The Jurisdiction Register

NO federal or state net-wealth tax. Recurring proposals (Warren federal 2%/3%; CA AB 259; WA; NY) have never been enacted. Note the US taxes CITIZENS AND GREEN-CARD HOLDERS on worldwide income wherever resident — residence-based planning does not work for US persons.

QUASI-WEALTH TAXES: (i) Local ad valorem property tax on real estate, typically 0.3%-2.5% of assessed value (NJ ~2.2%, IL ~2.1%, HI ~0.3%). (ii) IRC Sec. 877A expatriation "exit tax": covered expatriates (net worth > $2m, or 5-yr average tax > ~$206k (2025), or non-compliance) are deemed to sell all worldwide assets at FMV on the day before expatriation; 2025 exclusion ~$890,000. Deferred comp / IRAs taxed separately. This is a one-off wealth tax on departure and is the single biggest planning issue for mobile US persons.

LOCAL/STATE OVERLAY: no state levies a net-worth tax, but WASHINGTON STATE levies a 7% excise tax on long-term capital gains above ~$270k (indexed), plus a 2.9% surcharge above $1m (9.9% total) from 2025 — a capital-gains tax in a state with no income tax.

FEDERAL RATES. Short-term (held <= 1 year): ordinary income rates, top 37%, + 3.8% Net Investment Income Tax (NIIT) = 40.8%. Long-term (held > 1 year): 0% / 15% / 20%, + 3.8% NIIT = 23.8% top. The 20% band begins around $550k single / $620k MFJ (2026, indexed). The 2025 OBBBA made the TCJA rate structure permanent.

ASSET-CLASS DIFFERENCES (all + 3.8% NIIT):

• Listed equities / bonds / funds: 23.8% LT, 40.8% ST.
• COLLECTIBLES (physical gold and silver, GLD/SLV and other physically-backed metal ETFs, art, antiques, wine, rare coins, stamps): max 28% + 3.8% = 31.8%, regardless of how long held.
• Sec. 1256 CONTRACTS (regulated futures, broad-based index options such as SPX/XSP/NDX, non-equity options, futures on currencies): MARKED TO MARKET every 31 Dec and taxed 60% long / 40% short irrespective of holding period = 26.8% before NIIT, 30.6% with. Losses may be carried BACK 3 years against prior 1256 gains (Form 1045). Materially better than SPY options (equity options, ordinary ST treatment).
• Real property: 20%/23.8% plus 25% "unrecaptured Sec. 1250" depreciation recapture.
• Sec. 1202 QSBS: up to 100% exclusion; OBBBA 2025 added tiered exclusions at 3 yrs (50%), 4 yrs (75%), 5 yrs (100%) and raised the cap to $15m for stock issued after 4 Jul 2025.
• Crypto: property; LT/ST as above.

LOSSES: capital losses offset capital gains without limit (ST losses net first against ST gains); excess net capital loss offsets only $3,000/yr of ordinary income; carried forward INDEFINITELY, no carryback for individuals. WASH SALE rule (Sec. 1091) disallows a loss if substantially identical securities are bought 30 days before or after; it does NOT apply to Sec. 1256 contracts and — as of 2026 — still does not apply to crypto (repeatedly proposed; verify). Also watch Sec. 1092 straddle rules and Sec. 1259 constructive sales.

BASIS: FIFO default; SPECIFIC IDENTIFICATION permitted for securities (the foundation of US tax-loss harvesting and direct indexing); average cost for mutual funds. STEP-UP IN BASIS AT DEATH (Sec. 1014) eliminates all unrealised gain — the dominant US planning fact.

Ordinary income, top federal 37% + 3.8% NIIT = 40.8%, plus state. OID and market discount accrue currently.

EXEMPT / PREFERENTIAL: municipal bond interest is exempt from federal tax (and from state tax in the issuing state) — the classic high-bracket allocation; taxable-equivalent yield = muni yield / (1 - 0.408). US Treasury and agency interest is exempt from STATE and local tax (worth ~13.3% in California). Private-activity muni interest is an AMT preference.

State income tax adds 0% (FL, TX, NV, WA, SD, WY, AK; NH repealed its interest & dividends tax from 2025) to 13.3% (CA), 11% (HI), 10.9% (NY, plus NYC ~3.9%), 10.75% (NJ). Combined top on interest can reach ~54% for a New York City resident.

QUALIFIED DIVIDENDS are taxed at the long-term capital gains rates 0%/15%/20% + 3.8% NIIT = 23.8% top — a large preference over interest (40.8%). Requirements: paid by a US corporation or a "qualified foreign corporation" (resident in a country with a comprehensive US income tax treaty, or the shares are readily tradable on a US exchange), AND the holder satisfies a >60-day holding period within the 121-day window around the ex-date (>90/181 days for preferred). Hedging a position tolls the holding period.

NON-QUALIFIED (ordinary, up to 40.8%): REIT dividends, most BDC dividends, bond-fund distributions, money-market income, dividends on shares held under the holding period, payments in lieu of dividends on lent shares, MLP ordinary income, and dividends from PFICs.

REIT dividends qualify for the 20% Sec. 199A deduction (made permanent by OBBBA 2025): effective 29.6% + 3.8% = 33.4%.

PFIC TRAP: non-US pooled funds (UCITS ETFs, SICAVs, foreign mutual funds) are PFICs for US persons — punitive Sec. 1291 interest-charge regime at 37% plus interest, unless a QEF or mark-to-market election is available. US persons abroad must hold US-domiciled funds.

