On Personal Income Tax
Amendments to the law "On Personal Income Tax" came in force on 1st of January 2010, according to which banks must levy 10% income tax on individuals’ interest income from deposits and amounts payable as dividends to private individuals – residents and non-residents.
As a result of preparatory work carried out by the bank, started from 1st of January 2010, this procedure will be implemented automatically according to the conditions stipulated in the law, not causing inconveniences to customers – private individuals. In practice it means that customers-private individuals of the bank will receive interest income on the deposit maturity date, from which 10% income tax has been deducted, which shall be reflected in the customer's settlement account statement: crediting of the principal amount, total amount of the earned interest, and amounts of the deducted tax transferred to the state budget.
In addition, according to the abovementioned amendments to the law customers-private individuals must calculate and pay the tax on capital earnings from income (profit) from financial instruments (this is not applicable to non-residents), and sale of real estate, company, intellectual property themselves on the moment of conclusion of assets sale deeds. It means that if a customer-private individual sells one or several assets, the customer must calculate the total result (profit or loss) as a difference between the income from sale and acquisition expenses.
If profit is gained as a result of sale, the customer-private individual has to calculate the tax on capital earnings at a rate of 15%, submit a capital earnings tax declaration to the State Revenue Service, and transfer the tax on capital earnings to the state budget.
For more detailed information on these issues, please contact your private banker.