkhoznadzor informed the veterinary services of Latvia and Estonia about the concern related to the nature of identified systemic violations and told them that it will be suspended deliveries of fishery products from Latvia and Estonia to the territory of Russia in the near future”, said Trofimova.

Previously, the Kaliningrad customs officers prevented smuggling of about four hundred kilograms of meat and milk from Poland. Three women tried to smuggle the banned products by cars in Russia.

Latvenergo Will Issue Seven-Year Bonds for 50 Million Euro

The energy company “Latvenergo” will release seven-year bonds foe the amount of 50 million euro on June 10, says the report of the company Exchange Nasdaq Riga.

This emission will be the first part of the second issuance program “Latvenergo” for 100 million euro.

The maturity of the new bonds is June 10, 2022. Nominal value of one bond is 1000 euro, minimum amount of investments - 100 000 euro. These securities are provided to include in exchange listing of debt securities.

As it was already reported, “Latvenergo” will release “green” bonds this year. Proceeds from the emission of “green” bonds will be invested in the implementation of environment-friendly projects.

The list of debt securities of the exchanges Nasdaq includes bonds of “Latvenergo” for total amount of 105 million euro since 2013, including five-year bonds for 70 million euro and seven-year bonds for 35 million euro.

The audited turnover of “Latvenergo” was 1.011 billion euro in 2014 that is for 8.1% less than in 2013, while profit declined by 35.4% - up to 29.79 million euro.

Transfer of Share Capital to the Euro can be Made Automatically by the Sole Ltd.

The Saeima of Latvia approved amendments to the Commercial Law in the second and final reading, providing the automatic transfer of share capital belonging to one owner of a limited liability company (Ltd.) to the euro.

Now the institution, which is in charge of registration of the enterprises - the Register of Enterprises will be able to solve the problem of automatic transfer of share capital owned by a single owner of Ltd. to euro.

According to the information of the Register of Enterprises, only 16% of such companies applied for its share capital`s transfer to the euro to date. Meanwhile, Ltd. owned by the sole owner is 80% of the companies in Latvia.

The amendments will enter into force on the day after the proclamation of the President of Latvia.

Experts: the Shadow Economy in Latvia is Almost Twice the Rate of Lithuania and Estonia

The volume of the shadow economy in Latvia, unfortunately, does not decrease, its share amounted to about 24% of GDP last year, almost twice exceeding the rates of Lithuania and Estonia, said Director of the Centre for Sustainable Business Arnis Sauka on Wednesday in an interview to the program “900 Seconds” of a television channel LNT.

“Unfortunately, the share of shadow economy in Latvia does not decrease. Its share has decreased in comparison with 2013 in Lithuania and Estonia in 2014. This means that the gap is widening. If two or three years ago it seemed that the shadow economy in Latvia, Lithuania and Estonia closes together, now the gap is expanding and we can say that the shadow economy is almost twice as much as in neighboring countries in Latvia”, he said.

Sauka noted that the share of shadow economy in Latvia has remained approximately at the level of 2013 last year. “The news, of course, bad. The fight against the shadow economy is priority of the government and we, the scientists, had expected that its share will decrease”, he said.

He added that although the level of the shadow economy has not changed, changed its structure. “A lot is said about the salaries in envelopes as the biggest problem of the shadow economy. But according to our research, the much larger problem is hiding of income as the payment of salaries in envelopes decreased significantly. This is the field, which we ask to pay more attention”, said Sauka.

He added that the shadow economy is becoming bigger problem in construction; its share in this sector is 50%. The share of the shadow economy is growing in the field of retail sales as well. Traditionally the share of the shadow economy is greater in Riga and Kurzeme than in other regions of Latvia.

Representatives of the SSE Riga is going to carry out a presentation of the latest studies of the shadow economy in the Baltic States on Wednesday.

The share of shadow economy in Latvia increased by 2.7 percentage points in 2013, making 23.8% of GDP as already reported by BNS, according to the previously completed research of SSE Riga. According to studies, the highest point of the Latvian shadow economy was reached in 2010 - 38.1%, while the lowest proportion of it was in 2012 - 21.1%.

The Number of Passengers Served by the Port of Riga Decreased by 40.3%

The Port of Riga served 133.035 passengers in the first four months of 2015, as it is for 40.3% less than in the same period of 2014, according to information of the port.

The Port of Riga has not served a single passenger of cruise ships in the first four months of this year, while the port served 3.042 passengers of cruise ships in the same period in 2014. Accordingly to the information available on the port`s website, the first cruise ships are expected in Riga in May.

The Port of Riga served 222.917 passengers in the first four months of 2014, for the entire tear of 2014 – 737.865 passengers, which is for 11.9% less than in 2013.

Regular passenger ferry traffic from the Freeport of Riga is carried out only to Stockholm.

Survey. The Main Criteria for the Latvians When Choosing a Profession

The most important criterion when choosing from several job offers to residents of Latvia is the amount of the salary, showed a recent study of “DNB Latvian Barometer”, told the Head of PR unit of DNB Banka Teika Lapsa.

Answering the question “If you had to choose between several job offers, what would be the three main criteria that would determine your choice?”, 84% of respondents mentioned higher salary, 44% - the presence of social allowances, 30% - the presence of various awards and bonuses, 27% - compliance with their duties and their specialty knowledge, 6% - the opportunity to acquire new knowledge, 5% - the opportunity to work in an international environment.

As compared to the survey conducted in 2012, respondents most often pointed to criteria such as higher wages, the presence of social allowances and premiums and less - convenient location of a working place, more flexible working conditions, interesting and fascinating job and the possibility of receiving new knowledge in 2015.

Answering the question, what in their understanding is good work and by what criteria it is characterized, 85% of respondents mentioned the high salary, 47% - good working conditions, 37% - an interesting job. In comparison with 2010 and 2012, respondents more often mentioned high wages and good working conditions this year.

The value of wages dominates in responses to the question what offer the respondents would accept, if they had to choose between qualified job with a lower wage and low-skilled jobs with higher wages - 51% of respondents would choose the second option, 31% - the first. In 2010, the first option would have preferred by 24%, in 2012 - 24% of respondents.

The average amount of income mentioned by the respondents for one family member per month needed to survive would be 625.64 euro. 21% of respondents named the sum of 500 euro, 24% - the amount exceeding the average salary in Latvia, 15% - the amount of up to 300 euro.

The average amount of income mentioned by the respondents was 475.84 euro in 2010, 517.23 euro in 2012.

When it was asked to describe the level of labour safety in Latvia in general, 51% of respondents mentioned it as bad, 31% - good. At the same time 42% of respondents believe that it has not changed over the past five years, 21% - improved, 14% - has worsened.

Answering the question about what to potentially hazardous conditions are faced by respondents at work, 27% mentioned the need to work in the same position, 26% - long working hours, 24% - work at the computer, 21% - great physical activity, 20% - drafts, 19% - great mental workload, 19% - the need to perform work duties in their spare time.

Answering the question, whether they had health problems in the past five years due to work, 47% responded negatively and 34% answered affirmatively mentioning back pain, pain of hands, feet, and so on. Visual impairment was mentioned by 17% of the respondents.

Social research “DNB Latvian Barometer” is conducted monthly.

Latvian Residence Permit is Losing Popularity

The first months of 2015 showed a sharp decline in demand for Latvian residence permit. At the same time sales of houses and apartments had decreased, but economists predict a decline in real estate prices.

