Saeima supports non-taxation of subsidies

On Thursday, February 4, the Budget and Finance (Tax) Committee in the Saeima unanimously supported the amendments to the law “On Corporate Income Tax” jointly submitted by the association “Farmers’ Saeima” (ZSA) and MP Edgars Putra. The adopted amendments provide that subsidies granted to farmers in 2017 and 2018 – state support for agriculture or European Union support for agriculture and rural development – will also not be subject to corporate income tax (CIT).

ZSA welcomes the decision of the Saeima to support Latvian farmers. The Saeima's understanding and approach to Latvian farmers in this matter is very important. The lowest direct payments throughout the EU reduce the competitiveness of Latvian farmers among farmers in other EU countries. The further non-taxation of subsidies for CIT payers is a real step towards promoting the development of Latvian agriculture.

We remind you that at the end of last year, the Saeima supported the amendments to the Law "On Personal Income Tax" prepared and submitted by ZSA and E. Putra, in which we called for determining that subsidies granted to farmers who are PIT payers in 2017 and 2018 are not subject to tax.

Opportunity to familiarize yourself with the information considered during the meeting, as well as the proposal submitted by the ZSA:
http://titania.saeima.lv/LIVS12/saeimalivs12.nsf/webSasaiste?OpenView&restricttocategory=468/Lp12

For information:
The average European Union level of area payments per hectare is currently approximately 256,- EUR/ha, but Latvian farmers currently receive approximately 88,- EUR/ha. In 2020, in the best case scenario, this amount in Latvia could reach approximately 132,- EUR/ha, thus not even reaching the average European Union level. Also, transitional state support in agriculture will decrease already in 2016 and in the following years. If in 2015 it amounted to 51 million EUR, then in 2016 it is 26 million EUR, but in 2017 it is only 1.5 million EUR.