Latvijas Pasta Banka also known as LPB or « Pasta Bank » is a recently privately owned bank when it has for decades been the Latvian Postal Bank and which facing bankruptcy risk has been sold to private investors.
While the Latvijas Pasta bank is a reliable financial institution, it is however not a good place to bank in due to the lack of bank secrecy that will apply starting from the end of the year with the Automatic Exchange of Information for tax reasons that Latvia is part of. Hence, despite the strong privacy that Pasta bank claims to have, it concerns only third parts but not tax services to which they must report and will do so.
How will the taxman be informed of your Offshore account
The process of the Automatic Exchange of Information is quite simple, in precisely a year time the banks will have to list their clients having local assets and provide the tax services of the country of residence. Take an example, you have an account in Latvia but you are German resident, you also believe that because of the Latvian bank secrecy you will be safe. This is wrong !
The Bank will have to update an online « Automatic » file that automatically provides each country tax authority with it’s residents, the bank will not do it one by one but all at once an on an automatic basis, you will then be questioned by your taxman about your offshore account.
If you have an offshore account opened in Latvia, make sure to close it before December 31st 2017 and contact us for an alternative smarter solutions, there are many legal ways to hold an offshore account without taking any risk and out of the automatic exchange of information danger.