Signet Bank participates in the development of amendments to the law “On Personal Income Tax”

On November 14, 2022, amendments to the Law “On Personal Income Tax” will came into force, which will provide that from now on a Latvian private investor who has debt securities of a Latvian company in the Investment Account will receive interest income before tax in full, in contrast to the previous procedure, when personal income tax of 20% was withheld from interest payments.

In addition to changes in the coupon payment procedure, the amendments also provide for a reduced interest rate from the paid interest income on financial instruments, if the recipient of the income is a resident of another member state of the European Union or the European Economic Area. Instead of the previous 20%[i] rate, which the Latvian issuer had to withhold from interest payments if the payment is made to an individual, a 5% rate will be applied in the future.

A significant contribution to the development of the draft law was also made by Signet Bank – both by actively participating in the work of the working group and by drafting proposals.

The aim of Signet Bank’s proposals was to promote investments in the Latvian capital market by private investors, thereby attracting additional funding for Latvian companies, as well as to harmonize the regulatory framework for tax collection at the Baltic level. It is especially gratifying that Latvian investors will now be able to reap the full benefits of their Investment Accounts by investing in corporate bonds of local Latvian companies.

Edmunds Antufjevs, Head of Corporate Finance of Signet Bank

[i] The 20% rate may be reduced in accordance with double taxation conventions

About Signet Bank

Signet Bank was founded in 1991 and is one of the first banks of independent Latvia. The Bank’s strategy focuses on servicing local entrepreneurs and their businesses, with a particular emphasis on the quality of client capital services and structuring of investment projects. In 2021, Signet Bank provided clients with financing in the amount of EUR 200 million in the form of loans and bonds. Signet Bank’s shareholders are nine Latvian and international private investors, of which the largest shareholders are: Signet Acquisition III (25%), where the only shareholder is the US investor Alexander Solovey; AS RIT Group (19.50%) – a Latvian company owned by the Rapoport family, and SIA Reglink (15.93%), whose founder Irīna Pīgozne is a banking professional.