Questions and answers

on the rebate of personal income tax and natural persons filling out income declaration who are building up savings through an insurance policy

• What discounts for savers are provided for in legislation?

The Law and Amendments to the Law "On Personal Income Tax" prescribe that natural persons who have entered into a life insurance savings agreement for at least 5 years, or who make deposits into private pension funds may receive an annual PIN rebate from the State in regard to the deposits which they have made during the course of the year that shall not exceed 20% of a person's income before tax during the relevant year (10% until the end of 2006).

The set 20% limit will in future also apply to those shares in investment funds which have been acquired, as well as your donations and presents.

• What do I have to do in order to receive Personal Iincome Tax from the State for the deposits I have made into my insurance savings?

You have to submit a completed annual income declaration to your SRS branch on the basis of which all deposits into insurance savings that do not exceed 20% (10% until 2006) of your total annual income will be deducted from that part of your income which is subject to taxation.

• Until what date is it possible to submit an income declaration in order to receive a PIN rebate for the previous year?

In order to receive a PIN rebate on the deposits you made during the previous year, you can voluntarily declare your income throughout the following year.

Remember that other provisions of the law prescribe that declarations regarding their income from the previous year must be compulsorily submitted by April 1 by those persons, who:

1. engage in commercial activity (by being the owner of an individual company, the owner of a farm or fish farm, persons who rent out their property, etc.);
2. have received income abroad;
3. have acquired non-taxable incomes that exceed 1 536 lats in total;
4. as well as in other cases if income has been received from which tax has not been withheld instead of a pay out.

Therefore, if you belong to this group of the population, don't forget to attach the information regarding the deposits you have made to your insurance saving in your compulsory declaration.

• Where can I fill out my income declaration and where do I have to submit it?

1. Declaration forms can be collected from all SRS branches or printed out from our home page (and can also be completed electronically);
2. A completed declaration and the documents attached to it must be submitted to your SRS branch or sent in by post in a recorded letter;
3. Annual income declaration may also be submitted by utilising the SRS electronic declaration system, that is, in electronic form by signing it with an electronic signature. Find out more about the submission of an electronic declaration by visiting the SRS home page: http://www.vid.gov.lv/default.aspx?tabid=11&id=518&hl=1

• Which documents do I need to attach to my completed declaration to justify my deposits in my insurance savings?

1. Documents which certify the payer's life insurance payments during the taxation year and deposits into private pension funds.
2. A note from the insurer concerning the paid-in bonuses is not necessary. Beginning with year 2008, electronic exchange of information has been ensured between SEB Life Insurance and the State Revenue Service concerning the bonuses paid in the life insurance policy.

• What do I have to write in my annual income declaration to justify my deposits in my insurance savings?

We have prepared a simple aid to help you fill out your declaration. We hope that it will prove useful to you!