Ukrainian clients of Latvian banks have received letters demanding to talk about his tax residence. These data are the local State Revenue Service promises to transfer FTS. Latvia Banks sent Ukrainians requirements to disclose tax and financial information about themselves.
In one of these letters, which received a bank customer Rigensis (have RBC), said that since January 1, 2016 Latvia acceded to the standard automatic exchange of financial information (Automatic Exchange of Information or AEOI). In a letter to his client Rigensis Bank warns that it must pass the data of the State Revenue Service of Latvia (SRS). And that, in turn, is obliged to send this information to the tax authorities of the relevant jurisdiction. In other words, in those countries where the owners Rigensis bank accounts - tax residents, written in the letter. The first reports on the new (opened in 2017) and large accounts (balance at 31 December 2015 of more than $ 1 million) Rigensis transmit SRS in 2017, stated in the letter. For all the rest - in 2018. At the same time Ukraine is likely to begin to exchange tax information with Latvia within the AEOI, said in response to the SRS request RBC spokesman.
The letter Rigensis Bank attached form, which must fill in the recipient. In it, among other things it is necessary to enter your tax residence and tax identification number. In completing this questionnaire Rigensis bank gives its clients a month. A spokesman for the Latvian bank Rietumu Eleanor Gajlish told that their clients must also report on their tax residency.
Identify their customers, banks are forced to because of the innovations in local legislation, says the press service of the State Revenue Service of Latvia. This refers to the rules of the Cabinet of Ministers № 20, which came into force in January 2016. It says that all Latvian financial institutions must determine which jurisdiction linked open their account. Press service of the State Revenue Service stressed that this requirement applies to all customers - not just to foreigners or Ukrainians specifically.
Baltic false start
Require customers Latvian banks are now, but to share tax information with Ukraine, the country will begin no earlier than 2018 - and if there is a bilateral agreement, says an international financial consultant FCP (Financial Management) Ltd Isaac Becker. While such agreements Ukraine does not have with any other country, he added. Partner UFG Wealth Management Dmitry Maples has no doubt that in 2018 Ukraine and Latvia will sign such an agreement. He added that up to this point FTS can only request information about specific accounts of citizens in Latvia.
"Demanding report on tax rezidentctve now Latvia is running ahead of the engine" - says Becker. He believes that since Latvia wants to improve its reputation. Local banks have repeatedly drawn attention not always money to the account they acted according to the rules, explains Becker.
However, Latvia is not the only country, which began collecting tax data in advance. In particular, such information is requested from existing clients, Swiss banks, said Maples of UFG Wealth Management. In addition, banks in Cyprus, Switzerland and the United Kingdom (although there is not a common practice) required to disclose tax information when opening an account, adds Becker. The AEOI standard says that they have every right to do.
Penalties for failure to report to the bank last establishes himself, said the press service of the State Revenue Service of Latvia. The letter Rigensis Bank said that such customers may refuse further cooperation. In addition, the bank will inform the State Revenue Service on customers who do not have documented their accounts, it said in the same letter.
If you do not respond to the question of tax residence, bank, obviously just to close your account, notice of Maples UFG Wealth Management. Difficulties at the client may also arise if the bank compares the already known and new information about the customer and the final picture will be controversial, adds Gajlish.