Our Flash News edition of 12 July 2022 informed MindLink subscribers about a new aid programme based on rules recently adopted by the Cabinet of Ministers. In that article we looked at eligible entities, qualifying activities and excluded industries. This article explores the aid instrument and the programme’s status.

When external conditions are especially challenging, smooth internal processes and readily available information may prove to be a key aspect of improving your competitive edge. Today’s finance function is challenged by changes in the business environment and economy and by disruptive technology, so a CFO equipped with financial knowledge alone is no longer enough. In its annual CFO survey, PwC finds out what problems are facing companies in areas that CFOs keep on their radar as a top priority in order to grow their company and improve the performance of its finance function. This article summarises findings of the CFO survey conducted by PwC CEE and opportunities we see for supporting CFOs.

The Cabinet of Ministers Rule governing a new aid programme for improving energy efficiency in manufacturers and exporters came into force on 18 June 2022. Businesses can apply for aid to cover their overheads, i.e. for a loan (or a parallel loan) of up to EUR 5 million from the Altum Development Finance Institution. Up to 30% of the loan principal can be cancelled as a capital allowance. The aid can be used on costs associated with improving energy efficiency or introducing renewable energy resources for personal consumption by businesses in non-residential buildings and warehouses. This article explores some aspects of the new aid programme described in the publicly available wording of the Cabinet Rule.

In March 2022, PwC conducted the “Global Workforce Hopes and Fears” survey of 52,195 individuals who are in work or active in the labour market. That was one of the largest ever surveys of the global workforce, covering a range of industries, demographic characteristics and working patterns in 44 countries and territories.

As Russia continues the war in Ukraine, the US and the European Union (EU) together with other countries keep increasing the size of sanctions imposed on Russia.

At the EU summit held on 30–31 May 2022, the European Council agreed on the sixth package of sanctions against Russia that will mainly apply to crude oil and petroleum products supplied to EU member states. Yet the Council of Europe has agreed a temporary exception for crude oil supplied through pipelines. Ursula von der Leyen, President of the European Commission, has said that the restrictions included in the package will in fact stop around 90% of EU oil imports from Russia by the end of this year.

As the size of the sanctions grows, confused companies are having more and more questions about how to cope with the increasing sanctions burden, whether a company is supervised by particular regulatory bodies, and whether the current sanctions rules and guidelines provide for setting up an internal control system to manage sanctions risk.

Productivity has always been high on the agenda in organisations. Remote and hybrid working during the pandemic has brought some new advantages as well as complex challenges. When trying to put our processes back on track, we often focus on the process itself and how to streamline it, yet people play a big role in the productivity puzzle.

As the cost of living is rising day by day, people are struggling to embrace the need to cut carbon emissions as a priority. Tax policy is one of the tools capable of affecting our decisions. So it is very important to devise a long-term tax strategy that would encourage us to change our daily habits and switch over to green energy.

The member states may even introduce a specially reduced rate of VAT (down to 0%, without restricting the supplier’s right to deduct input tax) on supplies of solar panels to private homes and public buildings. A reduced rate may also be applied on supplies of electricity, district heating and cooling, and certain biogas, as well as on the supply and installation of certain very efficient low-emission heating systems. Latvia will have to stop applying a reduced rate on supplies of wood used as fuel by 1 January 2030.

This article explores some of the tax implications for people installing solar panels at their homes.

Today’s reality shows that environmental, social and governance (ESG) matters are becoming central to new corporate strategies, increasing the importance of the role ESG leaders and experts play in organisations and their governance structure. A modern ESG leader not only has to understand the interaction between the various ESG matters and their impact on the company’s lines of business but must also be able to integrate ESG in the company’s operations, inspiring the other staff to action. PwC’s latest survey “Empowered Chief Sustainability Officers” offers insights into how the role of an ESG leader has evolved over time and how ESG leaders can make a tangible difference in their companies by combining the various ESG aspects with the company’s operations, thereby helping the company transform and undertake more sustainable operations. A key finding of the survey is that organisations whose governance structure has a clearly defined role of the ESG leader are able to achieve higher indicators in sustainability areas.

We are inviting you to listen to a PwC tax podcast about the accounting control system, about the plans of the State Revenue Service to introduce penalties for delays in submitting mandatory declarations and reports, as well as about current issues related to the company's transfer.

Four years of work have been crowned with amendments passed to the VAT directive concerning a reduced rate of VAT on 5 April 2022. The new provisions will give the governments of the EU member states greater flexibility in applying the rates and will ensure transnational equality. The reduced rates clearly point to EU shared priorities, such as protection of public health, fight against climate change, and support for the European Green Deal, while preparing to phase out the current preferential regime for environmentally damaging supplies.

This article completes what we wrote last week.

The Covid-19 pandemic has thrown the global economy into recession. However, the warning issued by the industry experts and backed by the authors of a World Bank study  that the economy will experience a rapid increase in the number of insolvency proceedings and legal protection proceedings (LPP) at the end of Covid-19, has not come true as yet. This is because the financial difficulties brought on by the pandemic were countered with an unprecedented government intervention in the market and a huge package of financial aid, including working capital grants and idleness benefits. The economic downturn is now being aggravated by Russia’s invasion of Ukraine, as the consequences of the war are pushing up energy prices and fuelling price rises in general, inevitably leading to debt crises. Latvia seems likely to face an inevitable wave of insolvencies and LPP, so this article aims to introduce companies to Latvian LPP and out-of-court workouts in simple terms in order to highlight the characteristics of these debt restructuring tools, as well as the role of the debtor, the creditors and the supervisor within these proceedings.

Every two years the Ministry of Welfare prepares an informational report on the operation and development of social enterprises (SEs) for submission to the Cabinet of Ministers. The latest report on SE development, with information relevant to companies seeking SE status, was submitted on 30 March 2022. This article explores what SE status is and what aid measures it offers, as well as providing an overview of the information included in the report and of proposals for amending the SE Act.

The preparation of annual accounts is relevant to each company, and this process often involves making multiple changes that have a direct effect on the numerical information presented in the company’s financial statements. Accounting software mostly ensures automatic preparation of the balance sheet and the profit and loss account, yet companies, depending on their size, may have to produce a number of notes that tend to take a long time to prepare. In this article we share recommendations for accelerating the technical preparation of financial statements.

This article looks at the principles of tax treatment when a Ukrainian national provides services to individuals or entities in Latvia.