Overview of the main activities of the Chamber of Commerce in the second quarter
In the second quarter of 2023, the Chamber of Commerce expressed opinion in writing on 46 drafts or other policy-making documents. The most important issues were related to the coming of the new government, i.e. the coalition agreement and the package of tax changes contained therein. In addition to written requests, there were also weekly contacts with different authorities and the government. In order to ensure the stability and sustainability of the business environment, we fought overregulation and administrative burden and made simple reviews for companies of the legislation coming into force.
We also achieved several work victories, for example in connection with the new Public Water Supply and Sewerage Act and the amendments to the Packaging Act that entered into force on 1 May. Thanks to the proposal of the Chamber, the conditions for the provision of a support measure to ensure the security of electricity supply were also relaxed for enterprises. We also proposed to increase the limits of audit and inspection and opposed the creation of unnecessary competition supervision procedures.
In June, new board elections were held and 5 new members were added. It is also a pleasure to announce that more than 3,500 member companies are contributing to the development of the business environment through the membership of the Chamber.
Topics of the second quarter:
We sent proposals to the new government regarding tax policy
At the end of April, we turned to the Government of the Republic and presented our comments and proposals regarding the implementation of the coalition agreement between 2023 and 2027. Among other things, together with the central federation of employers, we sent an appeal to the Prime Minister that good laws are not made through a turbo procedure and that ultra-short deadlines for providing feedback to large-scale and society-affecting bills violate the principles of good legislative drafting.
We objected to raising the VAT rate on accommodation services to 22 percent
We objected to increasing the VAT rate in the accommodation sector from the current 9% to 22%. We also did not think it was right for the amendment to be processed as a matter of urgency and without any substantive discussion. In June, the Riigikogu decided to increase the value added tax rate on accommodation to 13 percent from 2025. Check the position of the Chamber.
We proposed to waive the changes related to the advance payments of credit institutions
The original version of the draft act provided that from 2025, the rate of 22 per cent would apply to the advance payments of credit institutions instead of the current 14 per cent. The Chamber objected to this change, as it would reduce the availability of loan capital for all companies. The Riigikogu decided in June to increase the tax rate on advance payments to 18 percent. Check the position of the Chamber.
We opposed increasing the income tax on regular dividends from 14% to 22%
The package of amendments to tax laws also included the proposal to increase the income tax on regular dividends from 14% to 22%. The Chamber objected to this change, as it reduces investment security and the confidence of companies in a stable tax environment. The Chamber's proposal was not taken into account and the distinction between regular dividends will disappear from 2025. Check the position of the Chamber.
We have proposed raising the limits for audit and inspection
At the end of May, we approached the Ministry of Finance with a proposal to raise the audit and inspection thresholds provided for in the Auditing Activities Act, which have remained unchanged since 2016. Raising the thresholds would help to reduce the costs and workload of accounting entities. In June, we received a reply from the Ministry that the proposal definitely deserves attention and the Ministry of Finance plans to analyse the need to change the audit and inspection thresholds more thoroughly. Read about the Chamber's proposal.
We oppose the creation of an unnecessary competition supervision procedure
The Chamber opposes the Ministry of Justice's plan to establish a new type of procedure for the processing of competition violations, i.e. competition supervision proceedings, in the course of which the Competition Authority would have extensive rights to punish companies for competition violations in the framework of administrative proceedings. Read about the views.
Process of termination of employment contract due to decrease of work ability of employee does not need to be changed
The Ministry of Social Affairs has prepared a draft amending the Employment Contracts Act in connection with the cancellation of an employment contract due to a decrease in the work ability of an employee. According to the Bill, an employer can cancel the contract in the future if the employee has not been able to perform his or her duties for six months due to health and has complied with the term for advance notice. The Chamber opposes these changes. Read about the address.
We support an amendment that allows a long-term sick worker to work partially during the sick leave
The Ministry of Social Affairs came up with the Bill on Amendments to the Health Insurance Act, pursuant to which the employee is allowed to agree with the employer in the future that the employee may also work at least part-time during the sick leave if he or she has been on the sick leave for two months. The Chamber supports this amendment, but in order to increase the freedom of agreement between the employee and the employer, we proposed that the employee may, by agreement of the parties, commence work earlier during the period of the sick leave, i.e. as of the 30th day of sick leave. Read the position.
The Occupational Whistleblower Protection Act must also ensure protection against malicious reporting
At the end of May, the Ministry of Justice came out with an updated version of the Occupational Whistleblower Protection Act. The Chamber supports the purpose of the act and considers it positive that several previous proposals of the Chamber have entered the act. At the same time, we submitted a number of additional comments on the act to the Ministry. For example, as one of the possible negative effects, we pointed out that people can start making malicious, unjustified and abusive reports and this can cause very serious damage to businesses. We therefore consider it extremely important that the necessary measures are in place to mitigate such a risk. Read about the views.