Increasing the input threshold for obtaining a residence permit and weakening of the rouble led to the demand for a residence permit fell by about four times. The program for attracting investment has been operating in Latvia since 2010: it is possible to obtain a residence permit under the simplified scheme by investing in the local economy. During this time, Latvia has attracted 1.3 billion euro of investment, 16.000 investors were granted a residence permit; 11 thousand of them are Russians.

Latvian politicians started talking about the program should be suspended against a background of the Ukrainian crisis and a sharp deterioration in relations between the West and Russia, as it promotes the influx of Russian citizens in the country. The main argument of the proponents of this idea lies in the fact that Russia annexed the Crimea, referring to the need to protect the rights of fellow citizens. Opponents of this argument talked about the economic advantages of the program: foreigners buy real estate (as a rule, investments particularly went into this area), pay taxes, bring here their families; stimulate the service sector. As a result, the Latvian deputies agreed on a compromise: the program is not shut down, but the minimum value of the property, on the basis of which it was possible to request a residence permit, was raised from 142 thousand up to 250 thousand euro.

Residence permit in Latvia: Expensive and Unattractive?

“I think the majority of politicians had the understanding that it will be assault to the Latvian economy. But it was considered that this assault will not be so painful, because there were not any Russian [counter] sanctions or other negative economic effects”, says a consistent opponent of tightening, the ex-Minister of Economy of Latvia Vyacheslav Dombrowski. – “Unfortunately, decisions are often made not on the basis of pragmatic economic considerations”.

Amendments to raise the ceilings came into force in September, 2014. Three months after it Latvian officials continued to receive applications from applicants for residence permits: you can submit documents within few months after the conclusion of a transaction.

The control three months have expired by the beginning of 2015 and it turned out that the interest of foreigners has greatly reduced.

The Office of Citizenship and Migration Affairs of Latvia (OCMA) has received 60 applications (a few people can apply in one application for a residence permit, for example, members of one family, who bought an apartment) in January, 2015.

For comparison, these applications were 242 in January, 2014; 39 applications (against 157 a year earlier) in February, 2015, in March, 2015 - 35 (180 a year earlier).

Assault to the Market in Riga and Jurmala

The first sounded the alarm brokers, as most of the investment was precisely in real estate. Latvian Real Estate Association Lanida stated that the number of requests for a residence permit in exchange for investments in real estate was reduced by 90% since the entry into force of the new rules.

As it was estimated by Association, the state has received for 9 million euro less of only in the form of direct taxes due to this fact. According to the Executive Director of the Association Irina Syarki, Russians now almost do not buy anything in Latvia.

“Here is at once a number of factors: first, the ban on the entry of certain cultural figures, prompting a backlash, then a discussion of a complete stop of the program, then raising of the thresholds and the introduction of the state fee in the amount of 5%, then the depreciation of the rouble. This is how things stack up”, says the director of the Association Lanida.

In total, according to the Land Registry of Latvia, the number of transactions in Riga and Jurmala was reduced by one and a half, as the main flow of investments from residents of the CIS was directed exactly in these cities.

In January 2015, 874 objects were purchased in Riga, while in the previous year - 1119. The peak activity occurred in August of last year, that is, the day before the entry into force of the new ceilings, while in the Latvian capital were concluded 1506 transactions. The situation is similar in Jurmala: 92 objects were purchased in January, 2015, a year earlier – 125; in August 2014 – 312 objects (an absolute record since 1993).

Standard Set

In addition, according to Irina Syarki, it is not so easy to find apartments in Riga that match the new conditions for obtaining residence permits.

“The property worth more than 250 thousand euro is enough, but there are restrictions on the cadastral value. [The cost of property determined by the state. Real estate tax is figured out from this amount – editor notes]. It must be not less than 80 thousand euro and these objects are very few, says Irina Syarka. - Now [a party “The National Union”] proposes to raise the threshold to 100 thousand euro. We decided to find out how many objects with cadastral value of more than 100 thousand euro we have: turned out to be less than 1% and this also includes, for example, the building of the Saeima and the government building”.

In Jurmala, the percentage of such buildings is higher, but increase of ceilings was not as important as the general deterioration of the geopolitical situation for the exclusive resort real estate.

“If you analyze a Russian buyer, so an important role plays fashion, says the Member of the Board of Jurmala Real Estate Igor Danilevich to BBC Russian Service. “There were opportunities, money, a friend bought - why should not I buy? My company is engaged in mainly Jurmala real estate, there popular sites were always worth more than 250 thousand euro. It is about real estate in new buildings on the sea side, where the cost per square meter starts from 3000 euro. However, this trend has ended”.

And again the usual set is repeated: problems with Ukraine, falling of the rouble, sanctions. “A major role was played by changes in the legislation of Latvia and some orders in Russia itself. Many, say officials, were forbidden to buy property abroad”, concludes Danilevich.

The Large-Scale Crisis Will not be

However, large-scale crisis in the market is not expected in the Latvian realtor circles and a fall in prices is not also predicted. However, everyone understands that the trouble cannot be avoided. Ex-Minister of Economy of Latvia Vyacheslav Dombrowski is more pessimistic with his forecasts; he believes that the real estate market is “waiting for depression”.

“At some point the builders were told that they have the opportunity to build housing, which can then be sold to Russians or residents of the CIS with a certain purchasing power”, says Dombrowski to BBC Russian Service. “There was a certain confidence from the builders; they began to build houses. Now they built them, but cannot sell”.

According to the Ex-Minister, developers will probably have to cut prices to sell this property to a different category of buyers. “Probably, it will be required to cut the prices quite a lot”, concludes Vyacheslav Dombrowski.

The Most Demanded Professions in Latvia

Drivers, cooks and sewers are most in lack in the labor market of Latvia, said the Director of the State Employment Agency (NVA) Inese Kalvāne on Thursday in an interview to the Latvian TV “Morning Panorama”.

“These professions are in demand in all regions of Latvia and in the centers of economic development”, she said.

Kalvane pointed out that the centers of economic development also require specialists of the manufacturing industry, programmers, repairers; while in rural areas - woodworkers and agricultural specialists.

She reported that 30% of the 85.000 jobless persons registered in NVA are out of work for a long time. “This means that skills and qualification of at least of a third of the unemployed do not meet the requirements of employers”, explained Kalvane.

“Liepājas naftas tranzīts” Changed Its Name

Latvian railway freight forwarder Liepajas naftas tranzits (LNT), 50% of shares of the capital were acquired by a subsidiary of logistics “Russian Railways” (RZD) - “RZD Logistics”, changed its name to Euro Rail Cargo according to information of a database Lursoft.

The name change was registered in the Commercial Register on Friday, April 10.

As previously reported, the Russian JSC “RZD Logistics” (RZDL) has acquired 50% of an authorized capital of the Latvian railway carrier LNT.

“The new project gives “RZD Logistics” the ability to provide stability and rhythm of the passage of goods in transit to Europe”, informs the company.

As the CEO of RZDL Pavel Sokolov said, “entry into the capital of the Latvian carrier aimed at the further implementation of our strategy of entering the European market of multimodal transportation of goods”.

“RZD Logistics” was established as a 100% subsidiary of RZD in 2010 under the development of logistics direction of a railway holding. The company provides service “door to door” (performing railway, road and sea transportation, warehousing, terminal handling, customs clearance and insurance) due to their integration within the group of RZD in a single chain. Last autumn 100% of the shares of RZDL were transferred to JSC “United Transportation and Logistics Company” (OTLK), which is created by the railways of Russia, Belarus and Kazakhstan for container transit of goods between Europe and Asia. RZD now owns 99.84% of the shares in OTLK, the state organization "Belarusian Railways" and JSC “National Company Kazakhstan Temir Zholy” 0.08%.

