A case on taxation of incomes gained from deposits has been initiated
The First Panel of the Constitutional Court has initiated a case “On Compliance of Item 9 of Section 16.1 of the Law “On Personal Income Tax” with Article 1 and Article 105 of the Satversme of the Republic of Latvia”.
Article 1 of the Satversme provides that Latvia is an independent democratic republic, whilst Article 105 of the Satversme guarantees the right to own property.
The contested norm provides “in the meaning of this Law, the date of obtaining interest income and respectively the date of interest income payment shall be the date when a natural person is granted unrestricted right to act with the particular income in accordance with an agreement concluded or the law and the particular income becomes available in the form and according to the procedure established in relation to this person.”
The applicant Mārtiņš Trautmanis indicates that the contested norm provides for taxation with personal income tax of the deposits made before the norm was adopted. Persons, including the applicant, when making deposits, could not foresee that their incomes from deposits would be taxed. Consequently, the contested norm infringes the property right of the applicant and does not comply with the principle of legal security.
The Saeima was asked to provide, before 9 June 2010, a reply on factual circumstances of the case and legal justification thereof. The term of preparation of the case is 9 September 2010.
Linked case: 2010-25-01