Pursuant to the requirements of the Law On Personal Income Tax of the Republic of Latvia:
- the interest received on bank deposits is considered as capital income;
- capital income (interest received from capital) is taxable at a rate of 10%;
- tax is deducted from the interest received on deposits of all types — including both term deposits and demand deposits;
- the deduction of taxes from the interest received on deposits applies to private individuals — both residents of the Republic of Latvia (hereinafter referred to as the RoL) and non-residents who have placed their deposits in a credit institution registered in the RoL.
Rigensis Bank AS ensures the automatic deduction of tax and its transfer into the State budget of the RoL.
When interest income is paid on any type of deposit, the tax is deducted at the moment of income payment. For instance, when a term deposit expires, Rigensis Bank AS transfers both the principal amount of the deposit and interest income, from which an income tax of 10% is deducted, to the current account of the client. When receiving an account statement, Rigensis Bank AS clients will see both the total amount of the interest received and the amount of tax transferred into the State budget of the RoL.
More information is available on the website of the State Revenue Service of the RoL.
Pursuant to the requirements of the Law On Enterprise Income Tax of the RoL (as amended on 1 January 2014):
Income tax is deducted from payments which residents of Latvia or permanent representations of non-residents pay to legal, natural, or other persons which are located, established, or founded in tax-free or low-tax countries or territories referred to in Cabinet Regulation No. 276 of 26 June 2001:
- at a rate of 5% from interest payments, if they are made by a credit institution registered in the RoL.
When interest income is paid on any type of deposits, tax is deducted at the moment of income payment.
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