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Text consolidated by Valsts valodas centrs (State
Language Centre) with amending laws of:
14 May 2020 [shall come
into force from 11 June 2020].
If a whole or part of a section has been amended, the
date of the amending law appears in square brackets at
the end of the section. If a whole section, paragraph or
clause has been deleted, the date of the deletion appears
in square brackets beside the deleted section, paragraph
or clause.
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The Saeima1 has adopted
and
the President has proclaimed the following law:
Law on the Latgale Special
Economic Zone
Chapter I
General Provisions
Section 1. Purpose of the Law
The Latgale Special Economic Zone is established with the aim
to facilitate the development of the Latgale region by attracting
investment for the development of manufacturing and
infrastructure and creation of new jobs.
Section 2. Scope of Application of
this Law
(1) This Law prescribes the procedures for the establishment,
management and use of the Latgale Special Economic Zone.
(2) This Law shall not apply to the Rēzekne Special Economic
Zone and territories thereof which are determined in accordance
with the Law on the Rēzekne Special Economic Zone.
Section 3. Territory of the Latgale
Special Economic Zone Area
(1) The total area for which the status of the Latgale Special
Economic Zone may be granted shall not exceed five per cent of
the total area of local governments in the Latgale Planning
Region.
(2) The territory of every local government included in the
Latgale Planning Region area for which the status of the Special
Economic Zone may be granted shall be determined by the
Cabinet.
(3) Proposals regarding the territory of local governments in
the Latgale Planning Region area for which the status of the
Latgale Special Economic Zone may be granted shall be prepared by
the Ministry of Environmental Protection and Regional Development
and sent to the Cabinet for approval in accordance with the
procedures laid down in the laws and regulations on the basis of
the decision by the Latgale Planning Region Development
Council.
Section 4. Determination of
Territories of the Latgale Special Economic Zone and their
Borders
(1) After taking of the decision referred to in Section 3,
Paragraph two of this Law, the Latgale Special Economic Zone
Authority shall decide on the territory of every local government
to be included in the Latgale Special Economic Zone and the
borders thereof. The borders of the territory shall be approved
with a general administrative act which comes into force after
its announcement.
(2) The decision referred to in Paragraph one of this Section
shall be notified by publishing it on the website of the Latgale
Planning Region.
(3) The procedures and criteria for determining and updating
the borders of the territory of the Latgale Special Economic Zone
shall be laid down by the Cabinet.
Section 5. Investments, Estimated
Wage Costs and Commercial Activities within the Territory of the
Latgale Special Economic Zone or Outside of It
(1) Capital companies of the Latgale Special Economic Zone are
such capital companies which perform commercial activities within
the territory of the Latgale Special Economic Zone or outside of
it and have entered into a contract with the Latgale Special
Economic Zone Authority for an investment or settlement of
estimated wage costs in the sectors supported in the territory of
the Latgale Special Economic Zone. Capital companies of the
Latgale Special Economic Zone are entitled to qualify for the
direct tax reliefs regarding the investments made or estimated
wage costs in the sectors supported in the territory of the
Latgale Special Economic Zone and application of indirect taxes
in accordance with the procedures laid down in the laws and
regulations regarding the application of taxes in free ports and
special economic zones.
(11) Estimated wage costs are the costs of the
newly created workplaces in the Latgale Special Economic Zone
arising as a result of initial investments in accordance with the
provisions of Section 1, Paragraph two, Clause 4.1 of
the law On the Application of Taxes in Free Ports and Special
Economic Zones.
(2) Commercial activity within the Latgale Special Economic
Zone shall be performed by the capital companies and other
economic operators of the Latgale Special Economic Zone.
(3) The capital companies of the Latgale Special Economic Zone
shall provide control of the goods imported and produced in the
territory thereof and exported therefrom.
[14 May 2020]
Chapter II
Management of the Latgale Special Economic Zone
Section 6. Functions of the Latgale
Planning Region Development Council in the Management of the
Latgale Special Economic Zone
The Latgale Planning Region Development Council shall:
1) establish the Latgale Special Economic Zone Authority which
is an institution or unit of the Latgale Planning Region;
2) approve the by-laws of the Latgale Special Economic Zone
Authority and make amendments thereto. The by-laws are developed
taking into consideration the management functions laid down in
this Law;
3) assess the performance of the Latgale Special Economic Zone
Authority;
4) confirm the development plan of the Latgale Special
Economic Zone in accordance with this Law, the State and local
government interests, and also confirm the action plan and annual
budget of the Latgale Special Economic Zone Authority;
5) determine the criteria by which the territories that are to
be divided among local governments may be granted the status of
the Special Economic Zone.
Section 7. Functions of the Latgale
Special Economic Zone Authority
The Latgale Special Economic Zone Authority shall:
1) enter into contracts with capital companies of the Latgale
Special Economic Zone for an investment or settlement of
estimated wage costs in the sectors supported in the territory of
the Latgale Special Economic Zone:
a) if the capital company of the Latgale Special Economic Zone
performs commercial activities outside the territory of the
Latgale Special Economic Zone or performs activities in another
sector, the contract for the settlement of estimated wage costs
shall include additional conditions according to the specificity
of the commercial activity type which ensure that the investments
or estimated wage costs that are defined in the contract for the
settlement of estimated wage costs are made or settled and used
only within the sectors supported in the territory of the Latgale
Special Economic Zone;
b) contract for the settlement of the estimated wage costs
shall include a condition that for the period of operation of the
entered into contract the working place of the employee is the
territory of the Latgale Special Economic Zone and the employee
is declared in the territory of the Latgale Planning Region;
2) issue permit to the capital companies of the Latgale
Special Economic Zone to apply the direct tax reliefs provided
for in the law On the Application of Taxes in Free Ports and
Special Economic Zones within the territory of the Latgale
Special Economic Zone;
3) determine the free zones and borders thereof by
coordinating with the State Revenue Service their eligibility
regarding the introduction of the free zone regime;
4) enter into contracts on leasing of the immovable property
located in the territory of the Latgale Special Economic
Zone;
5) control fulfilment of the concluded contracts;
6) ensure the drawing up of the development plan of the
Latgale Special Economic Zone in accordance with this Law, the
State and local government interests, and also take part in
implementation of the abovementioned plan;
7) develop annual draft budget;
8) organise research and evaluation of the territories of the
Latgale Special Economic Zone, carry out market research
necessary for the attraction of investors and organise the
attraction thereof;
9) provide services for the capital companies and other
economic operators of the Latgale Special Economic Zone;
10) carry out activities related to the territories to be
included in the Latgale Special Economic Zone and the determining
of borders thereof provided for in Section 4 of this Law;
11) carry out other tasks to achieve the objective of this
Law.
