The European Sustainability Reporting Standards, which we had been awaiting since the adoption of the Corporate Sustainability Reporting Directive, were approved in late July. The directive aims to provide transparent publicly available information on social and environmental risks facing companies, on new opportunities, on what activities companies are already doing, and on their future goals and ESG results achieved so far. Details of which companies are subject to the directive’s requirements can be found here.
Regulation (EU) 2023/956 of the European Parliament and of the Council establishing a carbon border adjustment mechanism (CBAM) came into force on 17 May 2023. This so-called “carbon tax” applies from October 2023, with companies subject to CBAM being liable to file their first CBAM reports in January 2024. Carbon emission certificates will have to be purchased from 2026. In this article we are explaining in detail which companies are subject to CBAM.
One EU individual on average discards 11 kg of textiles a year. Globally, a consignment of textiles is buried or incinerated every second. The global production of textiles almost doubled over the period from 2000 to 2015. Clothing and footwear consumption is expected to grow by 63% by 2030. In this article we’ll be looking at some of the EU’s proposed measures to address the problem of textile waste, as well as discussing what’s being done in Latvia and what we can expect in taxation.
Today’s understanding of sustainable growth is based on the idea expressed in “Our Common Future”, a 1987 report from the UN World Commission on Environment and Development: Sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs. This means that countries globally must plan their development in a way that not only boosts their economic development rates but also maintains the quality of life and prevents environmental degradation and overexploitation of natural resources.
In November 2022 the European Parliament officially approved the Corporate Sustainability Reporting Directive. The EU member states, including Latvia, now have 18 months to pass the directive into their national law. This enactment is intended to improve the quality of available non-financial information, meet the needs of various stakeholders, and promote Europe’s joint transition to a more sustainable economy.
As Europe is pressing ahead with its Green Deal, the relevance of environmental taxation is growing rapidly in Latvia and across the EU. Our experience suggests that Latvian companies are much better informed about the natural resource tax (NRT) treatment than foreign persons doing business in Latvia. This article serves as a reminder of the NRT treatment for foreign persons. This information may also help Latvian companies identify cases where a foreign supplier has Latvian NRT obligations, which are either not discharged or wrongly shifted onto the Latvian company.
The mergers and acquisitions (M&A) space is justifiably perceived as one of the indicators of economic activity – greater interest in acquiring, merging and investing in companies means more dynamic development of the economy. Compared to recent years, 2021 set a record in terms of number and volume of transactions (up by 48% in the Baltic States) but 2022 saw a slowdown in M&A activity because of geopolitical turmoil. Some transactions are still taking place, while others are put on hold, and the business community is preparing for times that will bring more certainty and stability. Since a successful M&A transaction needs preparation, this is a good time to do the homework while considering the next cycle of economic activity.
The Electrical Energy Tax Act and the Cabinet of Ministers’ Rule No. 52 of 24 January 2017, Procedures for Applying Electrical Energy Tax Exemptions, have been amended with effect from 1 January 2023. Key amendments relate to exemptions on electricity that directly ensures the production of electrical energy.
The last decade has seen a considerable increase in regulatory requirements in the governance and non-financial reporting space. At the same time, various stakeholders (shareholders, employees, customers etc) are expecting reliable, high-quality and standardised information from companies on their governance practices and non-financial performance. Both of these factors affect companies in Latvia as well.
Council Regulation on an emergency intervention to address high energy prices came into force on 8 October 2022. Its purpose is to prescribe a set of measures that will contribute to the member states’ energy supply and mitigate the impact of high energy prices on consumers and the member states’ economies. This article explores several groups of measures the member states are required to adopt under the Regulation.
When it comes to drawing up non-financial statements or sustainability reports, there are a variety of guidelines and standards that prompt companies to identify and approach their various stakeholders in order to work with them in the course of preparing non-financial statements. It’s even more important to build collaboration in order to accommodate your stakeholder views and visions when your company is setting its key directions of sustainable development and goals it wants to achieve.
The rules for implementing the aid programme “Financial instruments for encouraging digital transformation of businesses” under the EU Recovery and Resilience Facility came into force on 5 July 2022. The programme is designed to encourage the digital transformation, development and revenue growth in businesses by supporting investment in digital information tools aimed at productivity gains. The aid is targeted at Latvian-registered businesses regardless of size. This article takes a closer look at the aid programme.
