The applicable tax rate on interest income is 10 %.

The law provides that tax on income from deposit interest should be paid on the day of gaining income, namely at the moment of disbursement of interest, starting from 1 January 2010. This means that you are, for example, a depositor of a simple deposit who has chosen a monthly interest disbursement. SEB banka will then automatically deduct the tax once in a month at the moment of disbursement of the interest on deposit. The same also refers to the owners of the special deposit who have disbursement of interest every month by adding them to the principal amount of the deposit. The tax will be automatically deducted for you once in a month. The tax of the owners of short-term deposits will be deducted by the bank at the end of the deposit period when interest is disbursed according to the contractual terms and conditions. Currently, SEB banka has already started encashment of the mentioned tax, which means that you as a depositor do not need to carry out any additional activities.

The applicable tax rate on interest income is 10 %.

The law provides that tax on income from deposit interest should be paid on the day of gaining the income, namely at the moment of disbursement of interest, starting from 1 January 2010. This means that SEB banka will automatically deduct the tax at the moment of disbursement of interest, which according to the contract takes place once in a quarter.

The applicable tax rate is 10 %.

All dividends are divided into two parts:

• dividends paid by Latvian and foreign public stock companies;
• other dividends.

Tax encashment from dividends paid by Latvian public stock companies will be automatically completed by SEB banka at the moment of disbursement of these dividends by transferring the amount of dividends without tax into the shareholder's bank account; you will not need to carry out additional activities. In respect to the dividends paid by foreign public stock companies, SEB banka will attempt before disbursement of taxes to evaluate whether tax has not already been paid on these dividends abroad and, in the event Latvia has signed a double taxation agreement with this country on non-application of double taxation, the tax in the amount of 10 % will not be cashed on the dividends paid. In other cases SEB banka will make automatic tax deduction.

The tax encashment from other dividends will be the liability not of the bank, but the liability of the specific company which is paying out these dividends.

In respect to the accruals in life insurance contracts, amendments to the law stipulate several changes:

• Tax relief limit for contributions into the pension fund and/or endowment life insurance instead of the former 20 %, further will be separated 10 % for contributions in the pension fund and 10% - for endowment life insurance starting from 1 January 2010. But for both mentioned investment types and for donations to social gain companies together not more than 20% of your annual gross income.
• The personal income tax (PIT) will also change, which will now be 26 % instead of the former 23 %. This means that you will get a repayment of PIT tax in the amount of 26 % for contributions made for the endowment insurance contracts starting 1 January, 2010, and not exceeding 10 % of your annual gross income.
• At the moment of disbursement of the endowment life insurance accrual – at the end of the insurance period or in the case of pre-term termination of the contract – the positive difference between the disbursed accrual and the paid insurance premiums will be subject to tax on income from capital whose rate is 10 %. Tax withholding at the moment of disbursement of the accrual will be done by SEB life insurance; you will not need to carry out additional activities.

The applicable tax rate is 15 %.

The growth of capital from the mentioned securities should be calculated as a difference between the purchase and sales price. The securities purchase price can also include expenses for the purchase and holding of securities. If you have not gained any profit as a result of the transaction, then you will not have to pay a tax on the growth of capital. Amendments to the law also stipulate a possibility that, in the event one capital asset will have suffered losses, but the other has worked at a profit, then losses may be covered by the profit gained, but it will be possible within one taxation year. Amendments to the law stipulate an exception that the tax is not withheld on municipal promissory notes of Latvian and EU Member States or EEC zone countries.

Payment of taxes on income from the growth of capital is the liability of the depositor. Any person who gains income from the growth of capital once in a quarter (if the gained profit is below LVL 500) or once a month (if the gained profit is above LVL 500) should declare the gained income to SRS and afterwards the respectively calculated tax paid by himself within 15 days from submission of the declaration into the national budget.

Additional information about the procedure of personal income tax calculation on income from the growth of capital is available in the State Revenue Service offices!