Foreign withholding tax on foreign dividends is creditable (Form 1116) but subject to basket limitations; in a tax-deferred account it is a permanent leak.

UNIFIED FEDERAL ESTATE AND GIFT TAX at a flat 40% top rate. Basic exclusion $15,000,000 per person from 2026 (OBBBA 2025), indexed — $30m per married couple with PORTABILITY of the deceased spouse's unused exclusion (form 706 election required). Unlimited marital deduction for a US-citizen spouse (a QDOT is required for a non-citizen spouse). Unlimited charitable deduction. Separate GST tax at 40% with its own $15m exemption (not portable).

GIFTS: annual per-donee exclusion ~$19,000-$20,000 (2026, indexed), unlimited for direct payments of tuition and medical bills. Lifetime gifts consume the unified exclusion. Gifted assets carry over basis (no step-up) — so gift high-basis assets and BEQUEATH low-basis assets.

STATE LAYER (major planning variable): 12 states + DC levy estate tax — OR (threshold $1m, up to 16%), MA ($2m), WA (up to 20%, the highest US rate), MN, IL ($4m), NY ($7.16m with a "cliff" that wipes out the exemption entirely above 105% of the threshold), MD, VT, RI, CT (matched to federal), HI, DC. Six states levy INHERITANCE tax on the recipient: PA (4.5% lineal, 12% sibling, 15% other), NJ, KY, MD, NE (county-level); IA completed its phase-out in 2025. FL, TX, NV, AZ, TN, NH have none.

NON-US PERSONS: the US taxes NON-RESIDENT ALIENS on US-SITUS assets at 40% with only a $60,000 exemption. US-situs includes shares of US corporations (wherever held), US real estate and tangible property, but NOT US bank deposits, portfolio-interest debt, or shares of non-US corporations. A European or Swiss client holding $10m of US stocks directly faces ~$3.98m of US estate tax. Standard fixes: hold US equities through a non-US holding company, an Irish/Luxembourg-domiciled UCITS ETF (non-US situs), or an irrevocable non-US trust; or rely on a US estate tax treaty. NRAs pay US GIFT tax only on US real estate and tangible property — NOT on gifts of US shares, so lifetime gifting of US stock by an NRA is a clean fix.

SWITZERLAND: INCOME TAX TREATY in force (1996; 2009 Protocol effective 20 Sep 2019 — mandatory binding arbitration, expanded information exchange, 0% withholding on dividends to pension funds and to 10%+ corporate holders). Dividend withholding 15% portfolio / 5% for 10%+ corporate holders; interest and royalties generally 0%.

ESTATE TAX TREATY with Switzerland in force (1951) — situs and credit relief, pro-rated unified credit for Swiss decedents holding US assets.

The US has ~66 comprehensive income tax treaties, and only 15 ESTATE/GIFT tax treaties: Australia, Austria, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, South Africa, Switzerland, UK, and Canada (estate relief delivered through Art. XXIX B of the income treaty rather than a standalone estate treaty).

NOTABLE GAPS for this table: NO US estate treaty with Spain, Portugal, Belgium, Luxembourg, Poland, Sweden (terminated 2008), the Baltics, Cyprus, Malta, Czechia, Slovakia, Hungary, Romania, Bulgaria, Croatia or Slovenia.

NOTABLE INCOME TREATY GAP: the US TERMINATED its treaty with HUNGARY effective 1 Jan 2024.

CORE VEHICLES (2026 figures approximate/indexed): 401(k)/403(b) employee deferral ~$24,500 (+$8,000 catch-up at 50+, ~$11,250 "super catch-up" at 60-63); total 415(c) additions ~$72,000; Traditional/Roth IRA ~$7,500; SEP/solo 401(k) for the self-employed; defined-benefit / cash-balance plans (six-figure deductible contributions for older high earners); HSA (triple tax-free); 529 plans (tax-free growth, $19k/yr per beneficiary or 5-year superfunding, 529-to-Roth rollovers up to $35k).

RATE/TIMING ARBITRAGE: Roth conversions in low-income years or between retirement and RMD age; backdoor and mega-backdoor Roth; NUA (net unrealised appreciation) on employer stock in a 401(k) — LTCG rates instead of ordinary; QSBS stacking and Sec. 1045 rollovers; Sec. 1031 like-kind exchanges (real property only); Qualified Opportunity Zones (made permanent by OBBBA with rolling 5-year deferral from 2027); exchange funds (7-year lock, diversification without realisation); charitable remainder trusts; donor-advised funds funded with appreciated stock; direct indexing / systematic tax-loss harvesting; ETF in-kind redemption (structurally suppresses capital gain distributions vs mutual funds); PPLI and private placement variable annuities for hedge-fund and credit exposure.

ESTATE FREEZES: GRATs (zeroed-out, rolling short-term), sales to intentionally defective grantor trusts (IDGTs) at the AFR, SLATs, CLATs, FLPs/LLCs with valuation discounts, and life insurance in an ILIT.

YES — an annual NET WEALTH TAX levied at CANTONAL and COMMUNAL level (no federal wealth tax) on WORLDWIDE net assets. Foreign real estate and foreign business permanent establishments are excluded but count for rate progression ("exemption with progression"). DEBTS ARE DEDUCTIBLE (allocated proportionally between Swiss and foreign assets) — mortgage leverage is a legitimate wealth-tax reduction tool.

