Tax rate on capital income

Capital income is liable to 20% tax

The following capital income is liable to 20% tax:

Dividends;
Deposit interest income and equivalent income as well as income related to interest income;
Income from investments into private pension funds;
Income from concluded cash-value life insurance contracts;
Income from individual management of financial instruments according to the investor’s authorisation (portfolio management service).

This tax applies to capital in relation to the following products offered by Citadele

Product	Person responsible for payment of taxes	Tax deduction
Interest income for the account balance:
Settlement, investment account	Citadele	Upon payment of interest
Interest income from deposits:
Maxi savings account, savings account	Citadele	Upon payment of interest
Term deposit	Citadele	Upon payment of interest
Overnight	Citadele	Upon payment of interest
Child’s majority savings account	Citadele	Upon payment of interest
Savings+	CBL life	Upon payment of interest
Coupon income from bonds:
Coupon income from the bonds issued by bank Citadele	Citadele	Upon payment of income
Income from contributions to private pension funds:
3rd pillar pension	CBL Open Pension Fund	Upon payment of private pension capital
Income from individual management of financial instruments according to the investor’s authorisation (portfolio management service)	Paying agent shall not withhold tax; income receiver is responsible for the payment thereof

Pursuant to the law, upon calculation of 20% tax for the capital income, no costs related to the gaining of such income shall be taken into account. The bank provides information to the client on the withheld tax in the account statement.

Within the meaning of the law, the day of obtaining and payment of income is the day, on which entitlement for unlimited action with the income pursuant to the concluded contract or law arises to an individual and on which the income is available thereto. Therefore, Citadele will withhold this tax at the moment of payment of the interest. For example, the bank will withhold the tax for the interest earned in Maxi savings account and paid on the last day of each month on the day of payment.

Capital gain tax rate (in Latvian)