The LNT turnover amounted to 63.7 thousand euro, but losses - 5.6 thousand euro in 2013.

RZDL owns 50% of shares of Euro Rail Cargo through the Dutch RZDL Multimodal, the remaining 50% ones are owned by Latvian company Locomotive Traction Operator.

The Most Desirable Employers of Latvia

The most desirable employer was the company of energy supply “Latvenergo” in 2014 in Latvia, as showed the research conducted by the recruitment company “WorkingDay Latvia”.

Latvenergo was declared to be the most desirable employer for the third year in a row. The second and third places in this list are taken by the company of e-services “Lattelecom” and “Latvijas Mobilais Telefons” (LMT).

The top ten of the most desirable employers also includes “Swedbank”, “Latvijas Valsts meži’, “Statoil Fuel & Retail Latvia”, “airBaltic”, “Latvijas Gāze”, “Latvijas Banka” and “Latvijas Dzelzceļš”.

As the Marketing Director of “WorkingDay Latvia” Maris Silinieks noted, after the economic crisis in Latvia reputation of employers in the labor market was estimated changeable, because they had to make unpopular decisions, such as reducing the number of employees, salary review. “Now the reputation of employers stabilizes every year. The most important changes are taking place, if the company purposefully improves its image and communicates with employees. A good example is the company “Draugiem Group” (draugiem.lv), which moved to a comfortable modern office in 2011 and reported about it and other benefits offered to the employees in the mass media. This enabled the company rising in the top of the most desirable employers for 28 positions in 2012. So, it preserves its constant 12th place for the third year in a row. This is a significant achievement at time when the companies of IT industry rigidly compete for top talents”, - he said.

Unfortunately, not all employers are aware of how important is the company's image in the labour market for attracting qualified professionals, added Silinieks. “A bad name of the company cannot be “patched” by large salaries. Once the head of the personnel of one company admitted that the company can afford to pay its employees lower wages than the competitors of it because it has a good reputation in the labour market, so everyone wants to work here. This means that the companies saving funds to improve their image, may be forced to pay higher salaries to attract competitive professionals”, - he said.

Liepkalni Builds Confectionery Production

An Estonian company OÜ Pärnamäed owned by the Latvians demolished an old motel in the village of Reiu near Parnu, a new bakery will be built at this place, employing 60 people, informs the newspaper Pärnu Postimees.

More than 250 people are employed by the company Liepkalni in Latvia.

The plot of real estate near the highway has been staying unkempt for several decades, the old motel, which changed owners for several times, was bought by the Latvians in 2010. The new owners plan to organize confectionery production here.

A building of the old motel was demolished this week. It is planned to build a confectionery production with café and shop.

The total area of the new building will be 900 square meters; construction will led the company YIT Ehitus.

A workshop, shop and cafe Pärnamäged will be ready for next spring. It is assumed that 60 people will work here. Staff of the enterprise already includes 16 people.

Since the demolition of the old motel and designing of a new production took a long time, first Latvians established his first confectionery in Parnu, where the confectionery and café Pärnamäged opened in March, 2011.

“Bank M2M Europe”: the Year has Started Well for the Banks Serving International Customers

This year has started well for the Latvian banks focused on serving international customers, said a Chairman of the Board of “Bank M2M Europe” Robert Idelsons to the agency BNS.

“The year of 2015 has begun interesting, generally positive for the banking sector, especially for the banks focused on serving international customers. The crisis in Russia and Ukraine still contributes to capital outflows from the neighbouring eastern countries. The Latvian banks, of course, are not the main final goal of these flows, but still they benefit from this trend”, he said.

Also, Idelsons noted that the beginning of the program on buying bonds initiated by the European Central Bank contributed to higher prices of stocks and bonds in Europe, which increased the income of banks and their customers; in turn, the rapid growth of the US dollar against the euro is good for the banks, which receive a substantial part of the commission in the US dollars.

“It's difficult to say what will be the year as a whole, as much depends on political decisions both in Europe and Russia in connection with the situation in Ukraine”, admitted Chairman of the Board of “Bank M2M Europe”.

“Hill and Knowlton Strategies” Ceases its Activity in the Baltic States

Enterprises of the agency group of public relations “Hill and Knowlton Strategies” ceases it activity in the Baltic States, their obligations in Latvia are transferred to the newly established company Mezgaile, Malina un Austrins (MM&A), informed BNS the representatives of MM&A.

The company noted that after the decision of the group “Hill and Knowlton Strategies” related to ceasing it presence in the Baltic States, the customers in Latvia will be serviced by the agency of public relations and marketing strategies MM&A, formed by the former management team “Hill and Knowlton Latvia”. MM&A will retain the previous team of Hill and Knowlton Latvia.

MM&A will start its work on April 16 after Hill and Knowlton Latvia will fulfil all obligations to customers.

According to Lursoft, MM&A was entered in the Commercial Register on Friday; the share capital of the company is 2800 euro. The largest owner of the company is Janis Austrinsh with 40% shares of the capital; members of the board of MM&A Egite Malina and Linda Mezhgayle own 30% of shares each.

Hill and Knowlton Latvia was established in 1996, its share capital is 7880 euro. The sole owner of the company is a Dutch company Berkeley Square Holding B.V.

The Government Will Raise the Question of the Sale of State Shares of LMT and Lattelecom

The Latvian government is planning to consider the resumption of the working group of three ministers to assess the possibility of selling the state-owned shares of the capital of telecommunications companies Latvijas Mobilais telefons (LMT) and Lattelecom on March 10.

A draft resolution of the Cabinet of Ministers prepared by the Ministry of Economics provides to reconfirm the working group and determine its costs.

The Ministers of Transport, Economics and Finance will have to negotiate with the Scandinavian concern TeliaSonera related to management of the capital shares of Lattelecom and LMT and development of these companies, including their reorganization, change of participants and other measures to enhance the economic value of enterprises and improve their performance.

The working group on the privatization of state capital shares of Lattelecom and LMT was established on December 30, 2010, but during this time there was a change of ministers.

Co-owners of the oldest Latvian mobile operator LMT are the Latvia State Radio and Television Centre (23%), the electronic communications company Lattelecom (23%), the Republic of Latvia in the face of the Ministry of Transport (5%) and TeliaSonera (49%).

Co-owners of Lattelecom are (51%) the Republic of Latvia and TeliaSonera (49%).

Export of the Latvian Enterprises of Mechanical Engineering and Metalworking Decreased by 19%

In 2014, the Latvian enterprises of mechanical engineering and metalworking exported products for 766.414.000 euro - 19% less than in 2013, was reported by Association of Mechanical Engineering and Metalworking Industries of Latvia to the agency BNS.

The cost of exported finished metals included was 262.890 million euro, which is 5% more than in 2013; electrical equipment - 153 235 000 euro, for 20% less; motor vehicles, sidecars and semi-trailers - 124.1 million euro, for 7% less; equipment and machinery not qualified in other sections – 104.243 million euro, for 6% less; other vehicles – 62.783 million euro, for 31% less; metals – 59.164 million euro, which is for 68% less than in 2013.

In 2013, members of the association exported products for 940.358 million euro, which is for 27% less than in 2012.

These data include the enterprises employing at least 20 employees or turnover of whose is not less than 427 thousand euro.

