Changes in Tax Rates on Income From Deposits and Other Financial Instruments
28-Oct-2017, 12:27 / Products & Services Hereby we would like to draw your attention, that from 01.01.2018 the tax rates on income from capital and on capital gain will be altered. Such changes in tax rates will affect both natural persons, that are residents and non-residents of the Republic of Latvia, as well as the legal entities that are non-residents.
The tax rate on the income from capital for the natural persons, both residents and non-residents of the Republic of Latvia, will be 20% instead of the former 10%.
The tax rate on the income from capital for the legal entities, that are non-residents of the Republic of Latvia, and registered in low tax or no-tax states or territories*, will constitute 20% instead of the former 5%.
This tax is applicable when the interest on the deposits, subordinated loans as well as bonds, that were released by Latvian issuers, is being paid out to the clients**.
In turn, the tax rate on the capital gain for natural persons, that are residents of the Republic of Latvia, will constitute 20% instead of the former 15%. The tax is due from the capital gain income that arises when clients alienate the financial instruments and shares of the capital.
In order to receive more detailed information, we kindly advise to contact Your personal manager.
*The list of such countries is indicated in the Regulation of the Cabinet of Ministers No. 276 (available in Latvian). As of 01.01.2018 there will be available an updated version of the list of such countries.
**When such tax is levied on the dividends that are being paid out by the Latvian company, special conditions are applicable and there also exists the transitional period.
Please note, that information contained above is provided for informational purposes only, and shall not be considered to constitute a legal or tax advice. Shall you have questions in regard to the upcoming changes in the tax sphere, as well as the applicability of them to your particular situation, we recommend you to contact legal or tax advisor.
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