Relief at source - Latvian investment funds
0% withholding tax is applied, by default, on income payments from Latvian investment funds.
The above process is following Latvian tax legislation, which does currently 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 Banking being the nominee for Latvian investment funds, income may therefore be paid, by default, gross based on its status and residency. However, despite such possibility, customers must disclose all beneficial owners that are not eligible for tax exemption in order to comply with the Latvian standard withholding tax rates.
To ensure the accurate application of tax exemption at source, customers must ensure that all investment funds 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, customers must, before each impacted income event provide Clearstream Banking 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 Banking reserves the right to revert to customers for any additional information or corrective action upon request from the Latvian issuer or the local depository.
Customers shall hold Clearstream Banking harmless for any loss, cost, expense, liability or damage that Clearstream Banking could face in case of any tax adjustment Clearstream Banking would need to perform on their account, no matter when this adjustment would take place.
Deadline
The required disclosure must be provided, at the latest two business before respective payment date by 10:00 CET.