Association of Mechanical Engineering and Metalworking Industries of Latvia was established in 1997.

Real Estate Agents: the Demand for Expensive Private Houses Felt Sharply

Last year, the average transaction amount of a single-family private house in the vicinity of Riga was for 13.7% less than in 2013, according to real estate company Arco Real Estate.

The number of transactions over 200.000 EUR decreased by 35%, thus, the deals worth for more than 300.000 EUR were made for 54% less.

The most expensive transaction recorded in Baltezers (selling at 800.000 EUR) and Babite municipality (in the amount of 730.000 EUR). At the same time, the number of transactions in the segment of expensive private houses decreased in Garkalne municipality by 20%, in Babite municipality by 31.6%.

In Riga, activity with the deals of a single-family houses increased by 26.6%, in Jurmala - 34%. In Jurmala transactions were made in a price range from 250 to 8172 euro per square meter, but the average selling object became a land area of 968 square meters with a building area of 210 sq.m.

The most expensive private house was sold last year in Jurmala, Dubulti on Pupolu Street, which was sold for 8.7 million EUR.

“Turkmenistan Airlines” Starts Operating Flights from Riga 

The Turkmen national airline Turkmenistan Airlines will start transporting passengers from the Riga International Airport, told Head of Communication at Riga International Airport Sarmīte Rinmane to BNS.

A meeting of a new flight from Ashgabat and the press conference will take place at the Riga International Airport on Friday, which will be attended by the leadership of the Ministry of Transport, Chairperson of the Riga International Airport Andris Liepins, First Deputy Head of the Department of Civil Aviation of Turkmenistan Imamberdy Imamberdiev and representatives of Turkmenistan Airlines.

According to the airport’s website, at first, Turkmenistan Airlines will operate its flights on the Ashgabat – Riga– Ashgabat air route.

BNS has already reported, at first, Turkmenistan Airlines announced their plans to launch its Ashgabat–Riga–Toronto flight in February 2015.

Last Year "Ventspils nafta terminals" Increased Transhipment of Oil Products by 10%

A subsidiary of the holding company “Ventspils nafta” – “Ventspils nafta termināls” transhipped 10.58 million tons of oil products in 2014, which is for 10% more than in 2013, evidenced by its message to Exchange “Nasdaq Riga”.

The volumes of oil transportation of the company`s group of “Ventspils nafta” “LatRosTrans” increased by 5% in 2014 - to 5.7 million tons.

As pointed out by the governing body of “Ventspils nafta”, the results of 2014 reflect the content of the business plan and justify prognoses: “The volume of oil and oil products transported by subsidiaries increased slightly, which corresponds to the historical average growth. Also, the work related to the restructuring of a business group continued last year, assets not related to the main activity are implemented, including real estate, medical clinic and shares in the non-strategic enterprises. Thus, it was improved performance of enterprises and reduced costs”.

Major cooperation agreements are renewed in 2015, but the group enterprises are not protected from geopolitical instability and potential strategic decisions of Russia with regard to redirection of the flow of exports of oil and oil products through its ports. “In the worst-case scenario, transportation volumes could fall by 2.5-3 million tons in 2015”, they think.

The Company “DK Daugava” Completely Stopped Work because of Russian Sanctions

The company's work for the production of dairy and bakery products “DK Daugava”, Ltd. completely stopped its work because of the Russian sanctions.

A co-owner of a multibranch company Aigars Vaivars put up for sale a farm and a bakery company belonging to him, going to work within other area in the future - renting of agricultural machinery.

How Vaivars told to the LETA agency, he is selling the cattle farm “Birzes” and the bakery “Serene”. The farm of 400 units is sold for 875.000 euro, the bakery - for 485.000 euro.

“This is a good start for those who want to be engaged in this business”, said Vaivars, adding that the property is not encumbered by any loans or other obligations.

The entrepreneur said that interest from buyers is large enough.

Vaivars owns 30% shares of “DK Daugava”, but the remaining 70% to Russian entrepreneurs. Earlier the company planned to start production of mozzarella cheese for the Russian market, but because of the mutual sanctions of Russia and the EU business has almost stopped.

Turnover of “DK Daugava” was 1.38 million euro in 2013, which is 55% less turnover for the previous year (3.08 million euro). Losses of the company increased to 1.71 million euro in 2013, compared with 1.094 million euro in 2012. Financial performance over the past year has not yet been released by the company.

Veshnyakov: Trade Turnover between Latvia and Russia Has Grown by about 20% Last Year

Despite the sanctions, the trade turnover between Latvia and Russia has grown by about 20% last year, said a Russian ambassador in Latvia Alexander Veshnyakov in an interview to the business information portal Baltic Business Service of the BNS Agency.

On the question what kind of impact on trade between Latvia and Russia had the sanctions entered by the European Union and Russia, Veshnyakov answered that they “gave rise to a certain tension in the mind, in the mood of the relevant long-term plans. Moreover, the sanctions imposed by the EU exacerbated our economic situation and in addition with fairly sharp drop in oil prices, we had the fall of the rouble. The embargo, imposed by Russia in response to the sanctions on food products for the EU countries and for those ones who apply to us these sanctions, affected your market as well, especially the dairy industry. The losses are obvious within this field”.

But despite the sanctions, the trade turnover between the two countries has not decreased, said the ambassador: “At the same time, thanks to the strong foundation that had been in our economic relations, the trade turnover of the expiring 2014 has not declined. It even has a gain of about 20% in the whole year. We expect that the trade turnover may exceed 13 billion dollars this year in accordance to the Russian customs. It was 11.2 billion dollars in 2013”.

“You know about the amount of work of your railroad, about the turnover of your ports. Inertia of positive interaction has not been while preserved, but the anxious expectations are there because of sanctions, unfriendly politics and rhetoric. You know about the decision of “Transneft” to redirect some of their goods in other Baltic ports in this field. First of all, this is explained by entirely logical actions, Latvia had been aware of for a long time that they will be. We developed our port production capacities in Ust-Luga, Leningrad region and elsewhere. Of course, now by creating them we want to load them with work to get the most out of those funds that we invested in. You know that products and goods go to the places, where is a favourable economic and political situation. The situation here is not very favourable in terms of the politics”.

Anticipating further development of relations, Veshnyakov said that they will depend on positive developments in the relations between Latvia and Russia.

"If the positive gleams I talked about in the very beginning will be developed, but I would like them to be developed, I think that the fears of reduction of trade turnover, goods traffic will be minimized. If these gleams go off and without blooming, then perhaps it is impossible to predict the future with optimism”, he said.

The Sudden Swiss Franc Movement or “Black Thursday”

The consequences of the decision of the Swiss National Bank, taken on January 15 led to the insolvency of major companies providing brokerage services - Alpari, FXCM, ExcelMarkets.

Such sudden movements led to exceptional volatility and sharp shortage of funds, in other words, the company's customers have suffered serious losses that exceeded the balance of their accounts.

These losses are passed to the brokers, which in its turn led to their insolvency. The companies Alpari, FXCM, ExcelMarkets were not the only ones who suffered losses.

Many other Forex brokers talk about significant losses: IG Group, FxOpen, FxPro, but these Forex brokers continue working without reporting of the-bankruptcy verge.

Is the bankruptcy awaiting the companies Alpari, FXCM, ExcelMarkets? We can only speak of insolvency at the moment. What awaits them in the future? We can only monitor the further developments. These events have affected to all Forex brokers.

