How to allow Debitum to not withhold TAX?
We are announcing the solution to upload the Tax Residence certificate and the Resident’s Certificate-Application for Tax Relieves.
In this blog article, we will explain the most important details and briefly tell you how to do it by yourself.
If no information about the tax appears at the moment on your Debitum profile, it means you are not a resident of the country which can allow Debitum not to withhold the tax.
To remind you why this is happening and why this is important:
At the end of February, Debitum was the first platform that launched financial instruments – asset-backed securities (ABS). This was done under the license issued by the Financial and Capital Market Commission of Latvia. As of this, we are a regulated platform and we are required to comply with governing regulations and withhold taxes of 20% on interest income earned by a private individual.
So far, it was the investor’s responsibility to report and pay taxes in their country from income on claim rights purchased on the platform.
How to remain to report and pay taxes by yourself?
Most countries* have concluded tax conventions that allow Debitum not to withhold personal income tax in Latvia at the moment of income payment.
To apply for the option not to withhold personal income tax from interest payments for 5 years, you will need to complete the Tax verification step in your profile
To complete the verification, you will need to do the following:
- Download Residence Certificate-Application for Tax Relieves form provided on the Debitum platform
- Fill in the marked fields in light blue (you need to fill only sections I-IV)
- Print and sign the form
- Upload scan or photo of the form on the Debitum platform
- Provide a Tax Residence certificate issued by a competent institution of your country containing at least your name, surname, personal code, taxation year and confirmation that you are a tax resident of this country according to tax conventions between our countries
Please be aware that tax deduction on the interest payments received for March and April will be first paid in early June in order for you to have enough time to provide all the necessary documentation.
Early June will be the moment when taxes will be withheld on all interest income for private investors who have not completed tax residence verification.
If you are a tax resident of the mentioned countries* AND you have provided the documents mentioned above, 20% tax on interest income will not be withheld and you will receive the full interest payment.
If you will not manage to upload the documents on time, don’t worry – we will provide information on how to receive the tax back from the State Revenue Service of Latvia.
Unfortunately, if your tax residence country is NOT in the list below, Debitum will have to withhold taxes from interest payments. In such cases we will send to your e-mail an approved yearly Certificate on income derived and income tax paid.
*For Debitum not to withhold tax, private individuals must be tax residents in one of the following countries: Albania, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bulgaria, Canada, Croatia, Cyprus, Denmark, Estonia, Finland, France, Georgia, Greece, Hong Kong, Hungary, Iceland, India, Ireland, Israel, Italy, Japan, Kazakhstan, Kosovo, Kuwait, Kyrgyzstan, Lithuania, Luxembourg, Macedonia, Malta, Mexico, Moldova, Montenegro, Morocco, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Tajikistan, the Czech Republic, Germany, China, Qatar, Switzerland, United Kingdom, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United States, Uzbekistan, Vietnam.