countries without double-tax treaty with Latvia
Outside the EU, Latvia has double-tax treaties with very few countries. This seems to impose a 20% penalty on investors from those non-treaty countries.
1) For the many countries with which Latvia does NOT have a double tax treaty, Mintos will deduct 20% of the profit generated by Notes?
2) Mintos will forward these 20% to the Latvian government?
3) Because there is no double-tax treaty, there will be no way for investors from non-treaty countries to claim these 20% back, either from Mintos or from the Latvian government? That's like a 20% penalty on risk-return calculations for any investor from a non-treaty country.
Unlike Latvia, other EU and EAA countries such as Germany and Switzerland have tax treaties with more than 100 other countries to prevent double taxation. It seems a serious competitive disadvantage for Latvian fintechs, unless Mintos does not want pesky investors from non-treaty countries.
I think you are correct. Taxing investors sounds like a bad move by Mintos. It would have been fine if they had set up a new entity for people that wanted to invest in a regulated environment. I wonder if Mintos has researched what % of investors can and will deduct the withheld taxes. It should be easy for Mintos to set up a separate entity so operations could continue as usual, but now I will just look for competitive fintech offerings. Also I think it's really bad that Mintos will close the secondary claims market.1
Hello HO, thank you for your feedback! We will look into it to cover these questions.
Please note, that our main customer base currently (98%+) are investors from EU/EEA, where Latvia has DTT treaties signed.0
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