The Saeima (Parliament) in its September 20, 2009 meeting adopted the amendments to the Law on Corporate Income Tax in their first reading. It is planned that the changes in the law would help to attract funding for public benefit organizations and strengthen the civil society in Latvia.

Amendments refer to donations for budget institutions or associations, foundations, religious organizations incorporated in Latvia and granted the status of public benefit organizations. Corporate income tax for donors would be reduced by the sum equal to 85 per cent of the amount of donation amount. Nevertheless, the total corporate income tax rebate for donors would not exceed 20 per cent of the total tax to be paid. Moreover, these amendments also state number of restrictions for receipt of tax rebate.  

Corporate income tax rebate for donors is not an innovation in Latvia. Similar provision regarding tax rebate was included in the law up to June 16, 2009, when a legislator, in its efforts to optimize tax revenue, excluded this provision from the law.

These amendments are being reviewed under urgency procedure and, in order to take effect, they should still be adopted by the Saeima in their second reading.