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The Saeima (Parliament) has adopted and
The President has proclaimed the following law:
The law on public benefit
Article 1. The aim of the law
The aim of the law is to foster public -benefit activity among associations and
foundations, as well as religious orga nizations and their institutions.
Article 2. Public-benefit activity
(1) Public-benefit activity is such activity th at imparts significant benefit to society or
a part thereof, particularly if directed to wards protection of benefit, human rights and
the rights of the disabled; development of civil society; fostering of education,
science, culture and health and prev ention of disease; supporting sports;
environmental protection; providing assi stance in the event of catastrophe or
extraordinary situations; and improvement of the benefit of the public, particularly the
indigent and socially unprotected.
(2) The following shall not be cons idered public benefit activities:
1) action directed toward supporting a poli tical organization (party) or its election
campaign;
2) activity of such nature that it is direct ed towards satisfying the private interests and
needs of an association or foundation memb ers, or founders or persons affiliated
therewith, except for activity engaged in by an association or foundation founded and
functioning in order to protec t a group of socially unprotected or indigent persons, or
family rights or interests.
3) For the purposes of this law, indigent persons are such persons whos
e income and
material status do not exceed the level that , on the basis of the Law on public services
and public assistance, has been se t by the Cabinet of Ministers.
4) Groups of socially unprotected persons shall be determined by the Cabinet of
Ministers by analyzing the socio-economic status of the state and its influence upon
individual groups of persons.
Article 3. Public-benefit organizations
Public-benefit organizations are associations and foundations the charter or bylaws of
which state that the aim of the organization is public-benefit activity, as well as
religious organizations and thei r institutions (hereafter – religious organizations), that
are engaged in public-benefit activity, pr ovided these associations, foundations and
religious organizations have been granted the status of public-benefit organizations
and they utilize their income in observan ce of the limitations set forth in Articles 11
and 12 of this law.
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Article 4. Tax deductions with regard to the activities of public-benefit
organizations
(1) Public-benefit organizations shall have the right to receive tax deductions as set
forth by law, and they shall have other rights as set forth by law.
(2) Persons making donations to public-benefit organizations shall be entitled to
receive tax deductions, except for cases when they have recalled such do
nations.
Article 5 Granting of public-benefit status to organizations
(1) The Ministry of Finance shall grant publ ic-benefit-organization status on the basis
of an opinion of the Public Benefit Commission. Decision to grant public-benefit
status to an organization sh all indicate the respective organization’s types of public-
benefit activities.
(2) A list of public-benefit organizations shall be compiled by the Ministry of
Finance, indicating information on gran ting and revoking of organizations’ public-
benefit status.
Article 6 Public Benefit Commission
(1) The Public Benefit Commission (her eafter – Commission) is a collegial
consultative institution composed of a lik e number of authorized pubic officials as
well as representatives of foundations and associations.
(2) The Commission shall submit to the Mini stry of Finance an opinion concerning
compliance of associations, foundations and religious organizations’ activities with
the essence of a public-benefit organization’s activities, as well as utilization of its
property and financial means with the requirements of this law.
(3) The functioning of the Commission shall be ensured by the Ministry of Finance.
(4) The Commission’s bylaws and composition shall be approved by the Cabinet of
Ministers.
(5) The Cabinet of Minister s shall ensure a procedure by which representatives of
associations and foundations are nominated and included in the Commission.
Article 7 Procedure for granting of status of public-benefit organization
(1) Association, foundation or religious orga nization shall submit to the Ministry of
Finance an application for granting of public-benefit-organization status.
(2) Application shall include the following documents:
1) copy of registration certificate;
2) regarding foundations and associations – decision to found foundation or
association or, in the event of a testamentary founda tion, a copy of the testament;

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3) regarding religious organizations – information concerning officials of the religious
organization, i.e. the name, surname, identification number and position of each
member of the administrative bodies (management and revision commission);
4) copy of charter or bylaws;
5) copy of previous year’s annual review, if such review is to be prepared in
accordance with the requirements of the law;
6) statement from respective taxing author ing regarding satisfactory payment of tax
(by first day of month in month when application submitted);
7) With regard to religious organizations – a motivated letter of recommendation from
the Authority of Religious Matter s of the Ministry of Justice;
8) With regard to foundations and asso ciations – a copy of the foundation or
association’s annual review for the previ ous year and its anticipated program for
future development.
(3) The Cabinet of Ministers shall decide whether to approve associations and
foundations’ previous year’s annual revi ew and anticipated program for future
development.
(4) If the documents enumerated in Section 2 of this Article fail to provide a complete
reflection of the association, foundation or religious organization’s activities’
compliance with the essence of public-benef it activity, as well as of utilization of
property and financial means, the Ministry of Finance shall have the right to request
additional information and documents. Th e Ministry of Finance shall provide
justification for the necessity of additional information and documents, as well as
indicate a deadline for submission of such information and documents.
