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Investment Funds

Personal income tax refund conditions

Investments made in funds that are registered in a country - member of European Union or European Economic Zone - and are deemed as investments funds according to the law about Investment Management Companies. Additionally:

  • Investments were made before 31st of December 2009;
  • Investments have been in ownership of the same person (were not sold or exchanged) for 60 months or 5 years.

Limit

20%* from gross income of that year, about which an income declaration has to be submitted.

For example, if the declaration is submitted for year 2011, then the tax refund will be from income of year 2011.

Year that can be indicated in tax declaration

Year of fund purchase Year that can be indicated in tax declaration
2005. 2010., 2011., 2012., 2013., 2014.
2006. 2011., 2012., 2013., 2014.
2007. 2012., 2013., 2014.
2008. 2013., 2014.
2009. 2014.

All investments are not necessarily to be declared at onced, once 5 years have passed. Income declaration may be submitted even in year 2014.

For example, if there were several investments in different funds and the overall amount is greater than 20% from yearly gross income, only a part of investments can be specified in the declaration and the rest can be declared in future years.

Actions required to receive icnome tax refund:

  • Submit the year's income declaration to State Revenue Service and specify the fund investments amount. It is to be filled in line 9 of page D. Declaration form is available here.
  • Attach a statement of your securities account confirmed by the bank, containing information about the time at which investments were made and that they were not sold or exchanged in the next 5 years.

What can be included in the declaration:

  • Amount paid for the funds (current fund value does not matter)
  • Fund purchase fee

* This limit includes also donations, gifts, contributions to private pension funds, insurance premium payment. For example, if contributions to 3rd pillar pension were a total of 5% of gross income, and insurance payments - 6%, then the remaining 9% can be used for fund investments. (20%-5%-6%).

Description on tax refund provided here is informative and Swedbank does not hold responsibility for costs or losses that may occur in case the information provided is not complete, not precise or does not match clarifications made by State Revenue Service or another competent government institution on tax refund procedures. To receive full information on taxing of certain types of income Swedbank suggests all potential investors address their tax consultants.

Income (profit) tax

  • The tax rate is 20%.
  • The law requires that capital gains i.e. income from disposal of such capital assets as investment fund units, be taxed.
  • The capital gain is determined as a difference between the disposal (e.g. selling) price and acquisition value of the capital asset. The capital asset acquisition value also includes the cost of acquiring and holding securities, as well as other expenses related to acquisition of the capital asset as laid down by law.
  • In case of redemption of investment fund units acquired on or before 31 December 2009, the taxable income is determined by deducting the unit acquisition value from the unit redemption value, divided by the number of months when the units were held and multiplying by the number of months passed starting from 1 January 2010 till the month of redemption (including).
  • Example:

    • In April 2009, a customer subscribes for fund units for total amount of EUR 1,000 (including EUR 15 unit purchase fee).
    • In Feb 2018, the fund units are sold for EUR 1,500.
    • The unit holding costs were EUR 7 during this period.
    • The capital gains tax payable by the customer is as follows:

      (1 500 - 1000 - 15 - 7) / 107*x 98** = 478 / 107 x 98 x 20 % = 87,56 EUR

      * the number of months when the units were owned by a customer
      ** the number of months during which the units were owned by a customer after 1 January 2010

  • The capital gains will be calculated, tax liability will be declared and the tax will be paid by customers themselves. The tax return concerning capital gains must be filed with the State Revenue Service:
    • If the total income generated by a person (Latvian resident) from transactions with capital assets during the quarter will exceed EUR 1000, the declaration will have to be submitted on quarterly basis, until the 15th date of the month following the quarter in which the income from capital gains has been received.
    • If the total income generated from transactions with capital assets will not exceed EUR 1000 per quarter, the declaration will have to be submitted by 15 January of the following year.
  • Declaration form and additional information on how declaration should be filled can be found in Regulations of the Cabinet of Ministers No. 568.

Investing into fund it is important to remember that high risk investments not only have higher potential profit, but also higher potential losses. Securities' values can fluctuate in both positive and negative directions. Historical profitability does not ensure the same income in the future.
To find out what investments types will be acceptable for, fill in Investment profile questionnaire.

