Taxation of deposit interest
Interest received on a deposit is taxed with income tax.
- Interest on which income tax has been withheld during the year is reported in part I of table 5.1 of the income tax return. If income tax has not been withheld from interest, the person must declare the interest received in part II of table 5.1 of the income tax return.
- If a person wishes to defer the income tax liability arising from interest on a deposit for investment purposes (investment deposit), they must have an open investment account with a credit institution (bank), a payment institution of a Contracting State to the EEA Agreement (hereinafter Contracting State), an e-money institution or an investment firm, and the money transferred to the deposit must come from an account used as an investment account. In this case, the principle must also be followed that at the end of the deposit term, the main amount and interest of the investment deposit must be deposited into the investment account.
- If the principle has been followed that the money transferred to the investment deposit comes from the investment account and if the person wishes to defer the income tax liability arising from the interest, then the person may notify the bank, payment institution, e-money institution, or investment firm in writing so that income tax is not withheld from the interest received. Such interest is taxed among investment account disbursements based on the data declared in table 6.5 of the income tax return. If income tax has been withheld from the interest received in an investment account, the taxed interest must be declared as a contribution to the investment account.
Taxation of income from crowdfunding platform loans
Below we explain the taxation of income from so-called peer-to-peer lending.
A natural person may receive the following types of taxable income from a loan:
- interest – the fee for the use of lent money is taxed under subsection 1 of § 17 of the Income Tax Act;
- late interest – fine for delay payable in the event of a delay in the performance of a monetary obligation is taxed under subsection 1 of § 12 of the Income Tax Act as other income;
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profit or loss from the transfer of a loan claim acquired through a platform managed by a crowdfunding service provider with a license from a Contracting State, or loss from a loan claim that the crowdfunding service provider has assessed as uncollectible in the same tax period – the profit/loss from the transfer of a loan claim will be taxed retroactively from 2024 as income from securities according to subsection 1 of § 15 and subsection 12 of § 39 of the Income Tax Act.
Profit is made if the selling price upon transfer or the market price upon exchange of a loan claim exceeds the acquisition cost. Depending on the method of granting or acquiring a loan, the acquisition cost is either the cost incurred in granting the loan, i.e. the amount lent, or the amount paid to acquire the loan claim.
Retroactively from 2024, it is possible to take into account in taxation the loss incurred from the transfer of a loan claim or the assessment of a loan claim as uncollectible, and it is also possible to offset the loss against the gain on securities received pursuant to subsection 2 of § 39 of the Income Tax Act.
The lender must report the interest, late interest, or profit/loss received from the transfer or assessment of a loan claim as uncollectible in the income tax return for the calendar year in which the income was received, including receipts to an account opened in its name on a platform managed by a crowdfunding service provider. Income from a loan must be declared even if the income is reinvested. The income tax payable by the lender is determined from the result calculated based on the income tax return.
Last updated: 30.12.2024