(5) The Ministry of Finance shall adopt a decision concerning granting of public-
benefit organization status in one month’ s time of submission of application. If
additional news and documents are requested, the Ministry of Finance shall adopt its
decision regarding granting of public-benefit-o rganization status in one month’s time
of submission of additional news and documents.
(6) Decision, which is effective upon the date when it is notified to addressee, shall be
published by the Ministry of Finance in five working days time in the newspaper
Latvijas Vestnesis .
Article 8 Refusal to grant pub lic-benefit-organization status
(1) The Ministry of Finance shall refuse to grant public-benefit-organization status on
the basis of the Commission’s opinion if:
1) association or foundation’s charter or bylaws’ indicated aim, or association,
foundation or religious organization’s activity fails to comply with the essence of
public-benefit activity;
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2) a regional institution of the State Revenue Service, prosecutor, or other institution
or court has found significant transgressions of the law in the activit ies of an
association, foundation or religious organization;
3) association, foundation or religi ous organization has a tax debt;
4) association, foundation or religious organization has failed to submit all of the
information and documents stated in Secti ons 2 and 4 of Article 7 of this law.
(2) Filers shall have the right to appeal decision to refuse to grant public-benefit-
organization status in court in accordance w ith the procedure set forth in the Law of
Administrative Procedure.
Article 9 Donation
(1) For the purposes of this law, a donati on is property or financial means that a
person (donor) without compensation, on the basis of mutual agreement, gives to a
public-benefit organization with the aim of fulfilling the aims of the public-benefit
organization’s charter or bylaws and to which tax deductions are applicable.
(2) Property of financial means given to a public-benefit organization shall not be
considered a donation in the amount that th e public-benefit organization incurs an
obligation toward the donor to engage in activities of a compensatory nature.
Article 10 Types of donations and utilization thereof
(1) A donation for a specific purpose that is specified as such may only be utilized for
the aims set forth in the respective agreem ent. Giving of property or financial means
without compensation for an aim that does not comply with the aims stated in the
charter or bylaws of the public-benefit organi zation, or which is not anticipated for the
recipient’s public-benef it activity, shall not be considered a donation.
(2) A donation, the utilization aims of which are not contractually established, shall be
a general donation and shall be utilized in accordance with the aims of the charter or
bylaws.
(3) A donation may not be utilized in order to cover losses arising from the public-
benefit organization’s business activity.
Article 11 Limitations on utilization of public-benefit organizations’ property
and financial means
(1) Public-benefit organizations shall have the responsibility to utilize their property
and financial means in accordance with the ai ms indicated in the charter or bylaws of
the respective organization.
(2) If the total amount of donations recei ved by a public-benefit organization in one
taxation period (calendar year) exceeds 12 mi nimal monthly wages, such organization
shall have the obligation to utilize no less than 75% of the total amount of donations
and income from business activity subject to tax deductions in the respective taxation

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period (calendar year) only for those public-benefit activities listed in the Ministry of
Finance’s decision to grant public-benefit- organization status to the respective
organization.
(3) The Cabinet of Ministers shall establish the types of expenses that in accordance
with this law shall be considered a public-benefit organization’s administrative
expenses, with the condition that thes e shall include public-benefit organization
expenses not directly related to fulfillment of the aims indicated in the charter or
bylaws. A public-benefit or ganization may not utilize mo re than 25% of general
donations for administrative expenses.
(4) Public-benefit organizations shall have the right to establish savings accounts in
financial institutions, provided that such savings are used in accordance with the
charter or bylaws, or agreement with the donor.
(5) Public-benefit organizations are not pe rmitted without compensation to engage in
business with property or financial mean s given or donated to them, as well as
activities related to political organizations (parties) or s upport of election campaigns.
(6) Public-benefit organizations are permitted without compensation to transfer or
donate property or financial means only on the basis of a written agreement. Such
agreement must include:
1) the aims of utilization of the property or financial means, with the provision that
such aims be related to those activities of the public-benefit organization stated in the
Ministry of Finance’s deci sion to grant the respective organization public-benefit-
organization status;
2) the person’s receiving the property or fi nancial means donated to the public-benefit
organization obligation to utilize the prope rty or financial means given to it in
accordance with the term s of the agreement;
3) the public-benefit organizati on’s obligation to ensure that the person to which the
property or financial means are being given fully utilizes them for the aims set forth in
the agreement, as well as the public-benef it organization’s right to recoup the given
property or financial means if the person fails to utilize the property or financial
means received from the public-benefit organi zation in accordance with the aims set
forth in the agreement.
Article 12 Limitations upon the activi ties of public-benefit organizations
(1) Public-benefit organizations are not permitted to divide their property and
financial means among its founders, board or other regulatory instit ution (if any), or
to utilize these in order directly or indirectly to gain benefit (guarantee, loan,
promissory note, or other material benefit).