RATES vary enormously by canton AND commune (each commune applies a multiplier to the cantonal rate). Broad top-end ranges on financial wealth:

• Low: Nidwalden, Obwalden, Schwyz, Zug, Appenzell IR, Thurgau, Uri ~0.1%-0.25%
• Mid: Zurich, Aargau, Lucerne, St. Gallen, Bern, Solothurn ~0.25%-0.6%
• High: Geneva, Vaud, Basel-Stadt, Basel-Landschaft, Neuchatel, Jura ~0.6%-1.0%

Personal allowances are modest (roughly CHF 50,000-250,000 depending on canton and family status).

TAX SHIELD ("bouclier fiscal"): Geneva, Vaud, Bern and several other cantons cap combined income + wealth tax at a percentage of income (e.g. Geneva 60% of net taxable income, with wealth deemed to yield at least 1%). Essential for low-yield / growth portfolios in high-wealth-tax cantons.

VALUATION: listed securities at 31 December market value; unlisted shares by the "Practitioners' Method" (2x earnings value + 1x net asset value, /3, with minority discounts up to 30%); pension assets (Pillar 2 and 3a) are EXCLUDED from the wealth tax base — a significant planning lever.

PLANNING: the residence canton/commune is the single largest controllable variable. Moving from Geneva (~1.0%) to Zug (~0.2%) on CHF 50m saves ~CHF 400,000 PER YEAR.

PRIVATE CAPITAL GAINS ON MOVABLE PROPERTY ARE COMPLETELY TAX-FREE — no federal, cantonal or communal tax, at any holding period, on shares, bonds, funds, ETFs, gold, art, collectibles, crypto or derivatives. This is the defining feature of the Swiss system and the strongest argument in the world for a total-return, low-yield portfolio.

THE CRITICAL EXCEPTION — "PROFESSIONAL SECURITIES DEALER" RECLASSIFICATION. Under Federal Tax Administration Circular No. 36 (2012), an investor recharacterised as a quasi-professional trader is taxed on gains as SELF-EMPLOYED INCOME at full ordinary rates (~22%-45%) PLUS AHV/AVS social security at ~10%, but may then deduct losses. Circular 36 gives a five-part SAFE HARBOUR — meet ALL five and you are safe:

• Securities sold were held at least 6 months;
• Annual transaction volume (purchases + sales) does not exceed 5x the portfolio value at the start of the year;
• Net capital gains are less than 50% of net income for the tax period;
• No debt financing of the securities, or investment income exceeds the interest expense on the debt;
• Derivatives (especially options) are used only to HEDGE the taxpayer's own portfolio.

Failing the safe harbour is not automatically fatal but shifts the burden and invites assessment on the facts. THIS IS THE BINDING CONSTRAINT ON ACTIVE MANAGEMENT FOR SWISS CLIENTS — a high-turnover or leveraged or option-heavy mandate can convert a 0% regime into a ~50% regime.

CAPITAL LOSSES ARE NOT DEDUCTIBLE (the symmetric consequence of gains being exempt). Tax-loss harvesting has NO value in Switzerland.

SWISS REAL ESTATE: cantonal real estate gains tax (Grundstueckgewinnsteuer), separate and progressive, degressive with holding period — up to ~50% on speculative short holds, falling to ~10-25% after 20+ years.

FUNDS: a fund's capital gains are tax-free to the Swiss investor IF the fund reports income and gains separately (Swiss tax reporting); if not separately reported, the whole distribution risks being taxed as income. Accumulating funds do NOT help — see Interest/Dividends.

FULLY TAXABLE as ordinary income at combined federal (max 11.5%) + cantonal + communal rates. Approximate combined top marginal rates on investment income: Zug ~22.4%, Schwyz ~23-25%, Nidwalden ~24%, Lucerne ~31%, Zurich ~39.8% (city), Basel-Stadt ~40.5%, Vaud ~41.5%, Bern ~41.4%, Geneva ~44.8%.

SWISS ANTICIPATORY TAX (Verrechnungssteuer) of 35% is withheld at source on interest from Swiss bank accounts and Swiss-issued bonds; it is fully refunded/credited to Swiss residents who declare the income (and is a de facto penalty for non-declaration). Foreign-source interest is not withheld but must be declared.

IMPORTANT — DEEMED INCOME FROM FUNDS: Switzerland taxes the INVESTOR on a fund's underlying income whether distributed or accumulated. An accumulating (thesaurierende) UCITS ETF does NOT defer Swiss tax; the annual reported income is taxable. Only the fund's CAPITAL GAINS component escapes, and only where separately reported. Consult the ICTax database (ictax.admin.ch) for the taxable component of each ISIN — this is a routine and essential step in Swiss portfolio management.

TAXED AS ORDINARY INCOME AT THE SAME RATES AS INTEREST — Switzerland gives NO preferential rate for portfolio dividends. Combined top marginal ~22% (Zug) to ~45% (Geneva).

The "qualified participation" relief — which reduces the taxable base by 30%-50% federally and 20%-50% cantonally — applies ONLY to holdings of AT LEAST 10% of a company's share capital. It is irrelevant to a diversified portfolio.

35% Swiss anticipatory tax on Swiss company dividends, refundable to declaring residents. Foreign withholding tax is relieved through the DA-1 / R-US 164 reclaim procedure up to treaty rates; unrelieved excess is a dead-weight cost.

THE CENTRAL SWISS INSIGHT: because CAPITAL GAINS ARE 0% and DIVIDENDS AND INTEREST ARE TAXED AT UP TO ~45%, the tax-efficient Swiss portfolio is maximally weighted to CAPITAL APPRECIATION and minimally to yield. The tax spread between a 4%-yield equity portfolio and a 1%-yield growth portfolio for a Geneva resident is ~135 basis points of return per year. Return of capital, share buybacks (tax-free), and low-dividend growth equities are structurally favoured over high-dividend value, REITs, and bonds.