A plant “Liepajas Metalurgs” will resume production in February

A metallurgical enterprise “KVV Liepājas Metalurgs” (KVV), taking over the assets of an insolvent Latvian company Liepajas metalurgs, plans to resume its production in the first half of February, told a member of the board of KVV Igor Kovalenko to journalists on Monday.

According to his words, KVV can employ 1300-1400 people working at full capacity, but at first the plant will require 500-600 workers.

The enterprise administrator of “Liepājas Metalurgs” Harald Velmers handed symbolic keys to the enterprise to Kovalenko on Monday.

As it was previously reported, Velmers signed a contract for the sale of the main production of the enterprise to a Ukrainian company “KVV Group” in October 2.

KVV will pay 107 million euro over 10 years for basic production of “Liepājas Metalurgs”. KVV plans to invest 30 million euro in the resumption of production.

Liepaja Court declared the company insolvent after unsuccessful search of investors on November 12, 2013.

Deflation in the euro area

Prices in the euro area decreased by 0.2% for the period from December, 2013 to December, 2014. Deflation will keep in January as well. This is due to the fall in oil prices, which led to lower production costs of basic goods.

Deflation was recorded by the end of 2014 in the euro area. The last time this event was reported in the European economy in October, 2009. Economists anticipated price decline of 0.1%, so that the final figure was close to the forecast, writes The Financial Times.

As expected, recent data on the negative inflation will push the European Central Bank to the beginning of a full-scale program of quantitative easing, as may be announced as early as on January, 22.

Regulators generally expect that the decline in energy carrier prices will lead to increased consumption. The nuclear measure of inflation, which excludes volatile prices, such as for food and energy carriers, increased to 0.8%.

In general, prices in the euro area were growing during the year for more than less than 1% per month, while the ECB has promised to keep inflation at just below 2%. According to the chief economist for European Affairs from RBC Capital Markets James Ashley, in the created state of affairs should not blame only the decline in oil prices, but also failed fiscal and monetary policy authorities.

In early January, ECB President Mario Draghi said that the euro area threatens deflation in 2015, leading to slower economic growth. This “risk cannot be excluded fully”, but the likelihood of this scenario is low, the banker said.

According to Draghi, high taxes, half-hearted reforms and bureaucracy of decision-making process affect the slowdown.

20 Important Changes in the Laws of Latvia, Which Will Come Into Force from the New Year's

Here is a list of significant changes in the laws that come into force on January 1, 2015, reminds the press-service of the Saeima.

The increase of the minimum wage

The minimum monthly wage will increase from 320 to 360 euro.

Restrictions on social benefits are cancelled

All restrictions imposed are cancelled in 2009 for unemployment benefits, sick benefits, maternity benefits, paternity benefits and parental benefits.

Reduced tax rate on wages

The rate of personal income tax is reduced from 24% to 23%.

Tax benefits for children who work during the summer holidays

Benefits from income tax for individuals who are in dependence on will also apply to children under 19 years, who are trained during the summer holidays and receive taxable income.

State family allowance depending on the number of children

State family allowance for the first child will be 11.38 euro, for the second one - 22.76 euro and for the third and each subsequent child - 34.14 euro.

The range of children with celiac disease is increased, receiving benefits

The benefit will also receive children with disabilities, who study in educational institution or in professional educational institution under the age of 19 years, as well as full-time students, who study in institution of higher education under the age of 24 years.

A day off after the Song Festival

The final day of the Latvian Song and Dance Festival is declared a public holiday. If the final concert will fall on Saturday or Sunday, the next working day will be a day off.

Income tax on micro-enterprises is 11 percent

Tax rate of micro-enterprises in 2015 is set at 11% instead of the previous 9%.

Officials are required to submit detailed information about their income and property

In the declaration of the officials, the public person must indicate official information on their income, as well as provide information about the objects, capital shares and the shares that belong to others, but make a profit to those officials.

You do not have to pay land tax in the case of compulsory lease

The property owners, whose house is located on land owned by another person, do not have to compensate for the land tax.

Changes in the Labour Law

New duties, rights and responsibilities of both employees and employers are set starting from 2015. The changes relate to information in employment contracts and job adverts, vacation days for blood donors, payment of holiday money, regulation of work and leisure time, as well as protection of female breastfeeding employees.

Residents can choose their electricity supplier

Residents can buy electricity on the open market starting from 2015, choosing the favorite supplier. In its turn, the prices of electricity will be kept at the level of start tariff for large families and lower-income persons.

Building control

Supervision of the operation of public buildings starting from the New Year will be provided by the State Construction Control Office.

Changes for fishermen

It will be prohibited to fish with nets in public waters for his own use.

Credit Information Bureau

On January 1, the debt size of the population will reflect the Credit Information Bureau. Participation of enterprises in it and providing information will be voluntary. At the same time, every citizen will be able to check the correctness of his data, and if necessary, update its. Data on obligations of specific individuals will be given only with the consent of this person.

The procedure for submission of a new law

Signatures of the one tenth of the electorate, which are necessary for the initiation of any law, will be in future collected by the initiative group created for this purpose. Signatures can be confirmed not only by sworn notaries, but also in the local government, in orphaned court or at a chief of the department of the region, parish, city. Fee for confirmation of the signature cannot exceed half of the amount that is determined by law to confirm the authenticity of the signature in orphaned court.

New regulation for the arbitration courts

New legal regulation of work and the establishment of the arbitral court will come into force on January 1. A permanent court could create a company registered in the Register of Enterprises, but it must have at least 10 judges. The court should have its premises, office work and staff for the reception of visitors, as well as contain the homepage. In addition, the law also provides the creation of ad hoc arbitral court for any particular civil dispute.

The Chamber of Criminal Cases of the Supreme Court will cease to exist

The transition to the so-called system of “pure courts” is going on in Latvia. The Supreme Court (SC) will consider criminal cases only on cassation starting from 2015.

This new system provides that all cases of the first instance will be considered by a district (city) court, of the appeal one – by the District Court and of the cassation – by the Supreme Court.

The procedure for the management of public enterprises

A new regulation enters into force, determining the principle, activity, liquidation and the procedure of management of shares of the capital of state and municipal enterprises.

Law on Land Management

The new law establishes the procedure for land management of state and local governments.

Laima Will Invest 3 Million Euro in the Production of New Chocolates

The largest Latvian manufacturer of sweets Laima plans to purchase new equipment for the production of chocolates for more than 3 million euro, informed the chairman of the group of NP Foods Roland Gulbis to BNS.

“We have received the state support for the project “Value-Added Investment” of the European Regional Development Fund program”. There are actually a lot of different equipment and technologies, after debugging which we can finally begin to produce entirely new kinds of products - chocolates. Maybe we will finally enter the 21^st century. It will be multi-layered chocolates, we can offer the consumers a lot of what is really new”, he said.

As it was reported on the website of the Public Procurement Monitoring Office, the Danish company Aasted ApS won the tender for the supply of one production line - it will deliver Laima the production line for manufacturing of chocolates for 1.08 million euro.

“DNB banka” Allocated the Loan in the Amount of 17.5 Million Euro to “Latvijas Dzelzceļš”

“DNB banka” allocated the loan in the amount of 17.5 million euro to the Latvian railway company “Latvijas Dzelzceļš” (LDz), informed BNS the head of public relations department of the bank Teika Lapsa.

LDz plans to invest the funds in improving the railway infrastructure, increasing the efficiency of freight traffic and quality of services provided.

