Latvia: New withholding tax rates

Effective

1 January 2014

the standard rates of withholding tax applicable on income paid on Latvian securities are as follows:

Government bonds:

• Non-resident legal entities - 0% (15% for entities resident in tax-haven countries);
• Latvian legal entities - 0% (interest is included in the taxable corporate income subject to a 15% corporate income tax);
• Non- resident individuals - 0% (15% for residents of tax-haven countries);
• Latvian individuals - 0%.

Corporate bonds:

• Non-resident legal entities - 0% (15% for entities resident in tax-haven countries; 5% where a payer is a Latvian registered bank and the recipient is entity resident of tax-haven country);
• Latvian legal entities - 0% (interest is included in the taxable corporate income subject to a 15% corporate income tax);
• Non-resident individuals - 10% (15% for residents of tax-haven countries);
• Latvian individuals - 10%.

Equities:

• Non-resident legal entities - 0% (15% for entities resident in tax-haven countries or 30% in cases of extraordinary dividends);
• Latvian legal entities - 0%;
• Non-resident individuals - 10% (15% for residents of tax-haven countries);
• Latvian individuals - 10%.

Impact on customers

Customers are reminded that, with Clearstream Banking¹ as the nominee for Latvian securities, income may, by default, be paid gross based on its status and residency. Despite such possibility, customers must ensure that all securities are held by final beneficial owners eligible for tax exemption according to the above list and, in order to comply with the Latvian standard withholding tax rates, should disclose all beneficial owners that are not eligible for tax exemption.

Details of the disclosure procedure are available in our Announcement A13129, dated 19 August 2013.

Further information

For further information, customers may contact the Clearstream Banking Tax Help Desk on:

or Clearstream Banking Customer Service or their Relationship Officer.

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1. Clearstream Banking refers to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).