The Capital Market Council discussed the preparations for the application of the savings account
At the last meeting this year, the Capital Market Council discussed the preparations for the launch of the individual savings account and the implementation of the capital market development plan.
“The main focus was on the individual savings account. We believe that its emergence will help promote long-term accumulation in the capital market and will attract public attention, which, in turn, will broaden the range of investors”, says a member of the Board of the Bank of Lithuania Simonas Krėpšta chairing the meeting of the Capital Market Council.
Vice-Minister of Finance Rūta Bilkštytė stressed that the savings account tax regime (ISA) coming into effect on 1 January 2025 would ensure the deferral of taxation of the investment profits, i.e. neutral taxation of solely the final result of investments in various financial products – profits withdrawn from the account. Currently, it is also important to ensure awareness of market participants and clarity of ISA application in practice, therefore, the tax administrator, in collaboration with other authorities and market participants, is in the process of developing the rules for declaration of income generated through ISA. The rules will also present the main aspects of ISA application.
In order to make the use of the savings account, with effect from next year, as simple as possible, the Capital Market Council closely monitors the preparation process and considers various alternatives to make the process as smooth as possible. The Bank of Lithuania presented proposals for amendments to the laws aimed at simplifying tax declaration to the Capital Market Council for discussion. These amendments will be further discussed with public authorities and associations of market participants. It should be noted that individuals will be able to declare in 2026 the income received in the individual savings account in 2025.
Discussing the implementation of the capital market development plan, it was stressed that currently 24 out of more than 40 recommendations laid down in the Capital Market Development Guidelines have been fully or partially implemented and 17 recommendations are under implementation. Among the works done – also the clarification to market participants the provision of information on investments to customers. The Working Group of the Capital Market Council considering the fact that market participants lack clarity as to which information may be made public without prejudice to the requirements of legal acts, and which information would not be considered an investment recommendation, has developed a Q&A document on this topic. The document gives an exhaustive definition of the investment recommendation and information of general nature intended for the public, requirements for determining the target market for non-complex financial instruments, provision of marketing messages on simple financial instruments.
In the middle of October, the Bank of Lithuania together with Kaunas Financiers’ Club under Kaunas Chamber of Commerce, Industry and Crafts and the Association of Financial Analysts organised the event “Raising Finance in the Lithuanian Capital Market” for companies in Kaunas and Marijampolė region. The event discussed the Lithuanian capital market as an alternative for bank lending, the requirements when becoming a listed company, success stories and other important information.
The Capital Market Council was established last year aiming at ensuring collaboration between capital market participants (service renders and consumers), also public authorities shaping and implementing the capital market policy, promoting the development and progress of the capital market. The Council consists of the representatives from public authorities and private sector associations. This year, the Capital Market Council is chaired by the Bank of Lithuania.