Relief at source - Latvian investment funds - Latvia - CFCL (Vestima)

0% withholding tax is applied, by default, on income payments from Latvian investment funds. 

The above process is following Latvian tax legislation, which  currently does not clarify whether the tax rate must be applied based on the list of the final beneficial owners of the investment funds or on the nominee holder status and residency.

Clearstream Fund Centre is the nominee for Latvian Vestima Fund Securities, income may be paid gross, by default, based on its status and residency clients must disclose all beneficial owners that are not eligible for tax exemption in order to comply with the Latvian standard withholding tax rates. in order to comply with the Latvian standard withholding tax rates.

To ensure the accurate application of tax exemption at source, clients must ensure that all Vestima fund securities are held by final beneficial owners eligible for tax exemption according to the above list.

Per payment disclosure requirement for taxable beneficial owners

If the investment funds are held by taxable beneficial owners, clients must, before each impacted income event provide Clearstream Fund Centre with the following documentation:

• Breakdown of Taxable Holdings;
  And upon request
• Other supporting documentation

The identity of all beneficial owners may furthermore be requested by the Latvian Tax Authorities after the payment date. Consequently, Clearstream Fund Centre reserves the right to revert to clients for any additional information or corrective action upon request from the Latvian issuer or the local depository.

Clients should, by no means, hold Clearstream Fund Centre liable for any loss, cost, expense, liability or damage that the latter may incur due to any tax adjustment that needs to be made on their account, regardless of when this adjustment takes place. 

Deadline

The required disclosure must be provided, at the latest two business before respective payment date by 10:00 CET.