[14 May 2020]
Section 8. Budget of the Latgale
Special Economic Zone
(1) Budget of the Latgale Special Economic Zone shall consist
of:
1) revenue resulting from the activity of the Latgale Special
Economic Zone and also from the provision of paid services;
2) contributions from the State and local government
budgets;
3) contributions from various foundations.
(2) Budget of the Latgale Special Economic Zone shall be used
for:
1) the management of the Latgale Special Economic Zone;
2) the development of infrastructure of the Latgale Special
Economic Zone.
Section 9. Support Foundation for
Commercial Activity of the Latgale Special Economic Zone
(1) The Latgale Planning Region Development Council may
establish a support foundation for commercial activity of the
Latgale Special Economic Zone.
(2) The aim of the support foundation for commercial activity
of the Latgale Special Economic Zone shall be to facilitate the
development of the Latgale Special Economic Zone.
(3) The holder and manager of the support foundation for
commercial activity of the Latgale Special Economic Zone shall be
the Latgale Special Economic Zone Authority.
(4) The budget of the support foundation for commercial
activity of the Latgale Special Economic Zone shall consist of
donations and gifts, purpose payments of natural and legal
persons and also other income.
(5) The operation of the support foundation for commercial
activity of the Latgale Special Economic Zone shall be determined
by the by-laws of the support foundation of the Latgale Special
Economic Zone.
Section 10. Permission to Apply
Direct Tax Reliefs
(1) The permit issued by the Latgale Special Economic Zone
Authority to apply direct tax reliefs for the investments made or
estimated wage costs settled in the Latgale Special Economic Zone
(hereinafter - the permit) shall attest that the capital company
has the right to receive the tax reliefs provided for in the laws
and regulations regarding the application of taxes in free ports
and special economic zones by complying with the conditions
regarding State aid laid down therein.
(2) The Latgale Economic Zone Authority shall submit a true
copy of the permit to the State Revenue Service and the
respective local government.
(3) The permit shall be cancelled only in accordance with the
procedures laid down in the laws and regulations on the
application of taxes in free ports and special economic zones or
if the Latgale Economic Zone Authority or other State institution
authorised by law shall bring a claim to the court for the
termination of contract with a capital company of the Latgale
Special Economic Zone and the cancellation of the permit issued
to the capital company.
[14 May 2020]
Section 11. Immovable Property in
the Latgale Special Economic Zone
(1) Immovable property owned by the State or a local
government that is located in the territory of the Latgale
Special Economic Zone shall be transferred to the Latgale Special
Economic Zone Authority for management, if necessary. The
immovable property owned by the State shall be transferred to the
Latgale Special Economic Zone Authority for management by a
ministry which has the respective immovable property in its
possession. The immovable property owned by a local government
shall be transferred to the Latgale Special Economic Zone
Authority for management by a decision of the respective local
government city council. The Latgale Special Economic Zone
Authority may, on behalf of the State and local governments,
lease the immovable property managed thereby to the capital
companies and other economic operators of the Latgale Special
Economic Zone without a special authorisation only on the basis
of this Law.
(2) The Latgale Special Economic Zone Authority may conclude a
contract on the lease of immovable property owned by a public
person for the period of time not exceeding 30 years. Other
immovable properties shall be leased in accordance with the
procedures laid down in the laws and regulations.
Section 12. Control of Aid for
Commercial Activity
For the management of the Latgale Special Economic Zone, the
laws and regulations governing the control of aid for commercial
activity shall be complied with.
Chapter III
Final Provisions
Section 13. Period of Time of
Operation of the Latgale Special Economic Zone
The Latgale Special Economic Zone shall exist until 31
December 2035.
Section 14. Liquidation or
Reorganisation of the Latgale Special Economic Zone Authority
After the expiration of the period of time of operation of the
Latgale Special Economic Zone, the Latgale Special Economic Zone
Authority shall be liquidated or reorganised in accordance with
the procedures laid down in the by-laws of the Latgale Special
Economic Zone Authority.
Section 15. Impact on the Capital
Companies of the Latgale Special Economic Zone after the Change
of Status of the Territories of the Latgale Special Economic
Zone
Changes in the status of the territories of the Latgale
Special Economic Zone have no effect on the right to receive the
direct tax reliefs for the investments made or the estimated wage
costs settled in accordance with the procedures laid down in the
laws and regulations regarding the application of taxes in free
ports and special economic zones for such capital company of the
Latgale Special Economic Zone which has entered into a contract
with the Latgale Special Economic Zone Authority for an
investment or the settlement of the estimated wage costs.
[14 May 2020]
This Law has been adopted by the Saeima on 19 May
2016.
President R. Vējonis
Riga, 6 June 2016
1 The Parliament of the Republic of
Latvia
Translation © 2020 Valsts valodas centrs (State
Language Centre)