(2) The provision in Section 1 of this Article applies also to spouses, relatives, in-laws
(with relation between relatives up to the second degree and between in-laws up to the
first degree) of a public-ben efit organization’s founders, boa rd or other regulatory
institution (if any).
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(3) If a person receives compensation for activity in a public-benefit organization,
such compensation must be proportionate and founded by tasks performed and the
public-benefit organization’s financial status.
Article 13 Supervision of public-b enefit organizations’ activity
(1) If a public-benefit organization amends the aims of its charter or bylaws, a copy of
the respective amendments must be submitted to the Ministry of Finance. The copy of
the respective amendments must be submitted to the Ministry of Finance no later than
14 days after it is registered in the Re gister of Associations and Foundations.
(2) Every year no later than by March 31, public-benefit organizations shall submit to
the Ministry of Finance a review of their previous year’s activities (in paper format
and electronically). Such review shall include:
1) annual review;
2) statement from respective taxing author ing regarding satisfactory payment of tax
(by first day of month in month when application submitted).
(3) An overview of public-benefit organizations ’ previous year’s activities shall be
published on the web page of the Ministry of Finance.
Article 14 Revocation of status of public-benefit organization
(1) The Ministry of Finance may adopt a decision to re voke a public-benefit
organization’s status if:
1) the public-benefit organizati on has failed to utilize its property or financial means
for the public-benefit activitie s listed in: the Ministry of Finance’s decision on
granting public-benefit-o rganization status to the re spective organization, the aims
listed in the organization’s charter or bylaw s, or if it has failed to observe the
limitations listed in Articles 11 and 12 of this law;
2) a regional institution of the State Revenue Service, a prosecutor, other institution or
court has found significant tran sgressions of law in the activities of the public-benefit
organization;
3) the public-benefit organization fails to make tax payments in the procedure set
forth by law;
4) the public-benefit organization has in its activities significantly transgressed the
provisions of this law;
5) the public-benefit organiza tion has amended the aims of its charter or bylaws and
has failed to submit these amendments to the Ministry of Finance by the deadline set
forth in Article 13 of this law;
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6) the public-benefit organization’s basic activity is not related to the aims indicated
in the charter or bylaws or does not comply with the essence of public-benefit
activity, or if this organizati on has provided untrue information.
(2) The Ministry of Finance, before it adopts a decision on revocation of a public-
benefit organization’s status, shall have the right to request the Commission’s opinion
regarding the public-ben efit organization’s transgressions of this Article’s Section 1.4,
1.5 and 1.6.
(3) A decision to revoke a public-benefit orga nization’s status may only be adopted if
the public-benefit organizati on, after having received written warning from the
Ministry of Finance, has failed to reme dy the transgression indicated therein.
Article 15 Repeated granting of public-benefit-organization status
An association, foundation or religious orga nization that has had its public-benefit-
organization status revoked may seek to have such status restored in accordance with
the procedure set forth in Ar ticles 7 and 8 of this Law, but no sooner than one year
from the day that the decision to revoke its public-benefit-organization status has
come into effect.
Article 16 Public-benefit-organization stat us in the event of reorganization of an
association or foundation
(1) In the event of reorgani zation of an association or foundation, an association or
foundation with public-benefit-or ganization status shall not automatically retain such
status, except in cases where the reorganiza tion of the association or foundation takes
place as part of a merger, and the association or foundation with which the merger is
taking place is a public-benefit organization at the time the reorganization becomes
effective.
(2) In the event an associa tion or foundation is divided, the divided association or
foundation shall retain its public -benefit-organization status.
Article 17 Division of property of a public-benefit organization undergoing
liquidation
(1) The undivided property of a public-ben efit organization undergoing liquidation
may be transferred to a p ublic-benefit organization r ecognized as such by the
commission, provided this organization’s functioning serves a similar aim.
(2) If a public-benefit organization’s prope rty cannot be transferred in accordance
with Section 1 of this Article, it shall revert to the state, whic h shall utilize such
property in accordance with the aims i ndicated in the public-benefit organization’s
charter, insofar as this is possible.
(3) Sections 1 and 2 of this Article shall be applicable also with regard to such
association, foundation or re ligious organization undergoing liquidation, which has
had its public-benefit-orga nization status revoked.

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Transitory provisions
1. Article 4 of this Law shall be effective January 1, 2005.
2. Until January 1, 2005 the Ministry of Finance may adopt the decisions referred to
in Article 7, Section 5 of this Law in two months’ time of submission of all
documents.
3. If a public organization or company that has been founded as a non-profit
organization and that is permitted to accep t donations for which the donors receive tax
deductions or receive some other tax benefits set forth by law is reregistered as an
association or foundation in the Register of Associations and Foundations, the
authorizations and tax benefits granted to th is public organization or company shall be
applied to the newly registered associ ation or foundation until December 31, 2004.
This Law shall be effective from October 1, 2004.
This Law has been adopted by the Saeima on June 17, 2004.

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