“Though, the overall decline in demand for coal, oil and oil products in the EU affects the traffic in Latvia, despite the risks, which may create the current geopolitical situation in the short-term perspective, the long-term investment in the development of LDz is very important. Besides LDz is one of the most recognizable and significant Latvian companies, it should be certainly noted its significant contribution to employment in Latvia", said a Vice President of “DNB banka” Lauris Matsievskis.

In his turn, a Vice President of LDz Aivar Strakshas had specified that taking into account the geopolitical instability in the world, it is important to complete the initiated investment projects to preserve the competitiveness of Latvia in the international transit business. “We are working that the projects implemented by us would enable us not only to maintain good cooperation with customers, but also attract new customers and goods”, he said.

Milkmen of the Baltic States May Receive Additional Support from the EC in the 2015

Milkmen of the Baltic States may receive additional support due to the losses for the response of Russian embargo next year, reported a Deputy Chairman of “Zemnieku Saeima” Maira Dzelzkaleya on Thursday to BNS after a meeting with the Commissioner for Agriculture and Rural Development of the EU Phil Hogan.

During a meeting with the Commissioner Latvian farmers pointed to the unacceptability that the farmers of some regions pay for political decisions of Europe, as well as the need to resolve the situation in the Baltic States and Finland, she said.

“The Commissioner has promised support if necessary. The situation is monitored and if the issues of relations with Russia and search of new markets will not find a quick solution, then other measures would be considered”, said Dzelzkaleya, adding that the European Commission is studying the situation in Finland as well. Therefore, the farmers of this country can hope for some support.

According to her, the Latvian farmers are satisfied with the outcome of the conversation in general, positively evaluating the possibility of further cooperation with Hogan. “It was the first meeting with the European organizations of agriculturists to the Commissioner. He was very constructive, focused on the real solution and is willing to cooperate with the agriculture sector to make this common agricultural policy more user-friendly and easy for farmers, quickly solve the problems. In general, we liked the Commissioner. He convinced us that cooperation can be real and constructive”, said she.

She added that it will be known on December 8 whether the Latvian farmers receive support in the coming year, when the European Parliament will hold negotiations with the European Commission on the budget 2015.

It has been already reported that the European Union is intended to offer the dairy industry of the Baltic States aid package of more than 28 million euro to mitigate the impact of response Russian sanctions.

Funds of this package will be distributed among the Baltic States on the basis of the volume of milk production accordingly to the allocated quotas in 2013/2014. Dairy producers in Latvia can receive 7.7 million euro in accordance with this principle,

On August 7, Russia has imposed embargo for a year on the import of a number of categories of food from the EU, US, Australia, Canada and Norway in response to the sanctions imposed against it. It is related to the supply of beef, pork, fruits and vegetables, meat of poultry, fish, cheese, milk and milk products.

The Minimum Hourly Wage Rate Will Increase to 2.166 euro in the Coming Year

The minimum hourly wage rate will increase from 1.933 to 2.166 euro next year in Latvia, told a head of the Communication Department of Ministry of Welfare Marika Kupce to BNS.

The monthly minimum wage will be 360 euro from January 1, 2015. The government clarified minimum hourly wage rate on Tuesday that is necessary for the calculation of the monthly minimum wage in accordance with the new minimum wage and working time calendar in 2015.

The current minimum hourly wage rate of 1.933 euro will rise to 2.166 euro from January, 1. In addition, the minimum hourly wage rate will increase from 2.209 to 2.477 euro for teenagers and those at particular risk, since they are allowed to work not more than seven hours in a day and 35 hours per week as a whole according to labour legislation.

It is provided by the rules on the minimum monthly wage and the minimum hourly wage rate approved by the government on Tuesday, developed by the Ministry of Welfare.

The Ministry of Welfare reports that 200.1 thousand of people were receiving earned income in the amount of the monthly minimum wage and less in September 2014, including in the private sector, there were 174.600 of people, in the local government sector - 16.1 thousand of people, in the public sector - 9.3 thousand of people. Exactly the minimum monthly salary received 35.8 thousand of people in September, including in the private sector – 29.400, in the sector of local government – 5.5 thousand of people, in the public sector - 0.9 thousand of people.

As it was already reported by BNS that the government decided to increase the minimum wage from 320 to 360 euro per month in the next year.

Lithuanian Manufacturers of Household Chemical Goods Take Interest in Latvian Market

Alytus companies producing household chemical goods Koslita and Alytaus chemija prefer local buyers, who provide most of the revenue, but the most attractive export market for them is Latvia - there they export more and more of Lithuanian car cosmetics and household cleaning products.

Koslita has been exporting various detergents and cleaners for three years to retails shops of Latvia. The company exports 5% of its products to the neighbouring country, but the company Alytaus chemija entered the Latvian market only this summer - it established a joint venture in Latvia together with local partners and started to export products produced in Alytus, so you can already buy car cosmetics of its production in Latvia, wrote a business newspaper Verslo zinios on Friday.

Prior to that, most of the products were sold by Alytaus chemija in Lithuania, small amount of products has been exported to Belarus; in total about 5% of products of Alytaus chemija is exported. Koslita is not planning to expand its export markets in the near future, some time ago the company exported products to Belarus and Russia, but because of the small sales there it refused to supply to these countries.

Fazer Opens a New Production in Latvia

Construction of a new bakery of Finnish food group Fazer began in Ogre. Opening is scheduled for September of the next year, 40 new workplaces will be created in Ogre. Most interesting is that a part of the production lines of the company Fazer in Tallinn is moved in this Latvian town, but the Estonian production will be closed in April 2015, work will lose about 95 people. All of this is almost a mirror reflection of the situation in “Aldaris”.

Only in the case of the brewery, on the contrary, a part of the Riga facilities were closed and moved to Lithuania and Estonia. Why did the bakers prefer Latvia, not Estonia, which is usually cited as an example by industrial workers?

-Matter is not in the economics of one or another country, explained the Director of Communications of “Fazer Bakery Baltic” Baiba Gulbe to “Vesti Segodnya”. – It is more modern production in Ogre than in Tallinn, with lots of potential, a lot of areas for development, expansion. The Tallinn production was built in 1994; we need to make large investments in its modernization, to maintain a high level of production. A bakery in Ogre is built in 2007, where is the latest modern equipment.

The company`s production in Kaunas will be expanded as well, but more than 5 million euro will be invested in the Ogre one. According to Gulbe, works are expected to be completed in the spring, but in summer training of the workers will be carried out, because a new enterprise will open in September.

Where do employers plan to find workers? According to Gulbe, it is really one of the largest problems. In spite of unemployment in the country, there is lack of working hands. However, the problem is expected to be solved at the expense of the inhabitants of Ogre and neighbouring regions. An option of migrant workers from Tallinn is not even considered.

Products of a new production will be fully exported to Finland. Sandwich bread has been already delivered there, other one will be delivered as well. However, there are different taste preferences, so the bread will be different, not the one that is for Latvia. At the same time, she said, in the recent years no any baker in the country has became richer, because all earned is invested in production to make it more effective.

However, bakers are not always worth complaining about the growth of everything. Farmers, for example, say that such a low purchase price for grain has not been for a long time. And, then, flour will be cheaper. The company believes that the decline in the price of flour can only somehow balance the rise of prices in other costs.

The Latvian Government Decided to Increase a Minimum Wage to 360 Euro in 2015

On Monday, the Latvian government at an extraordinary meeting decided to increase the minimum wage by 40 euro from January 1, 2015 - from the current 320 to 360 euro per month, reported to BNS in the Ministry of Finance.