High liquidity

It is possible to invest into investment funds every business day (if the fund is public), as well as receive invested money in several days' time, depending on the fund.

Diversification

To minimize the risk, the fund's assets are invested in a dispersed manner in various objects. By making an investment, the investor acquires relative ownership to the fund's investment portfolio in proportion to the investment amount.

Professional management

Investment of fund assets is done by competent investment managers with rich experience in operating on financial markets, which will ensure efficient management of your portfolio.

Profitability

Investing in funds allows the investor to save time and money as it takes only one financial operation. By purchasing and selling securities fund make transactions for large amounts, thus more favorable terms can be achieved.

Convenient investment management in Internet Bank

Our Internet Bank site provides a detailed report of your investment and information about the current value. Likewise, you can easily make fund purchase, redemption or switch transactions, and open or change fund standing order, etc.

Opportunity to profit from the stock market dynamics

Investment funds are formed by uniting financial resources of many investors. These resources are further managed by professional investment managers, giving possibility to get profit from securities market.

Apply for consultation

Fund order

A fund order is an order you give to the bank if you wish to buy or sell units in a particular fund. In a purchase order you note the value up to which you wish to purchase units and state whether the issuance fee of the units forms part of the transaction amount or not. In a sales order you state the amount of units you wish to sell. The bank programme checks whether there are sufficient fund units in your securities account and enough money in your settlement account to pay the service fee. If so, the sales order will be carried out.

Fund standing order

On the basis of a standing order the bank purchases fund units for your securities account. You choose the frequency with which you purchase units and the amount you purchase when you enter into your standing order contract. If you do not have sufficient money in your account at the moment when the purchase of units is due to occur, this purchase is skipped and a new purchase order is submitted on the next date set out in the standing order.

Fund switch

You can exchange your units for another class of units in the same fund or for the units of another fund managed by the same company. Check the terms and conditions of specific funds for more information. Units are redeemed according to the number and sales price of the exchanged units and new units are issued based on their purchase price. No disbursements are made when you exchange units.

Securities transfer

Through Swedbank you can buy and sell securities which are traded on the stock market as well as those which are not. To trade in securities off the stock market, you will need to provide your account manager (i.e. Swedbank) with an order to buy or sell securities. The other party in your transaction must provide the same order to their account manager.

Securities transaction against payment means that Swedbank guarantees the transfer of the money from the buyer’s account to the seller’s account. Secure transaction means that no automatic transaction occurs: the buyer must pay for the securities.

Swedbank Group funds

Service Price, EUR
Receiving
Opening of securities account See Securities account
Securities account statements See Securities account
Subscription, redemption and switch of investment fund units options
  • Fund orders submitted to the Bank cannot be cancelled.
  • Fee for fund switch transactions charged only on delivery side.
  • Fund switch subject to the conditions specified in the fund terms.
Subscription Bond Equity and balanced
Swedbank Group funds Free of charge Free of charge
Regular automatic investment
Swedbank Group funds Free of charge Free of charge
Redemption / switch
Swedbank Group funds Free of charge Free of charge
Monthly Funds Safekeeping Fees
Swedbank Group funds Free of charge
Closing
Closing of securities account See Securities account

Effective from 09.12.2019

Franklin Templeton and other funds

Service Price, EUR
Receiving
Opening of securities account See Securities account
Securities account statements See Securities account
Subscription, redemption and switch of investment fund units options
  • Fund orders submitted to the Bank cannot be cancelled.
  • Fee for fund switch transactions charged only on delivery side.
  • Fund switch subject to the conditions specified in the fund terms.
Subscription Bond Equity and balanced
Franklin Templeton funds 0,50% (min. 7,00) 1,50% (min. 7,00)
Other funds 0,50% (min. 21,00) 1,50% (min. 21,00)
Regular automatic investment
Franklin Templeton funds 0,50% (min. 1,50) 1,50% (min. 1,50)
Other funds 0,50% (min. 1,50) 1,50% (min. 1,50)
Redemption / switch
Franklin Templeton funds 7,00 7,00
Other funds 21,00 21,00
Monthly Funds Safekeeping Fees
Franklin Templeton funds See Securities account
Other funds See Securities account
Closing
Closing of securities account See Securities account

Effective from 09.12.2019

Contacts

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