The deadline for filing annual reports is approaching and for most companies it is 30 April. After the annual report is approved, the participants of the company may decide how the profit is distributed and to declare dividends. 

It is essential to remember that if the recipient of dividends is a non-resident then in some cases withholding tax (WHT) must be applied to dividends. It should be taken into account that:   

·        There is a general fixed WHT rate of 10% when dividends are paid;

·        Based on Double Tax Treaties it is often possible to reduce the tax to 5%;

·        If dividends are paid to a company or an individual resident in an EU or European Economic Area (EEA) country the payer does not have to withhold tax;

·        To benefit from any reduction in the rate of WHT, the payer must hold a residence certificate from the recipient’s country of residence before payment is made.

 KPMG would be very happy to assist in obtaining appropriate certification if needed.

New! On-call Tax Advice.

The On-call Tax Advice provided by KPMG is a comfortable and simple way of asking a difficult question by telephone or e-mail and effectively receiving practical advice from our tax professionals by telephone.

The On-call Tax Advice can help:

·        to save you time searching for answers to important questions relating to tax legislation

·        companies to manage risks relating to the non-observance of tax legislative requirements

·        to verify that your documents have been executed properly, which, as a consequence, can help you to avoid unpleasant surprises and tax surcharges.

See more on KPMG On-call tax advice services here!

Our team:

Steve Austwick, Partner, Head of Tax and Legal Services in the Baltics, and our Tax managers: Gunta Kaulina, Dr. Oec., Diana Kluskina and Solvita Rikveile.