income from capital other as capital gains consisting from:

• dividends,
• income from interest and equivalent income, also income related to interest income,
• income from investment of the private pension funds payments,
• income from the concluded life insurance contracts’ with funds saving;

*Tax rate for income from capital other as capital gains is 10%.

capital gains consisting of profit from alienating of various assets (stock, shares, financial instruments, investment funds certificates, debt instruments, real estate, company in meaning as in Civil law, intellectual property objects, etc.).

*Capital gains are taxed with personal income tax of 15%.

Key messages 

Regarding the charge of personal income tax now applied to income from capital it is important to remember, that a tax of 10% will be withheld only from interest income (profit – as it mentioned in Civil law), but not from all amount of deposit, and this tax will be withheld from interest income (profit – as it mentioned in Civil law) paid starting from January 1, 2010.

Please look at simplified example. If an individual deposits in credit institution Ls 500 with an annual interest rate of 12%, his annual gross profit will be Ls 60. But at the moment when bank pays to an individual the profit from the deposit, the bank will withhold and pay into national budget the personal income tax of 10%, i. e., Ls 6. This means that the net amount of interest (profit), which an individual will receive in his account, will be Ls 54. Please note, that the main deposited amount of Ls 500 is not liable to a personal income tax and will be returned to an individual in full if all terms of deposit agreement are fulfilled.

Such a tax is in force in most EU member states and other advanced countries.

Would you like to learn more?

Please ask our customer service specialists at any GE Money Bank branch or call us at 1878!