As of 2018, the state will start taxing the interest earned on bank deposits, which are paid out in 2018 or later. The income tax payable on deposit interest is 20%.
Here, you will find the main changes that arise from the new Income Tax Act and can concern the depositors of Inbank. If you have any questions concerning the deferral of income tax, please read the Income Tax Act or ask the Tax and Customs Board for advice.
Frequently Asked Questions
Which deposits are affected by the amendment to the Income Tax Act?
The amendment concerns all of the bank deposits of private persons in the case of which interest is paid out in 2018 or later. The amendment will also apply to the deposits opened before the new version of the Act entered into force, but the interest on which is not paid out before 2018.
Is there anything I have to do in relation to the withholding of the income tax?
Inbank itself will withhold the income tax on the deposit interest paid out as of 1 January 2018. If you use an investment account for depositing, but haven’t informed Inbank about this, please do so in the Internet Bank as soon as possible.
Is it possible to defer the payment of the income tax and how can it be done?
You can defer the payment of income tax on the interest earned if you use the investment account specified in the Income Tax Act when depositing. If you use an investment account on the conditions specified in the Act, you will only have to pay income tax when the interest amount is taken in use, not when the specific deposit expires. You can also obtain detailed information about the investment account from the Tax and Customs Board.
How do I request non-withdrawal of income tax?
If you use an investment account for depositing and would like to defer the income tax liability, please inform Inbank about this in the Internet Bank as soon as possible.
In order to do this, open the “Deposit overview”, select the specific deposit, click on “Change” and then you can let Inbank know whether or not it has to withhold the income tax on the deposit by ticking the appropriate box. If you ask the bank to not withhold income tax on deposit interest, you must confirm that you have a legal basis for this whether you use an investment account or other options. You must make the request separately for each deposit.
If you don’t have access to the Internet Bank, you can submit an application in free format to our customer service by e-mail email@example.com or at Inbank office. Please specify the deposits to which your request applies in the application.
You can submit or amend an application in the Internet Bank until the day before the interest is paid out and it will enter into force immediately. If you inform us in any other manner, you have to submit the application at least four working days before the interest is paid out.
Can the payment of income tax be deferred by extending the deposit with the interest?
The payment of income tax cannot be deferred by extending the deposit. If you extend your deposit, the interest on the previous deposit will be paid to your customer account in Inbank (if only the principal is extended) or to the new deposit (if the deposit amount with interest is extended), which is why the interest that was paid out is immediately subject to income tax.
How will the information about the interest earned on deposits get on the income tax return?
The data of the interest earned on bank deposits will be automatically included in your pre-populated income tax return as of 2019.