Personal Income Tax
Pursuant to the Republic of Latvia law “On Personal Income Tax”, individuals (Latvian and foreign customers) shall be subject to tax on income from capital and capital gains tax as described below1.
For Latvian customers
| Type of income | Tax rate | Tax payment procedure |
| Interest income from deposits: balances of deposit and all other types of accounts (including savings accounts) with ABLV Bank, AS | 10% of the interest income amount | ABLV Bank, AS, withholds tax when paying out interest income |
| Interest income (coupon) from debt securities, except for government and municipal debt securities issued by issuers registered in the Republic of Latvia, the European Union or the European Economic Area | 10% of the interest income amount | ABLV Bank, AS, withholds tax on interest income (coupon) from bonds issued by ABLV Bank, AS, only. Otherwise, the tax shall be assessed and withheld by the issuer2 |
| Dividend income from shares of capital and stocks issued by an issuer registered in the Republic of Latvia or abroad | 10% of the dividend income amount |
ABLV Bank, AS, withholds tax on dividend income from shares of capital and stocks in public float only. Tax on dividends received from shares of capital and stocks that are not in public float, as well as on dividends from shares of capital and stocks held not in accounts with credit institutions of the Republic of Latvia, shall be assessed and paid by the taxpayer |
| Income from alienation of financial instruments, except for income derived from alienation of government and municipal debt securities issued by an issuer registered in the European Union or the European Economic Area | 15% of the income |
Tax on income derived from alienation of financial instruments shall be assessed and paid by the taxpayer |
| Income from transactions in unallocated precious metals | 15% of the income | Tax on income derived from transactions in unallocated precious metals shall be assessed and paid by the taxpayer |
Procedures for declaring tax on income from capital and capital gains tax
Cabinet Regulation No. 990 "Procedure of Completing Declaration of Personal Income from Capital, and Declaration Sample Form" stipulates the declaration form and procedures for completing it. Pursuant to the Law on Personal Income Tax and the Regulation, the taxpayer that has received capital gains income should submit a declaration to the State Revenue Service before:
- 15th day of the month following that in which income was gained — if income derived from alienation of capital units exceeds LVL 500.00 within a month;
- once a quarter, before 15th day of the month following the end of the quarter — for income gained during the quarter, if capital gains and total income from transactions in capital units are from LVL 100.01 to LVL 500.00 within a month;
- not later than on 15 January of the year following the year of taxation — for income derived during a year, if capital gains and total income from transactions in capital units are less than LVL 100.00 within a month.
The assessed tax amount shall be paid to the budget within 15 days after submitting the declaration at the latest.
Capital gains during a year (respective period) of taxation are summed in case there were several capital units alienated during the period. If calculated capital gains for the period are negative, no tax is due. Calculating capital gains for a year (respective period) of taxation, if capital gains from alienating some capital unit are negative, and capital gains from alienating some other capital unit are positive, the losses incurred during the year (respective period) of taxation may be set off by positive capital gains. Whereas in case capital gains calculated for the year of taxation are negative, the incurred losses may not be set off by capital gains of the following taxation years or by other types of income received during the year of taxation.
For foreign customers
| Type of income | Tax rate | Tax payment procedure |
| Interest income from deposits: balances of deposit and all other types of accounts (including savings accounts) with ABLV Bank, AS | 10% of the interest income amount | ABLV Bank, AS, withholds tax when paying out interest income |
| Interest income (coupon) from debt securities, except for government and municipal debt securities issued by issuers registered in the Republic of Latvia, the European Union or the European Economic Area | 10% of the interest income amount | ABLV Bank, AS, withholds tax on interest income (coupon) from bonds issued by ABLV Bank, AS, only. Otherwise, the tax shall be assessed and withheld by the issuer |
| Dividend income from shares of capital and stocks issued by an issuer registered in the Republic of Latvia or abroad | 10% of the dividend income amount | ABLV Bank, AS, withholds tax on dividend income from shares of capital and stocks in public float only. Tax on dividends received from shares of capital and stocks that are not in public float, as well as on dividends from shares of capital and stocks held not in accounts with credit institutions of the Republic of Latvia, shall be assessed and paid by the taxpayer |
Procedures for declaring tax on income from capital and capital gains tax
According to the Law on Personal Income Tax, foreign taxpayers that derive capital gains in Latvia, should assess the respective tax and submit a declaration to the State Revenue Service before:
- 15th day of the month following that in which income was gained.
1 This data is provided for information only and shall not be treated as
tax advice or consultation. This data does not provide full information on
application of law “On Personal Income Tax” and other normative acts. Please
see complete
official text of the law and follow amendments to the same.
2 Please note that a foreign issuer cannot withhold tax on capital abroad, and in this case the taxpayer itself shall be responsible for transferring the tax amount to the state budget.