Note that certain distributions are exempt: repayments from the "capital contribution reserve" (Kapitaleinlagereserven / KER) are treated as tax-free return of capital rather than as dividends — a meaningful screen for Swiss-listed holdings.

NO FEDERAL inheritance or gift tax. Cantonal (and in some cantons communal) inheritance and gift tax, determined by the DECEDENT'S/DONOR'S canton of domicile for movable assets and by the canton of situs for real estate.

SPOUSES AND REGISTERED PARTNERS ARE EXEMPT IN EVERY CANTON.

DIRECT DESCENDANTS are exempt in nearly all cantons; the exceptions are Appenzell Innerrhoden (~1%), Vaud (up to ~3.5%) and Neuchatel (3%), with Lucerne levying at communal level in limited cases.

PARENTS/SIBLINGS: typically 6%-25%.

UNRELATED BENEFICIARIES: heavily taxed — up to ~55% in Geneva (with surcharges), ~50% in Vaud, ~40% in Bern, ~36% in Zurich.

GIFT TAX generally mirrors inheritance tax; several cantons apply a 5-year clawback of gifts made before death.

2025 REFERENDUM: the JUSO federal initiative for a 50% federal inheritance and gift tax above CHF 50m was put to a national vote on 30 November 2025 and was REJECTED. Verify the outcome and any successor proposals before relying on this.

NO STEP-UP is needed because there is no capital gains tax — heirs inherit assets that were never taxed on gain in the first place.

FOR US PERSONS AND US ASSETS: the 1951 US-Switzerland estate tax treaty allocates situs and provides a pro-rated unified credit; without it, a Swiss decedent's US-situs shares face 40% US estate tax over a $60,000 exemption.

UNITED STATES: INCOME TAX TREATY in force (1996; 2009 Protocol effective 20 September 2019 — mandatory binding arbitration, broad exchange of information, 0% withholding on dividends paid to qualifying pension funds and to 10%+ corporate shareholders, 15% portfolio dividends, 0% interest). Swiss investors reclaim excess US withholding via Form W-8BEN + the R-US 164 procedure.

ESTATE TAX TREATY with the US in force (1951) — situs rules and a pro-rated US unified credit for Swiss-domiciled decedents.

FATCA Model 2 IGA; Switzerland exchanges CRS data with ~110 jurisdictions.

Switzerland has ~100+ comprehensive income tax treaties, and a much smaller network of INHERITANCE tax treaties: Austria (terminated by Austria), Denmark, Finland, Germany, Netherlands, Norway, Sweden (terminated), UK, USA. NOTABLY, France TERMINATED the France-Switzerland inheritance tax treaty effective 1 January 2015 — French heirs of Swiss residents can face double taxation.

PILLAR 3a (tied private pension): 2025/2026 deductible limit CHF 7,258 for those in an occupational scheme, CHF 36,288 (20% of earned income) for those without. Assets grow FREE of income and wealth tax; withdrawal is taxed separately at a reduced rate (~2%-12% depending on canton and amount). NEW: from 2025, retroactive "buy-ins" for missed 3a years are permitted for up to 10 prior years (gaps arising from 2025 onwards). Stagger multiple 3a accounts and withdraw in different years to break the progression.

PILLAR 2 VOLUNTARY BUY-INS (Einkauf): purchase of missing occupational-pension years is FULLY DEDUCTIBLE from taxable income with no annual cap other than the certified shortfall. Assets are exempt from wealth tax and their returns are untaxed. Constraint: a 3-year lock before any lump-sum withdrawal, or the deduction is retroactively denied. Withdrawal taxed at a reduced separate rate (Zurich ~5%-13% progressive; Schwyz ~2%-5%). Note: a federal proposal (Entlastungspaket 27) to tax pillar 2/3a lump sums at ordinary rates has been floated — monitor.

CANTONAL ARBITRAGE: relocating to a low-tax canton is itself the largest Swiss "strategy" — for income, wealth and lump-sum withdrawal rates.

LUMP-SUM TAXATION (Pauschalbesteuerung / imposition d'apres la depense) — SPECIAL REGIME. Available to NON-Swiss nationals taking up Swiss residence for the first time (or after 10 years abroad) who do NOT carry on gainful activity in Switzerland. Tax base = the GREATER of (i) 7x annual rent or rental value of the residence, (ii) the federal minimum of ~CHF 430,000 (indexed), or (iii) the cantonal minimum (CHF 400,000 to over CHF 1,000,000 depending on canton), subject to a "control calculation" against actual Swiss-source income and assets. Deemed WEALTH base is typically 20x the deemed income base. ABOLISHED at cantonal level in Zurich, Schaffhausen, Appenzell AR, Basel-Landschaft and Basel-Stadt; available in Geneva, Vaud, Valais, Ticino, Grisons, Zug, Schwyz, Lucerne, Obwalden, Nidwalden and others. Typical all-in annual cost CHF 150,000 - CHF 1,000,000+. Individual advance rulings are standard and negotiated with the canton.

MORTGAGE LEVERAGE: interest on debt is deductible against income, and the debt reduces the wealth tax base — Swiss homeowners routinely do NOT amortise mortgages.