“It was emphasized the need to continue the work on reducing income inequality of people in the pre-election period, as well as to increase the minimum monthly salary in the country. This promise was fulfilled by the government, however, we must continue the work and move forward to establish a differentiated non-taxable minimum income, thus supporting the recipients of small wages”, said the Minister of Finance Janis Reirs (Jānis Reirs).

In 2016, it is planned to introduce a progressive minimum which is tax-free from income tax, as well as increase the benefits for paying of income tax for the dependents being in the charge, considering the increase of the benefits for the second and each subsequent child in order to reduce income inequality of residents.

It is planned that in 2015 the minimum wage will be increased in all three Baltic States: in Latvia from 320 to 360 euro, in Lithuania - from 290 to 300 euro, in Estonia - from 355 to 390 euro.

Norwegians Propose to Build a Liquefied Natural Gas Terminal in Latvia

The Norwegian company BW Maritime intends to build a marine terminal for liquefied natural gas (LNG terminal) in Latvia. The main condition is the ability to connect a gas pipeline of the future LNG terminal with the underground gas storage in Inchukalns.

Now it is under the control of the Latvian monopoly gas company Latvijas Gāze, which is controlled by the Russian raw giants “Gazprom” and “Rosneft” as informs the program "Nekā Personīga" on a TV channel TV3.

BW Maritime is ready to invest their own money in the construction of an LNG terminal in Skulte and the object`s connection with gas storage in Inčukalns with the help of a gas pipeline. Total costs of the project are valued at 150 million euro. This is four times less than the amount of investment that was required to build a floating terminal for storage and regasification of liquefied natural gas Independence, which will start working in Lithuania, in the port of Klaipeda this year.

BW Maritime as a fleet of 18 liquefied gas tankers that transport LNG worldwide.

“We are the world's largest company that is engaged in transportation of LNG. We are looking for 40-50 alternative projects and the Latvian project is one of the most attractive. We have been working on this issue for two years. We had meetings with ministers in December, 2013 and January, 2014. They assured us that we can move forward with this project. We were slow as well, but now we have received an approval of the company that allows moving forward. We have allocated money for the continuation of the project” - says the general manager of BW Maritime Arnfinn Unum.

The main condition for the start of the project is the ability to connect the LNG terminal with underground gas storage in Inčukalns with the help of a gas pipeline. Norwegians wait when Latvia will fulfil all requirements of the European Union`s Third Energy Package of reforms in the field of gas and electric power and divide Latvijas Gāze into few companies that will individually deal with trade, transportation and storage of gas.

However, according to Nekā Personīga, this process is delayed and can be ultimately resolved only by 2019.

Co-financing for the project can be provided by the European Commission, however, the discussion about this can begin not earlier than in 2016 in Brussels.

Sanctions and Consequences: Latvian Railways is Preparing Lay-Offs

Systemically important sector of the economy of Latgale - railway - got into a difficult situation. Because of the war of sanctions, inspired by the European Union, falling of turnover is continued on the railway. Companies engaged with maintenance of cargo and repair of rolling stock incur losses. The next plan is the beginning of employee lay-offs.

It is hardly can somehow change the situation that Latvia has not supported direct sanctions against the Russian Railways and its head. About 80% of the cargo served by the Latvian Railways is cargo from Russia or to Russia. Losses that politicians have already caused to the industry are huge.

According to sources from several publications in the edition “Nasha” a plan of lay-offs is currently developing on the railroad, in the leadership of the Latvian Railways. It is known that about 50% of all costs associated with the operation of the railway are the salary costs. Savings will start from here, accordingly to the sources of “Nasha”. It is clear that the greatest shocks due to reductions will occur in Latgale, namely, in Daugavpils - the largest railway hub in the Baltic States will feel the effects of lay-offs personally. And at the same time the whole city, because every third family in the city in one way or another is related to the railroad or Locomotive repairing plant.

Expert: prices for housing in Latvia will fall, but it will be more difficult to buy it

Lending market in Latvia is very risky, banks do not have the right to vote, so they are voting with their feet, commenting on the situation with the amendments to the Law on Insolvency and the introduction of the principle of “the keys on the table”, said a consultant of the Association of Commercial Banks of Latvia Casimir Shlyakota for radio Baltcom.

Loans based on the conditions of “the keys on the table” are issued in the United States, when in the course of insolvency of the debtor his housing is sold and after he gives his keys, the remaining obligations of the debtor will be redeemed. This is the only country in the world, practising of such loans, but there is nuance – it's not only the right of the borrower, but also the right of the bank to demand the keys, said Shlyakota, emphasizing that in such a situation the more American banks demanded the keys, the more was the falling of the price of real estate.

The consultant is sure if the president of Latvia will declare these amendments, banks will increase initial fees for mortgages, which are now quite large.”In rich society people can pay 30-40 percent as initial fee, but it is difficult to save that kind of money for our residents. According to our analysis, there are 700.000 households in Latvia, 100.000 of them would like to improve conditions, but only 5-6 thousand say that they can collect enough money for initial fee. So loans are issued to those 5-6 thousand”, said Shlyakota.

In opinion to the consultant, the situation with a mortgage affects the fact that banks offer very low interest rates on deposits. “With the help of lower rates the banks show that it is not necessary to put money on deposit, they have nothing to lend. I am m not saying that it will be necessary to pay extra for that banks which keep your money, but it is also possible as, for example, in Japan”, thinks Shlyakota, who believes that essentially there is no place to invest in Latvia: exchange is weakly developed, while interest rates on public bonds are low.

The consultant predicts that prices in the housing market may soon fall, as the housing stock becomes old, but the new one is not created - it requires a buyer. "Housing, which is far from Riga, already has fallen in price. The housing mortgage outside the region of Riga in general will not be available soon, as the bank will have difficulties to sell it. Trend will lead to the fact that people, who will not be able to buy housing in Latvia, will leave the country", considers Shlyakota.

Shlyakota emphasized that lending of businesses or residents is closely related. A number of credits for residents are reduced and lending of business reduces as well. At the same time the consultant believes that young businessmen do not have any chance for a loan at all. "There are almost no banks, which are willing to lend to such risks in Latvia. I have hope for buyers of Citadele, which could offer such kinds of loans. If not, then entrepreneurs will be able to erect a monument to the current government”, the expert concluded.

We want to remind that Swedbank and SEB banka are the largest banks in Latvia in terms of mortgage loans suspended their participation in the state guarantee program of housing for young families.

This decision was taken due to amendments to the Law on Insolvency approved by the Seima, providing the introduction of the principle of "the keys on the table" with respect to single housing of debtors, which is the pledge for the loan.

At the same time, the Association of Commercial Banks of Latvia (ACBL) appealed to President Andris Berzins not to declare the amendments to the Law on Insolvency, providing the introduction of the principle of “the keys on the table”.

ACBL believes that this rule will essentially complicate the issue of mortgage loans, hamper the development of the national economy and improving the living conditions of people, as well as promoting the development of „culture of non-payments”.                 

TOP 10 of the Most Successful Foreign Investors in Latvia

Edition VIP Lounge in collaboration with Lursoft published a ranking of successful foreign businessmen, foreign owners of the Latvian companies. In total, a foreign dozen earned 80 million euro per year in Latvia. We offer to look closer at them.