Green Claims Directive is necessary to reduce greenwashing, but still needs a number of improvements
The European Commission has created a proposal for a Green Claims Directive, which obliges companies to submit justified and verified environmental claims and labels on products and services. Green claims include, for example, 'packages made of 30% recycled plastic', 'carbon-neutral transport' and 'bee-friendly juice'. The Chamber supports the aim of the Directive, but stressed in its opinion that the solution to be created must be simple, must not lead to unreasonable costs and administrative burdens for companies, and the requirements contained in the Directive must also be subject to effective and effective control by the supervisory authorities. Read about the opinion.
In facilitating the introduction of e-invoices by means of the law, increased expenses for small companies should be considered
The Ministry of Finance has prepared an intention to develop a draft act on Amendments to the Accounting Act, according to which the accounting entity will have the opportunity to demand that the seller submit an e-invoice for payment. In the opinion of the Chamber, the planned change is an overregulation, which will lead to a greater burden on small enterprises and an increase in costs. Read the opinion.
Achieving climate neutrality must take place at a reasonable pace
In May, the European Commission launched a public consultation to seek the views of stakeholders on the climate objectives planned in the European Union for 2040. The Chamber of Commerce pointed out in its reply that the target of reducing greenhouse gases by 2040 should be between 65 and 75 per cent compared to the 1990 levels. Read about the opinion.
Shelters and organisation of shelters need clearer rules
The draft act on Amendments to the Emergency Act and the Building Code has been prepared in the Ministry of the Interior, which establishes the requirements for shelters and the organisation of shelters. The Chamber informed the Ministry in its reply that the establishment of shelters and the organisation of shelters require regulation, but since there are several unclear places in the draft, we oppose the expeditious processing of the draft. For example, the draft act does not clearly state whether and for which buildings the obligation to establish a public or non-public shelter is imposed. Read about the address.
We support the European Commission's proposal to reduce the burden on businesses operating across borders
The European Commission has come out with a proposal for a directive on the digitalisation of company law, which aims to eliminate and reduce the formalities for companies when using business data in cross-border situations. For example, the creation of an EU company certificate in the proposal, the introduction of an EU digital proxy and the easing of legalisation and translation requirements will help to reduce the burden on businesses. The Chamber supports these changes. Read about the opinion.
In our opinion, the state must also offer support measures to the providers of vital services
The Government Office prepared a 132-page Bill on Civil Crisis and National Defence Act, which, among other things, supplements the list of vital services and changes the criteria for providers of vital services. The Chamber submitted seven proposals for the draft act and found that the state support measures have been disregarded in addition to the obligations of vital service providers. Read about the opinion.
Organisation of value-based public procurement is a step in the right direction
The Chamber supports the plan of the Ministry of Finance to adopt the strategic principles of public procurement, according to which public procurement must become greener, more socially responsible and more supportive of innovation. Read about the views.
The planned obligation to repair goods should be clearer and more concretely formulated
The Chamber generally supports the European Commission's proposal for a regulation on the repair of goods, according to which producers of certain goods must be obliged to repair goods if the consumer so wishes. We consider it positive that, according to the Commission's proposal, repairers are not obliged to repair goods free of charge, but we believe that it would be clearer from the proposal in which situations the repair of goods must be considered impossible. Read about the opinion.
Based on a proposal of the Chamber, the conditions of the support measure promoting the security of electricity supply were relaxed for enterprises
On 4 June, a support measure came into force to support the state in ensuring the security of electricity supply for those companies that have been most affected by high energy prices. The support measure allows such companies to apply for up to EUR 500,000 of support for the installation of equipment for the production of renewable energy, depending on the size of the company. In the initial version of the draft act, the conditions for obtaining support were significantly stricter than at present. For example, the applicant company had to be directly involved in the Ukrainian, Russian or Belarusian markets, but the conditions for granting support were relaxed on the proposal of the Chamber. Read about the support measure.
We consider that the planned support of the R&D workforce is not sufficiently motivating for companies
The Ministry of Economic Affairs and Communications prepared a draft support measure for research and development workers, according to which the undertaking is able to apply for support in the amount of up to 5% of the income tax calculated on the wages of the research and development workers. According to the draft act, it is possible to apply for an application on a round-by-round basis and generally twice a year. In the opinion of the Chamber, the amount of support is too small and this does not motivate companies to employ research and development employees. Read about the opinion.
We reviewed the legislation coming into force soon
The lawyers of the Chamber are constantly analysing the legislation that will enter into force soon and are reviewing the most important changes for companies. In the second quarter of this year, the lawyers of the Chamber prepared an overview of, for example, the amendments to the Packaging Act and Waste Act which entered into force on 1 May. The changes concerned restrictions on the placing on the market of single-use plastic products, labelling, reduced consumption, extended producer responsibility obligations, increased consumer awareness, product design requirements and separate collection. Read an overview of the changes in the law.
In addition, the lawyers of the Chamber prepared an overview of the new Public Water Supply and Sewerage Act which entered into force on 1 July, the new system of compensation for sick days and the changes related to the period of payment of unemployment insurance benefit.