Worldwide Trading Tax Index

Trading stocks and shares is a common way of boosting your earning potential and making your savings work for you. The number of day traders – individuals who do not trade professionally – has exploded in recent years, thanks to a wealth of apps and platforms that allow you to make quick and easy trades at the touch of a button.

For instance, mobile trading apps are now an enormously popular way of trading stocks and cryptocurrencies, because all you need is a mobile phone and an internet connection to start trading from anywhere in the world. There are many different brokers to choose from, each with its own unique trading platform, so it’s worth checking out the best stock brokers out there before diving straight in.

However, what many people forget to consider when getting into trading is the potential tax implications of this new revenue stream. Profits made from trading stocks and shares are usually covered by capital gains tax (CGT). However, depending on the specific country, these profits can be subject to other trading-related taxes, or even be taxed as regular earnings under the local personal income tax (PIT).

Worldwide Trading Tax Index

Countries with the highest trading tax rates for $2,000 capital gains

In this section, we highlight the countries with the highest tax rates on earnings from trading stocks, shares and commodities. If you’re a resident of one of these countries, you’ll have to be extra conscious of how much the local tax regime will carve out from your profits. When compiling the list, we looked at the tax rate on capital gains of $2,000, representing a 10% return on a $20,000 investment.

Countries with the highest tax rates for $2,000 capital gains

1. Ireland – Local CGT Rate: 33%

At the top of the list is Ireland, where profits from trading stocks and shares are subject to a 33% capital gains tax. Dividend withholding tax is also applied, which has a lower, 25% rate.

2. Finland – Local CGT Rate: 30%

Finland ranks second in terms of capital gains tax rates. Gains up to €30,000 are taxable at the rate of 30%, while gains above that are taxed at a rate of 34%. Also, 85% of dividend income is taxable at the same rates and thresholds, i.e. 30% up to €30,000. This means that 15% of dividends are tax-exempt.

3. France – Local CGT Rate: 30%

France has also a 30% capital gains tax; this is the so-called PFU (prélèvement forfaitaire unique) or flat tax. PFU consists of a 12.8% income tax and 17.2% social tax. Dividends are subject to the same tax rate. However, you can opt for progressive income tax rates if this would be more beneficial for you. In addition, French investors can use the Plan d’Epargne en Action (PEA) regime for reducing the tax burden when investing for the long-term. Under PEA, the Capital Gains Tax may be waived if you invest for at least 5 years and up to €150,000.

4. Sweden – Local CGT Rate: 30%

The default capital gains tax rate is 30% in Sweden as well. Dividends are subject to the same tax rate. It’s also important to note that while in most countries, you can offset the full amount of your losses against your profits, in Sweden only 70% of losses can be deducted.

Worldwide Trading Tax Index

Countries with no trading tax for a $2,000 profit

While some countries impose very high taxes on profits made from trading, there are many places around the world where no taxes would be applied to capital gains of $2,000 from stock trading.

Below is a list of various locations where residents are able to trade tax-free and keep all of their profits, making them some of the best places for traders to reside in.

Countries with no trading tax for a $2,000 profit

Worldwide Trading Tax Index

The complete Trading Tax Index

Here you can see the default tax rate applicable to profits from trading stocks and shares across over 130 different nations and territories. These rates are for resident individuals and are subject to change from the time of publication.

The complete Trading Tax Index

Worldwide Trading Tax Index

Methodology

Our aim was to show the countries with the best and worst tax rates for traders. To do this, we used data from PwC, KPMG, Deloitte, Expat and other sources.

Most countries use progressive tax systems so that traders who only trade or earn smaller amounts aren’t taxed excessively. For the purposes of calculating relevant applicable taxes included in this ranking, we assumed a $2,000 profit from trading local stocks. Please note that these tax rates are for resident individuals only, as tax rates will often differ for corporations and non-residents.

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