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Tax benefits

Tax benefits

You can get your personal income tax refund in the amount of 23 %

  • For contributions into savings with life insurance
  • For contributions to the 3rd Pension Pillar

What tax benefits can be received?

By making contributions into savings with life insurance and signing the contract for a period of at least 5 years, each year you can exercise your personal income tax incentives in the amount of 23 % of your contributions. You can pay larger or smaller amounts into the savings, but you will get receive tax incentives on the amount not exceeding 10 % of your annual gross income.

It is possible to use the same tax benefits also by making contributions to the 3rd Pension Pillar. This means that in the case both types of savings, you can get your personal income tax incentives for contributions in the accumulating the life insurance and additional for the contributions in the private pension savings.

Even if the saved amount may seem modest in the short term, over a longer period of time it will have accumulated significant amount of money. Calculate the maximum income tax refund in the Tax calculator.

Important! To get tax benefits, you must be a person who pays personal income tax in the amount of 23 %.

How to receive the tax incentives?

You can receive the personal income tax incentives in the most convenient way for you:

  • Submit your annual income report to the State Revenue Service (SRS) according to your place of residence or electronically, using the electronic declaration system (EDS). This system automatically reflects the information available by SRS on your income, as well as contributions made to pension funds or life insurance by making savings. Thus, those who wish to recover the overpaid income tax will just have to give answers to some simple questions. As a result, you will receive a partly completed template of the report, which makes it easier and faster to process. The declaration is submitted using your online banking code card or code calculator.

    Important! You do not need any notice from the SEB pension fund or SEB dzīvības apdrošināšana, because all the information about your contributions in pension funds and form making savings with life insurance for the previous calendar year are sent electronically to the SRS until February 1 of the next year.

  • Agree with the accounting department of your workplace to transfer the selected amount to the pension fund or life insurance company with which the contract was concluded, together with the payment of your salary. In this case, the personal income tax allowances shall be calculated by the accountancy of your work place and you won't have to go to the SRS.

Can I get tax incentives if the savings are built by my employer in my favour?

The savings made up by the employer in the favour of the employee do not have to be declared. And you will not receive any income tax incentives for them. However, they must be taken into account in determining the amount of the contributions that can be applied for the tax incentives.

If your employer creates savings for you, it is gainful for you to increase the capital by individual contributions. And you can receive the personal income tax incentives for them:

  1. find out what percent of your annual gross salary is paid by the employer to the 3rd Pension Pillar and/or life insurance savings.
  2. calculate how much you can contribute, in order to take full advantage of the tax incentives: the limit of income tax incentives together with the employer's contributions is 10 % of your gross salary. For example, if your employer pays 5 % of your gross income for you, you can pay an additional 5 % and get back the personal income tax refund on your part.

The individual contributions in the savings can be done by a simple transfer, regular payment in internetbank or by making cash contributions to the pension fund or insurance policy in any branch of SEB banka.

 

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