1. Dmitry Mazepin — 23.9 million euro

Although one of the largest companies in Latvia according to its turnover - Uralchem Trading officially belongs to the Cyprus offshore, we know that the notorious Russian billionaire Dmitry Mazepin stands behind it, telling himself about it in an interview to the Latvian media. According to Forbes, he owns 95% of the company „Uralkhim” today, producing a quarter of ammonium nitrate in Russia and is the leader in this segment. However, if his fortune was estimated at 3.2 billion dollars in the past year, in this it is only 1.4 billion dollars. The reason is a sharp deterioration of the conjuncture in the global fertilizer market.

The Latvian company successfully serves the export direction: the company's turnover reached 1.12 billion euro last year, earnings — 23.9 million euro. Precise information on the shareholder structure of the Cyprus offshore is unknown, but... with a considerable degree of probability can be assumed that most of the profit “has to do with” Mr. Mazepin.

2. Dermot Desmond — 20.5 million euro

One of the largest shareholders of JSC Rietumu banka, who controls 33.11% of the company`s capital, has been involved as an investor in August, 2005. Fortune of the well-known in Europe „Hunter of Undervalued Assets”, a citizen of Ireland, is estimated in two billion dollars by the magazine Forbes. One of the largest of his deals is buying shares of the capital of the London airport in 1995, which he resold profitable in 2006. He owns the football club of the Irish Premier League "Celtic". He is known as an avid golfer.

According to the audit report, the profit of the group of JSC Rietumu banka, which includes more than a dozen of subsidiaries was 61.55 million euro last year. Accordingly, the share of Mr. Desmond is 20.5 million euro.

3. John Tully — 11.8 million euro

A citizen of the USA and a business partner of not too well-known to the general public Arnis Riekstinsh, with whom he equally controls Mikrotikls, Ltd. — a large manufacturer of equipment for wireless internet.

We do not know much about him: he came to Latvia in the early 1990s, he married a Latvian woman, most of his time he spends in Riga. According to experts, successfully global sales of the company are carried out thanks to John Tully, while the Latvian shareholder A. Riekstinsh allegedly is largely responsible for the “iron”.

Well, in any case the result is impressive: the company has overcome the indication of sales of 100 million euro and earned 23.6 million of profit for the first time last year. Also, Mr. Tully fully owns the company Maksina, Ltd., whose contribution to the welfare of the American, however, is still small: it earned 4 400 euro last year.

4. Yuri Scheffler — 5.4 million euro

Indirect owner of the famous vodka brands „Stolichnaya” and “Moskovskaya”, a native of Russia, a citizen of Israel, sometimes a resident of Jurmala, controls 86.45% of the largest alcohol producer JSC Latvijas balsams in the Baltic States through the structure of the S.P.I. group.

The company, which increases earnings for the third year in a row and develops the export of its products to Russia, Ukraine and China, earned 6.23 million euro last year; 5.39 million of whose belong to the S.P.I. group owned by Mr. Scheffler. A curious fact: there are such famous people as the Russian billionaire Petr Aven and a former Prime Minister of Latvia Aigars Kalvitis in the board of LB, which is indirectly owned by Mr. Scheffler.

5. Igor Kim — 4.6 million euro

This well-known in Russia businessman wholly owns one of the oldest banks in Latvia JSC Expobank since 2012, opened back in 1991. A Latvian institution almost does not get in the local “news lines”, working with non-residents and earns good. Net profit of the bank amounted to 4.62 million euro last year.

Igor Kim is known as a banker in Russia, who owns 69% of „Expobank” (by the way, this bank has come under the sanctions of the Canadian government dated for the joining of the Crimea to Russia). Also, Kim owns a chain of restaurants „Food Master” and about 40,000 meters of commercial real estate in Novosibirsk. He was twice voted in Russia as „Banker of the Year”. The capital of a businessman was estimated in 460 million dollars by the magazine Forbs in 2013.

6. Jon Helgi Gudmunson — 3.4 million euro

An Icelandic businessman who has been working in Latvia for long time first arrived in our country for “business intelligence” back in 1993. The sole owner of Norfolk, Ltd. is a holding company that unites the Latvian assets of an Icelandic entrepreneur. It earned the above-mentioned profit.

However, he is better known for the purchase of 51% of the bank Norvik (then Lateko banka) at his time, which was announced in 2006. Later, however, it turns out that this investment is not too successful and the Icelandic capital will be off of the bank. In 2006, Mr. Gudmunson also acquired a company producing household chemical goods Spodriba (data about the current shareholders are not available) and one of the nation's largest producers of lumber Vika Wood, which today is a part of the Icelandic concern of Mr. Gudmunsona - Norvik.

7. Balram Chiang Rai — 3.1 million euro

One more foreign shareholder of JSC Rietumu banka. Almost unknown in Latvia British citizen and a resident of Hong Kong became the owner of 5% of shares of Rietumu after the crisis — in March, 2010, buying up shares from one of the former owners. At that time his general capital was estimated at one billion dollars.

The main activity in the homeland is the production and sale of electrical and computer engineering. In addition, he invests in real estate, hotel business and the entertainment. He has not been seen in the Latvian public space.

Since the profit of the group of JSC Rietumu banka was 61.55 million euro, Chiang Rai has 3.1 million euro.

8. Heinrich Strenge — 3 million euro

A German citizen who is not well-known to the general public wholly owns Florabalt, Ltd. and Kudras Energija,Ltd.: both companies are engaged in extraction of peat and provided its owner with 1.6 and 1.4 million of profit respectively.

9. Igor Sokol — 2.4 million euro

A citizen of the USA and the largest shareholder (35%) of the stevedoring company Alpha Osta, Ltd., operating in the Port of Riga with transit cargo of mineral fertilizers. This company earned 6.8 million profits last year. He lives in Boston, visits Latvia, does not seek for publicity. He does not have any other companies in Latvia at the moment, but he was one of the founders of the well-known company such as Mono in the 1990s.

10. Stephan David Balkin — 1.9 million euro

Danish citizen and owner of 82.7% of JSC Tukuma piens, which is a large dairy plant, selling products under the brand "Baltais" with an annual turnover of 49 million euro.

The company earned 2.3 million euro last year, which provides Mr. Balkin a place in the top ten 10 of the most-earning foreigners in Latvia.

Samsung introduced a smartphone with a curved display

As BBC reports, the South Korean company Samsung Electronics introduced a smartphone with a curved display Galaxy Note Edge at the exhibition in Berlin.

One of the most important and the world`s largest exhibitions of consumer electronics IFA-2014 was opened in Berlin on September 5. Experts say that smartphones and mobile computers are the main themes of this year at IFA, because users update them more frequently than tablets and laptops.

Samsung introduced its new products without waiting for the opening of expositions.

During the presentation of Galaxy Note Edge, the company`s representatives emphasized the fact that the curved display provides a new way to access frequently used applications. One edge of the smartphone`s display curves, making a narrow side strip functional, even in the time when the rest of the display is covered with a case.

In addition, the public was presented a virtual reality helmet Gear VR, the next version of the smartphone Galaxy Note 4 with a large display and "smart watches".

The latest virtual reality helmet is the result of collaboration between Samsung and Oculus, owned by Facebook. The helmet is paired with Galaxy Note 4 – it uses audio and the smartphone`s display, which diagonal is 5.7 inches (14.5 centimetres).

Samsung, the world's largest mobile phone producer, is going through hard times now. Thus, the second-quarter net income fell by almost 20%, but the rate reductions occurred for the first time in nearly three years (since the third quarter of 2011).

According to research company IDC, Samsung`s share of the smartphone market decreased in April-June to 24.9%, compared with 32.2% in the second quarter of 2013.