NO net wealth tax. The Vermoegensteuer has not been levied since 1997 after the Federal Constitutional Court held its valuation rules unconstitutional. Reintroduction (typically proposed at 1% above EUR 2m) is a standing SPD/Greens/Linke policy demand — a live political risk rather than current law.

Real property tax (Grundsteuer) was reformed from 1 January 2025 following the 2018 constitutional ruling; rates now vary by Land and municipality, with a "Bundesmodell" and several Land-specific models. Typically 0.1%-0.5% of the new assessed value.

No annual tax on securities. Germany has no securities transaction tax (a European FTT remains under discussion).

SECURITIES: ABGELTUNGSTEUER — a flat 25% withholding tax, plus the 5.5% solidarity surcharge on the tax = 26.375%, plus church tax where applicable (8% in BY/BW, 9% elsewhere) = up to 27.99%. Applies to shares, bonds, funds, ETFs, certificates, options and futures.

NO LONG-TERM/SHORT-TERM DISTINCTION for securities: the old 1-year "speculation period" was abolished for securities acquired after 31 December 2008.

BUT A CRUCIAL DISTINCTION FOR NON-SECURITIES (Sec. 23 EStG, "private Veraeusserungsgeschaefte"):

• PHYSICAL GOLD, silver, art, antiques, classic cars, wine, and other private movable assets: gains are COMPLETELY TAX-FREE after a 1-YEAR holding period; taxed at full progressive rates (up to 45% + 5.5% soli = 47.475%) if sold within a year. The Federal Fiscal Court (BFH) has extended the exemption to physically-deliverable gold ETCs such as Xetra-Gold and Euwax Gold II — a major structural advantage over gold funds.
• Real estate: tax-free after 10 years (or 3 years of own use).
• Crypto: tax-free after 1 year (BFH confirmed 2023); EUR 1,000 de minimis within the year.

LOSS RING-FENCING (the key German constraint, Sec. 20(6) EStG):

• Losses on SHARES (Aktien) may ONLY be offset against gains on SHARES. They cannot offset dividends, interest, fund gains or derivative gains. This restriction is before the Federal Constitutional Court (2 BvL 3/21, referred by the BFH in 2023) — a favourable ruling would be worth a great deal retroactively.
• The former EUR 20,000 annual cap on offsetting losses from DERIVATIVES (Termingeschaefte) and from worthless/written-off assets was ABOLISHED by the Jahressteuergesetz 2024, retroactively for all open cases. Derivative losses are now freely offsettable against other capital income (though still not against non-capital income). This was a major and welcome change for options and futures strategies.
• All other capital losses form a general pot offsettable against all capital income.
• Losses carry forward indefinitely; no carryback. Request a "Verlustbescheinigung" from the bank by 15 December to move losses between institutions.

SAVER'S ALLOWANCE (Sparer-Pauschbetrag): EUR 1,000 single / EUR 2,000 jointly assessed — allocate via a Freistellungsauftrag across banks.

FUNDS AND ETFs (InvStG 2018): PARTIAL EXEMPTION (Teilfreistellung) of 30% for equity funds (>=51% equities), 15% for mixed funds (>=25%), 60%/80% for real estate funds — so an equity ETF's effective rate is 26.375% x 70% = 18.46%. Offsetting this, the VORABPAUSCHALE taxes a deemed annual return on ACCUMULATING funds even with no distribution: base rate (70% of the Bundesbank base rate at 1 January; 2.53% for 2025) x NAV at the start of the year, capped at the actual NAV increase, less distributions, then x 70% partial exemption x 26.375%. Cash must be available in the account each January to settle it.

26.375% flat Abgeltungsteuer (25% + soli), + church tax where applicable. Withheld at source by German banks; foreign-account interest is self-declared in Anlage KAP.

IDENTICAL RATE TO CAPITAL GAINS AND DIVIDENDS — Germany's flat regime is rate-neutral across all three, so asset location is driven by loss-offset rules and the Vorabpauschale, not by rate differentials.

GUENSTIGERPRUEFUNG: a taxpayer whose personal marginal rate is BELOW 25% can elect assessment at the progressive scale for all capital income — relevant for low-income spouses, children, and retirees.

26.375% flat (25% + 5.5% solidarity surcharge), + up to 9% church tax = max 27.99%. Withheld at source. NO preferential rate versus interest.

There is no partial-exemption or half-income relief for ordinary portfolio shareholdings. The Teileinkuenfteverfahren (60% inclusion at progressive rates, with expense deductibility) can be ELECTED only by holders of at least 25% of a company, or 1% plus a professional role.

Foreign dividend withholding tax is creditable against the 25% German tax up to the treaty rate; the excess must be reclaimed from the source state. Because German tax is only 25%, foreign WHT above 25% cannot be fully absorbed.

Equity funds get the 30% partial exemption, so a distributing equity ETF's dividends bear an effective 18.46%, materially better than a directly-held share's 26.375%. THIS IS A REAL AND OFTEN OVERLOOKED ASSET-LOCATION EDGE IN GERMANY: route equity beta through funds, not single names, unless loss-harvesting on single names is the priority.

ERBSCHAFT- UND SCHENKUNGSTEUER — a unified inheritance and gift tax levied on the RECIPIENT, on worldwide assets if either the decedent/donor or the recipient is German-resident.

CLASS I (spouse/registered partner, children, stepchildren, grandchildren, and — for inheritances only — parents): rates 7% / 11% / 15% / 19% / 23% / 27% / 30% on bands from EUR 75,000 to over EUR 26m.

CLASS II (siblings, nieces/nephews, parents receiving gifts, in-laws, divorced spouse): 15% to 43%.

