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“I took advantage of the campaign, I made a deposit in a credit union for two years with an annual interest of two percent, and then I received a 17-page letter from the tax inspection saying that I had to pay taxes,” he said the retired Bronė.
He sold the apartment and decided to entrust the money he received to the credit union instead of keeping it at home. You had to pay taxes because you received an interest payment for two years at a time. If the interest were paid at least once a year, it would not exceed € 500 and no taxes would be paid.
“Swedish banks do not pay the deposits at all, so I was glad that at least in the credit union I will get some interest and the money will be helped safely,” he shared his life story with emotion. Bronze. – Every day we hear on television that the ancients are attracting money. People keep money at home, because when you put it in the bank, you still have to pay a percentage so that later, when you need it, you can take it with you in cash, and older people are used to seeing and grabbing money ”.
Banks are depreciating
When Vakaru Ekspress inquired about the interest rates of banks operating in Lithuania, it became clear that no one expected money from citizens in banks. Swedbank offers 0.05% for term deposits. annual interest and has a share for seniors – add another 0.05 percent. Citadele Bank offers the same low percentage.
These interest rates on deposits are far from covering annual inflation, which stood at 0.2 percent at the end of December last year. Thus, people suffer losses when they keep money in banks because the money depreciates and the interest received does not compensate for the loss.
Most people may not be worried about deposit fees either. For, for example, a 0.05% deposit for Swedbank for one year. annual interest would have to pay income tax, the amount of the deposit would have to exceed up to 1 million euros. Obviously, ordinary people who have money in the main banks of the country do not run the risk of paying taxes.
In credit unions, differently
A completely different situation in credit unions. Credit unions operating in Lithuania offer around 2 percent annual interest on two- or three-year term deposits, which not only covers inflation losses, but also allows people to hope to earn. At the same time, however, the risk of exceeding the tax-free interest rate of € 500 also increases. Just make a deposit of more than 25,000 euros here, and within a year you can receive a letter from the tax office about the unpaid taxes.
The joy of finding someone to trust money so inflation doesn’t “eat it up” can be overshadowed by unplanned fiscal costs. At first glance, a 15 percent income tax may seem small, but if you didn’t look around or didn’t know and only earned interest after a few years, the tax amount may not be that low.
“It is the money of my life, all the taxes have already been paid and I have to pay again. So what should I think about such power, about the Seimas, which adopts such laws and millionaires sit in it? ”, Mr. Bronce resented.
“I lived with the occupiers, but there were no such things. I will pay the taxes, but I want others to not be in my situation and not allow the government to take money so easily,” said Bronė, who has now become more cautious. She made a term deposit of € 10,000 for two months and will receive interest of € 1.5, but she will no longer pay taxes for it. It is true that she has another extended deposit, which will expire this year. The woman said that she had already accepted the idea that he would have to pay taxes for it.
The procedure needs to be known
Laimutė Mačernienė, Director of the Tax Liability Department of the Klaipėda County State Tax Inspectorate, commented on the interest tax procedure applicable to Vakarų ekspres.
According to him, the interest received on deposits held in banks or other credit institutions is exempt from income tax when the total amount of interest received on these deposits during a calendar year does not exceed 500 euros. When the amount exceeds 500 euros, the income tax is exempt from 500 euros and the excess is subject to personal income tax: 15 percent. the rate is applied when the annual income of non-labor relationships or the relationships corresponding to their essence does not exceed 120 VMU (in 2020 – 148,968 EUR, in 2019 – 136,344 EUR); 20 percent – when it exceeds the amount of 120 VMU.
“It is important that the time of personal income taxation, according to legal acts, is considered the time of receiving the money, and the tax is calculated on the amount of interest, regardless of whether it is paid at the same time for several years, “emphasizes Mačernienė.
However, there is an exemption: a tax-free amount of € 500 can be applied to both spouses (the tax-free amount will reach € 1,000) if the resident receives interest on the joint property of the spouses.
The change in the taxation of interest above € 500 is no longer valid for one year; was introduced for the calculation and the declaration in 2016. income, and the provision applies to the deposit contracts concluded from 2014. January 1 Declaration of 2015 In the amount of the interest received, the amount of EUR 3,000 was exempt from the income tax on deposits. – the amount of 10,000 LTL.
Give advice
The website of the credit union “Mėmelio taupomoji kasa” (MTK) shows that it is possible to choose how interest on deposits will be paid. It is true that if you choose to pay interest at the end of the deposit term, it will be higher. If the man chooses to pay interest every month, it will be less.
“Higher interest is paid in cases where interest is paid at the end of the term. The amount of interest is also affected by the term of the deposit in the credit union. When a contract is concluded for a longer period long, usually higher interest rates will also apply, ”confirms Deimantė Valašinė, Deputy Director of MTK Management.
According to her, in case of tax problems, MTK specialists provide advice and explain in which cases a person’s interest on the deposit can be taxed. However, a savings and credit cooperative as a financial institution does not have the obligation to report on the taxes applied by the State Fiscal Inspection.
“Our specialists also have no information and cannot know how many people have deposits in several different credit institutions. We remind you that the interest on deposits held in different credit institutions are added and taxed in the same way according to the Personal Income Tax Law ”, says D. Valašinė.
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