As a financial platform, Mintos is required to deduct withholding tax from private individuals’ interest income from investments in financial instruments (such as Notes). In some cases, you may be able to claim a withholding tax refund from the Latvian State Revenue Service (VID). This allows you to potentially recover a portion of the tax deducted from your profit.
Determining refund eligibility
To be eligible for a withholding tax refund, you must meet the following conditions:
- The income for which withholding tax was deducted must have been earned in the last 3 years
- Your tax residence country needs to have a double tax treaty with Latvia (see list of countries with which Latvia has a double tax treaty)
- The withholding tax rate applied to all or some of your income must be higher than the withholding tax rate set by the double tax treaty
To see if you can receive a refund for a particular year, go to the Interest section of your tax report from the year 2022 or newer and check the rates indicated in the Withholding tax rate column. If any of these rates is higher than the rate set in the double tax treaty (see list of countries with which Latvia has a double tax treaty), you’re eligible for a withholding tax refund. The refund is equal to the difference between tax withheld at a higher rate and the rate set in the double tax treaty.
Example: Investor 1
Investor 1 is a tax resident of Germany, which has a double tax treaty rate of 10% with Latvia. In 2022, they earned €2 500.00 in interest from investments in Notes, where €500.00 was taxed at 5% and €2 000.00 was taxed at 20%. Since the 20% tax rate is higher than the double tax treaty rate of 10%, Investor 1 is eligible for a withholding tax refund for the year 2022 in the amount of (0.20 − 0.10) * 2 000.00 = €100.00. Given that the 5% tax rate is lower than the double tax treaty rate of 10%, this amount is not subject to refund.
Example: Investor 2
Investor 2 is a tax resident of Poland, which has a double tax treaty rate of 10% with Latvia. In 2022, they earned €375.00 in interest from investments in Notes, where €60.00 was taxed at 5%, €300.00 was taxed at 10%, and €15.00 was taxed at 20%. Since the 20% tax rate is higher than the double tax treaty rate of 10%, Investor 2 is eligible for a withholding tax refund for the year 2022 in the amount of (0.20 − 0.10) * 15.00 = €1.50. Given that neither the 5% tax rate nor the 10% tax rate are higher than the double tax treaty rate of 10%, these amounts are not subject to refund.
Example: Investor 3
Investor 3 is a tax resident of Bahrain. Since Latvia does not have a double tax treaty with Bahrain, Investor 3 is not eligible for a withholding tax refund.
Filling out the application
To claim your refund, you need to submit a tax refund application (available in English and Latvian) to the Latvian State Revenue Service (Valsts ieņēmumu dienests – VID). The application needs to be filled separately for each Note issuer for which you were deducted tax eligible for a refund. You will need your personal information and data from your tax report to complete the application. You will also need to involve your local tax office to confirm the details of your application. Before you submit your application, please carefully assess whether the refund amount can offset any associated costs as well as the time required to complete the application.
Write your tax residence country in the box above the title of the document as well as in the box below the title of the document.
I. Recipient of Payment
Fill out your first and last name, your tax identification number, your residence address, your bank details (IBAN and BIC/SWIFT code), and your contact details (at least your email address).
II. Payer of Income
Fill out the details of the selected Note issuer as indicated in the list of Note issuers. Note that for every Note issuer a separate application needs to be filled out. Check Annex No. 3 of your tax report to see the issuers for your investments made in the given year.
To fill out this section, you will need to use information from Annex No. 3 of your tax report (see example below).
For each row where the rate indicated in the Withholding tax rate column is higher than the double tax treaty rate, fill out the following information about your income from the selected Note issuer:
- Date of payment
Copy the date indicated at the top of the chart, usually 01.01.2022–31.12.2022.
- Type of income
Write Interest income.
- Amount of tax and rate of tax paid in the Republic of Latvia
Copy the amounts from columns Withholding tax and Withholding tax rate.
- Amount of tax and rate under the Tax Agreement
Write the withholding tax calculated by multiplying the tax rate stated in the double tax treaty by the amount in the Amount column, rounded to two decimals, and the tax rate stated in the double tax treaty.
Example: 73.41 * 0.1 = 7.341 ≈ €7.34
- Amount of tax to be refunded
Subtract the amount in the Amount of tax and rate under the Tax Agreement column from the Amount of tax and rate of tax paid in the Republic of Latvia column and sum up all rows under Total.
Example: 14.68 − 7.34 = €7.34
Note: In cases where amounts were withheld in a non-EUR currency, please contact us for assistance. We will be happy to provide you with the correct amounts converted to EUR.
IV. Statement of Recipient
Write your tax residence country. If you plan to sign the document with a physical signature, write the place and date of signature, your full name and sign the document. If you’re using an electronic signature, leave these fields blank.
V. Statement of the Competent Authority of the other Contracting State
This section needs to be filled by the tax office in your tax residence country. Your tax office needs to fill in your tax residence country. If your tax office plans to sign the document with a physical signature, it needs to write the place and date of signature, the position and full name of the signee and sign and stamp the document. If your tax office is using an electronic signature, these fields can be left blank.
Alternatively, if your tax office cannot sign this document, it can provide a certificate that meets the following requirements:
- It must contain your full name and tax identification number
- It must confirm your tax residence for the given year
- It should specify that it applies to income generated in Latvia
- It must be written in English or translated to Latvian
Signing and submitting the document
If you’re a tax resident of an EU member state, the Latvian State Revenue Service will accept physical signatures and stamps in most cases. Tax residents of non-EU member states need to provide a signed document that has been notarized and bears an apostille. The filled out application(s) must be mailed to the following address:
Valsts Ienemumu Dienests
Talejas iela 1
If you plan to submit the application electronically:
- Fill out all relevant information up to Section IV and sign the document with an e-signature.
- Have your tax authority fill out Section V and sign the document with an e-signature or provide an electronically signed equivalent document as described above.
- Sign both parts of the document again with an e-signature.
- Make sure that all e-signatures are in the eDoc or ASiC-E format and can be validated on eParaksts.lv. More information
- Send all documents via email to email@example.com with the subject Withholding tax refund.
Receiving the refund
The Latvian State Revenue Service has 30 days to review your request. In case additional information is required to proceed, you will be contacted using the contact details provided in the application. Once your application is approved, your tax refund will be sent to your bank account.