CLASS III (everyone else, including unmarried partners): 30% to 50%.

PERSONAL ALLOWANCES, REFRESHING EVERY 10 YEARS: spouse EUR 500,000; child EUR 400,000 (per parent, so EUR 800,000 per child from two parents); grandchild EUR 200,000; Class II EUR 20,000; Class III EUR 20,000. A spouse also receives a pension allowance of up to EUR 256,000.

KEY RELIEFS: the family home passes tax-free to a spouse, and to children up to 200 sqm, if occupied for 10 years. Business assets qualify for 85% or 100% relief subject to payroll and holding tests. Household effects EUR 41,000 (Class I).

PLANNING: the 10-year refresh on allowances makes SERIAL LIFETIME GIFTING the central German strategy — a couple can move EUR 800,000 per child every decade tax-free, plus EUR 400,000 to each grandchild. "Kettenschenkung" (gifting via the spouse to use both allowances) is respected if the intermediate donee is genuinely free to dispose. Retained usufruct (Niessbrauch) reduces the taxable value of a gift by the capitalised value of the reserved income.

NO STEP-UP IN BASIS for income tax: heirs inherit the decedent's acquisition cost, so unrealised gains remain latent and are eventually taxed at 26.375%.

UNITED STATES: INCOME TAX TREATY in force (1989, substantially amended by the 2006 Protocol — 0% withholding on dividends to 80%+ corporate holders and to pension funds, 15% portfolio, 0% interest, mandatory arbitration).

US-GERMANY ESTATE, INHERITANCE AND GIFT TAX TREATY in force (1980, 2000 Protocol) — situs rules, a marital deduction of up to 50% of the estate for the surviving spouse, and a pro-rated US unified credit. One of the most useful US estate treaties.

SWITZERLAND: INCOME TAX TREATY in force (1971, amended repeatedly, most recently the 2023 protocol). GERMANY-SWITZERLAND INHERITANCE TAX TREATY in force (1978). WATCH the "ueberdachende Besteuerung" (overriding taxation) provisions: Germany retains extended taxing rights over individuals who move to Switzerland but keep a German dwelling or habitual abode, and over former German residents for 5 years after departure (Art. 4(4) DTT), and Sec. 2 AStG imposes extended limited tax liability for 10 years on those moving to a low-tax jurisdiction. A German-to-Swiss move requires careful sequencing.

EXIT TAX (Sec. 6 AStG): emigration triggers a deemed disposal of shareholdings of 1% or more (and, since 2025, of certain fund units above EUR 500,000 / 1% — the Jahressteuergesetz 2024 extended exit taxation to investment fund units). Interest-free deferral is now available only in 7 annual instalments against security, even within the EU/EEA. Verify the current fund-unit thresholds before advising a departure.

RUERUP / BASISRENTE (Sec. 10(1)(2)(b) EStG): contributions 100% deductible up to the miners' pension ceiling — approximately EUR 29,300-30,000 single / double for couples (2025/2026, indexed). No wealth tax, no Abgeltungsteuer inside; the pension is taxed on receipt (100% taxable for those retiring from 2058, currently a rising share). Protected from insolvency and from Buergergeld means tests. Best deferral vehicle for high-earning self-employed Germans.

BETRIEBLICHE ALTERSVORSORGE (occupational pension, Sec. 3 No. 63 EStG): up to 8% of the pension contribution ceiling free of income tax (~EUR 7,700), of which 4% is also free of social security. Deferred compensation via Direktversicherung, Pensionskasse or Pensionsfonds.

FONDSPOLICE / NETTOPOLICE (unit-linked insurance wrapper) — the workhorse German deferral tool: no annual Abgeltungsteuer, no Vorabpauschale, and NO TAX ON SWITCHING BETWEEN FUNDS INSIDE THE POLICY. On maturity, if the policy has run at least 12 years AND the holder is at least 62, only HALF the gain is taxed at the personal progressive rate (Halbeinkuenfteverfahren), after a 15% partial exemption for the equity-fund component. Death benefits are income-tax-free. Costs of 0.3%-0.8%/yr on institutional "net" policies are the offset.

VERMOEGENSVERWALTENDE GmbH (asset-holding company): gains on share disposals are 95% exempt at corporate level (Sec. 8b KStG) — effective tax ~1.5% instead of 26.375%; dividends 95% exempt only if the stake is 10%+, otherwise fully taxable at ~30%. Retained earnings compound at ~1.5% effective on equity gains. Distribution to the shareholder then costs 26.375%, so this is a DEFERRAL and reinvestment vehicle, ideal for a long-horizon equity portfolio that will not be distributed.

FAMILIENSTIFTUNG (family foundation): asset protection and succession outside the 10-year gifting cycle, at the cost of a substitute inheritance tax (Erbersatzsteuer) every 30 years.

YES — but only on REAL ESTATE. The IFI (Impot sur la Fortune Immobiliere) replaced the general ISF wealth tax in 2018.

• Base: net worldwide real estate (French real estate only for non-residents), including the real-estate portion of SCPI/OPCI units and of company shares.
• Threshold: EUR 1,300,000 of net taxable real estate; once crossed, the scale applies from EUR 800,000: 0.5% (800k-1.3m), 0.7% (1.3-2.5m), 1% (2.5-5m), 1.25% (5-10m), 1.5% (above 10m).
• 30% abatement on the principal residence. Mortgage debt is deductible (with anti-abuse limits above EUR 5m).
• CAP: total income tax + social levies + IFI cannot exceed 75% of prior-year income.
• NEW RESIDENTS: a 5-year exemption for NON-FRENCH real estate for anyone who has not been French tax-resident in the preceding 5 years (Art. 750 ter / 964 CGI).

