Have you been trying to figure out how taxes are applied to investing? You’re not alone – we will allay your concerns by explaining and describing the taxation process below.
VIAINVEST is legally required to deduct the withholding tax from private investors’ interest income earned from investing in asset-backed securities.
The current standard withholding tax rate is 20% of the interest income earned; however, this rate can be reduced to 0% if any tax treaties are concluded between countries. Read below to learn how to benefit from the reduced rates.
Please note that withholding tax is applied only to the interest portion of the revenue, while principal repayments are not taxed.
How to reduce your withholding tax
When investing in asset-backed securities on the VIAINVEST platform, we offer a way to benefit from the reduced withholding tax rates due to tax treaties concluded between Latvia and the country of your tax residency. To reduce the withholding tax rate, we welcome all investors to submit the certificate of residency issued by the country of your tax residency. The document can be uploaded by visiting your profile and heading to the Settings -> Documents Upload page.
Once the document is approved, the reduced tax rate will automatically apply to any further interest income received to your VIAINVEST account.
For most EU countries, the reduced tax rate is 10%, while it can be reduced to 0% for some. The full list of the reduced tax rates that VIAINVEST applies to private individuals is available below:
|Austria, Belgium, Croatia, Czech Republic, Republic of Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, The United Kingdom, Iceland, Norway, Switzerland, USA, Hong Kong, Republic of India, Japan, Canada, Republic of Korea, United Mexican States, Republic of Singapore||10%|
|Liechtenstein, Brazil, Australia, South African Republic||20%|
For your convenience, you can also use the comprehensive tool provided by Deloitte to view the current tax treaty statuses and rates.
View your taxes
The annual tax statement for income from investing in both loans and asset-backed securities is always available for download in your VIAINVEST account. This statement can be provided to your tax accountant or submitted to your tax authority as proof of the withheld tax and to claim any tax credits that may be available in your home country.