Exchange of tax information – FATCA & CRS | Luminor

According to the provisions of the Law "On Taxes and Fees" and in accordance with the procedure provided for in its subordinate regulatory acts on the automatic exchange of information on financial accounts (CRS) as well as in accordance with the current Agreement between the Government of the Republic of Latvia and the Government of the United States of America (in the text of the "US"), signed on June 27, 2014, due to which the Republic of Latvia has been required to report on certain accounts of the US Foreign Currency Accounts (FATCA) Law, Luminor Bank obliged to obtain information about the countries of residence of their Clients and provide information about the Client's accounts to the State Revenue Service if the Client is a tax resident of another country.

Exchange of tax information under FATCA

The Government of the Republic of Latvia and the US Government signed an intergovernmental agreement on improving the implementation of international tax obligations of June 27, 2014, under the US FATCA Taxation Act (hereinafter FATCA or the Foreign Account Tax Compliance Act), whose goal is to increase the budget revenues of the US and improve the declaration of taxes. Under this agreement, a Latvian financial institution must identify Clients, US tax residents and provide the necessary information about them to the State Revenue Service.
 
US taxpayers include the following:

  • Citizens and tax residents of the US;
  • Residents of the US (including holders of US residence permits or Green Cards);
  • Corporations registered in the US etc.
An individual US taxpayer is required by the legal acts to disclose the tax residence with the respective US Federal Taxpayer Identification Number (TIN) which can be obtained from the US tax authority.
 
A legal entity is required by the legal acts to disclose the tax residence with the respective US Federal Taxpayer Identification Number (TIN) and other relevant information of its beneficial owner. If more than 50% of the income of a legal entity whose beneficial owner is a US tax resident or citizen comprises passive economic activities, the financial institution must disclose the data of the legal entity to the State revenue service.
* Passive income is typically; dividends, interest, rent, royalties, payments from life insurance, certain other insurance income, profits from the sale of assets that provide passive income, profits from commodity sales, foreign exchange earnings and profits from derivatives. Rent that derives from active work of employees, i.e. the entity has employees, is generally not seen as passive income. 
More information about Exchange of tax information under FATCA can be found at US Internal Revenue Service or State Revenue Service webpage.

Exchange of tax information under CRS

The global standard for the automatic exchange of information on financial accounts in the tax sphere (hereinafter "CRS"), developed by the Organization for Economic Cooperation and Development (hereinafter "OECD"), was introduced in accordance with the procedure provided for in normative acts on the automatic exchange of information on financial accounts in the tax area.
 
An individual customer is required by the legal acts to disclose the tax residence with the respective Taxpayer Identification Number (TIN).
 
A legal entity is required by the legal acts to disclose the tax residence with the respective Taxpayer Identification Number (TIN) and other relevant information of its beneficial owner. If more than 50% of the income of a legal entity whose beneficial owner is a taxpayer in foreign jurisdiction comprises passive economic activities, the financial institution must disclose the data of the legal entity to the State revenue service.

* Passive income is typically; dividends, interest, rent, royalties, payments from life insurance, certain other insurance income, profits from the sale of assets that provide passive income, profits from commodity sales, foreign exchange earnings and profits from derivatives. Rent that derives from active work of employees, i.e. the entity has employees, is generally not seen as passive income.
More information about Exchange of tax information under CRS can be found at OECD homepage or State Revenue Service webpage.

How to provide information about your tax residence?

To confirm your tax residence as an individual customer, please:

1. Update Know Your Customer related information via Netbank or
2. Fill in Customer's questionnaire in each of  Customer Service Unit or
3. Fill in Individual Self-Certification form and return it:

  • by post (the letter should be addressed to Luminor Bank AS – FATCA/CRS, K. Valdemara street 62, LV-1013, Riga), or
  • by delivering it to the Luminor bank’s customer service unit.

If You are a legal entity, please, fill in Entity Self-Certification form and return it:

  • by post (the letter should be addressed to Luminor Bank AS – FATCA/CRS, K. Valdemara street 62, LV-1013, Riga), or
  • by delivering it to the Luminor bank’s Customer service unit.

If you need some other form to provide only US-related tax information, then you will find it on the US Internal Revenue Services’ webpage www.irs.gov.

What happens if a client fails to submit the required data?

Please be aware that if a customer does not provide the required information, the financial institution will be obliged to submit data of the person to the State revenue service.
 
Please be advised that Luminor bank cannot give you any FATCA and CRS related tax advice. If you have tax related questions, please contact a tax specialist or visit the webpages www.irs.gov (FATCA) and www.oecd.org/tax/ (CRS).
 

Links

Credit Institution Law
State Revenue Service
Foreign Account Tax Compliance Act (FATCA)
US Internal Revenue Service
CRS Taxpayer Identification Number (TIN) formats
CRS Tax residence rules
Multilateral Competent Authority agreement on the Exchange of Country-by-Country Reports
Agreement between the Government of the United States of America and the Government of the Republic of Latvia to Improve International Tax Compliance and to Implement FATCA