FINANCIAL ASSETS ARE ENTIRELY OUTSIDE THE IFI — a portfolio of EUR 100m in listed securities pays zero French wealth tax. This makes France structurally attractive for financial-asset wealth and structurally expensive for property wealth.

HIGH-INCOME SURCHARGES: the CEHR (contribution exceptionnelle sur les hauts revenus) adds 3% on reference income above EUR 250,000 (single) / 500,000 (couple) and 4% above EUR 500,000 / 1,000,000. The 2025 Finance Act added the CDHR, a differential contribution ensuring a 20% MINIMUM effective rate on the same high-income base — check whether it has been extended beyond 2025.

PFU / "FLAT TAX" (prelevement forfaitaire unique) = 30% on securities gains: 12.8% income tax + 17.2% social levies (CSG 9.2%, CRDS 0.5%, prelevement de solidarite 7.5%). Add CEHR of 3%-4% for high earners => top effective 34%.

NO LONG-TERM/SHORT-TERM DISTINCTION under the PFU. The duration-based abatements (50% after 2 years, 65% after 8 years; 85% under the "renforce" regime) survive ONLY for shares ACQUIRED BEFORE 1 JANUARY 2018 and only if the taxpayer ELECTS global taxation at the progressive scale (up to 45%) for ALL capital income that year. The election is annual, global and irrevocable for the year — run the arithmetic before making it. Note that under the barème the CSG is 6.8% deductible in the following year.

ASSET-CLASS RULES — genuinely different regimes:

• LISTED SECURITIES, FUNDS, ETFs, DERIVATIVES, CRYPTO: 30% PFU.
• PRECIOUS METALS (gold bars, coins): default TAXE FORFAITAIRE of 11.5% (11% + 0.5% CRDS) on the GROSS SALE PROCEEDS, not the gain. Alternatively ELECT the regime des plus-values sur biens meubles: 36.2% on the actual gain, reduced by 5% per year of ownership after the second year, so EXEMPT AFTER 22 YEARS. For long-held or heavily appreciated gold the election is usually far better; for low-margin sales the 11.5% flat is better. Documentary proof of acquisition date and price is required for the election.
• ART, ANTIQUES AND COLLECTIBLES: 6.5% flat (6% + 0.5% CRDS) on gross proceeds, or the same elective plus-value regime (36.2% with the 5%/yr taper to zero at 22 years). SALES BELOW EUR 5,000 ARE EXEMPT. Sales through a public auction may be subject to the flat tax at source.
• OTHER MOVABLES: exempt below EUR 5,000.
• REAL ESTATE: 19% + 17.2% social = 36.2%, with tapers to zero after 22 years (income tax) and 30 years (social levies), plus a surtax of up to 6% on gains above EUR 50,000.

LOSSES: capital losses on securities offset capital gains on securities in the same year, and carry forward for 10 YEARS — against capital gains only, never against other income. Losses cannot cross between the securities regime and the movable-property regime.

30% PFU (12.8% + 17.2% social levies), + CEHR => top 34%. Withheld at source as a non-final prelevement forfaitaire non liberatoire, credited on assessment. Households with reference income below EUR 25,000/50,000 may apply for exemption from the advance.

Tax-exempt regulated savings: LIVRET A (EUR 22,950 cap), LDDS (EUR 12,000), LEP (means-tested, EUR 10,000) — fully free of income tax AND social levies. Small in absolute terms but genuinely 0%.

Optional global election to the progressive scale (up to 45% + 17.2%) is available but almost never beneficial for interest.

30% PFU (12.8% + 17.2%), + CEHR => top 34%. IDENTICAL TO INTEREST — France gives no preferential rate to dividends under the flat tax. A 12.8% non-final withholding is applied at source by the French paying agent.

If the taxpayer elects the PROGRESSIVE SCALE instead, dividends benefit from a 40% ABATEMENT (only 60% is taxable) plus deduction of collection expenses, and 6.8 points of the CSG become deductible from the following year's income. For a taxpayer in the 11% or 30% bracket the election beats the PFU; at 41%/45% it does not. Because the election is GLOBAL, a client with large gains and small dividends should almost always stay on the PFU.

Foreign withholding tax is creditable against the 12.8% component only, up to the treaty rate — so foreign dividends bearing 15% WHT leave a partial credit and 17.2% social levies still apply on the gross.

DROITS DE SUCCESSION ET DE DONATION — levied on the RECIPIENT, on worldwide assets where the deceased was French-resident, and also where the HEIR has been French-resident for at least 6 of the last 10 years (Art. 750 ter CGI) — a trap for children who moved to France ahead of a foreign parent's death.

DIRECT LINE (parent to child): after a EUR 100,000 allowance PER PARENT PER CHILD, progressive 5% / 10% / 15% / 20% (EUR 15,932 - 552,324) / 30% (552,324 - 902,838) / 40% (902,838 - 1,805,677) / 45% above EUR 1,805,677.

SPOUSES AND PACS PARTNERS: fully EXEMPT from inheritance tax since 2007 (gifts between spouses: EUR 80,724 allowance then the direct-line scale).

SIBLINGS: 35% / 45% after a EUR 15,932 allowance.

NEPHEWS/NIECES: 55%. UNRELATED (including an unmarried partner not in a PACS): 60%.

