When private individuals invest in Notes, which are regulated financial instruments, we are obligated by law to deduct a withholding tax from their interest income. Here's how the tax withholding process works:
- You invest.
- The borrower of an underlying loan or the lending company makes an interest payment (such as regular interest, delayed interest, or pending payment interest).
- Based on the cash flows of the underlying loan, the Note issuer makes an interest payment on the corresponding Series of Notes.
- The full amount of the interest payment due to you is credited to your account.
- At the same time, a portion of the interest payment is automatically withheld from your account as withholding tax, based on the applicable tax rate.
- When you report your income in your country of tax residence, you can typically offset the total tax payable by the withheld amount, ensuring that you are not subject to double taxation. The withheld amount will be shown as a separate entry in your statement. It will also be visible on the Overview page and included in your tax report. Please note that no withholding tax is deducted for legal entities.