GRANDCHILDREN: EUR 31,865 allowance; a further EUR 31,865 allowance applies to cash gifts (dons familiaux de sommes d'argent) from a donor under 80.

ALLOWANCES REFRESH EVERY 15 YEARS.

CENTRAL FRENCH PLANNING TOOLS:

• ASSURANCE-VIE is a parallel succession regime, largely OUTSIDE the estate: for premiums paid BEFORE AGE 70, each named beneficiary receives EUR 152,500 free of tax, then 20% up to EUR 700,000 and 31.25% above (Art. 990 I CGI). For premiums paid AFTER AGE 70, only a global EUR 30,500 allowance applies to the premiums (Art. 757 B), but ALL INVESTMENT GAIN remains exempt. Contracts are commonly split pre-70 / post-70.
• DEMEMBREMENT: gifting the bare ownership (nue-propriete) while retaining the usufruct values the gift at a statutory fraction based on the donor's age (e.g. at 61-70, bare ownership = 60% of value); the usufruct extinguishes tax-free at death.
• PACTE DUTREIL: 75% exemption of business assets subject to holding and management commitments.
• Donation-partage to fix values across children.

UNITED STATES: INCOME TAX TREATY in force (1994; Protocols 2004 and 2009) — unusual in exempting French residents' US-source income in defined cases and providing a French credit mechanism for US-source dividends; 15% portfolio dividend withholding; also contains specific provisions covering US citizens resident in France and the treatment of US pensions and social security. Article 24 provides an unusually generous credit for US-source income of French residents who are US citizens.

US-FRANCE ESTATE AND GIFT TAX TREATY in force (1978; 2004 Protocol) — situs rules, a marital deduction and pro-rated credits. One of the more important estate treaties for transatlantic families.

SWITZERLAND: INCOME TAX TREATY in force (1966, amended, most recently regarding cross-border workers and teleworking in 2022-2023).

CRITICAL: the FRANCE-SWITZERLAND INHERITANCE TAX TREATY WAS TERMINATED BY FRANCE with effect from 1 JANUARY 2015. There is now NO relief: a Swiss-resident decedent leaving assets to a French-resident heir (or leaving French-situs assets) can face both Swiss cantonal tax and French succession duty on the same assets, and France taxes the heir under Art. 750 ter after 6 of 10 years' residence. THIS IS ONE OF THE MOST IMPORTANT DOUBLE-TAXATION GAPS IN EUROPE for the Franco-Swiss client base.

ASSURANCE-VIE — the dominant French wrapper, holding over EUR 2 trillion. No tax on income, gains or fund switching INSIDE the contract; tax arises only on partial or total withdrawal, and only on the gain component of the withdrawal (pro-rated). AFTER 8 YEARS: an annual allowance of EUR 4,600 (single) / EUR 9,200 (couple) of gain is free of income tax, and the gain above it is taxed at 7.5% + 17.2% = 24.7% for the portion attributable to total premiums up to EUR 150,000, or 12.8% + 17.2% = 30% above. Before 8 years: 30%. Luxembourg-issued assurance-vie contracts give the same French treatment with far better asset choice, the "triangle of security", and portability if the client leaves France.

PEA (Plan d'Epargne en Actions): EUR 150,000 contribution cap, EU/EEA-incorporated equities and qualifying funds. After 5 YEARS, all gains and dividends are EXEMPT FROM INCOME TAX — only the 17.2% social levies apply on withdrawal. Effective rate 17.2% versus 30%. A PEA-PME adds EUR 225,000 of capacity (EUR 225,000 combined cap across both). Unlimited internal trading with no tax.

PER (Plan d'Epargne Retraite): contributions deductible from taxable income up to the greater of 10% of professional income capped at 8x the PASS (~EUR 37,000-38,000 for 2025/2026) or 10% of the PASS; unused allowances carry forward 3 years and can be pooled between spouses. Locked until retirement (with unlocking for first-home purchase). Deduction at 45% now, taxation of the capital at the progressive scale plus 30% on the gain later.

APPORT-CESSION (Art. 150-0 B ter CGI): contribute shares to a controlled holding company before a sale — the gain on the contribution is DEFERRED (report d'imposition); if the holdco sells within 3 years it must reinvest 60% of the proceeds in qualifying economic activity within 2 years to preserve the deferral; after 3 years no reinvestment condition applies. The deferral is extinguished at death. A standard pre-exit structure for French founders.

CONTRAT DE CAPITALISATION: like assurance-vie for income tax, but it does NOT extinguish at death — it is transmitted with its fiscal age intact and a step-up for succession purposes, making it the vehicle of choice for donating a wrapper to children.

YES — Italy operates a de facto financial wealth tax, under two names depending on where the assets are held.

• IMPOSTA DI BOLLO: 0.2% per year on the market value of financial instruments held with an ITALIAN intermediary (0.2% flat; capped at EUR 14,000 for non-individual holders; a separate EUR 34.20 flat charge applies to current accounts above EUR 5,000).
• IVAFE: 0.2% per year on FOREIGN-held financial assets, raised to 0.4% from 2024 for assets held in blacklisted jurisdictions. Foreign bank accounts EUR 34.20 flat.
• IVIE: 1.06% per year on FOREIGN real estate (raised from 0.76% with effect from 2024), with a credit for foreign property tax.

So an Italian resident with EUR 20m of securities pays roughly EUR 40,000 per year in wealth tax regardless of return. On a 4% gross return that is 5% of income; on a 1% return, 20%.

RC/FOREIGN-ASSET REPORTING: Quadro RW disclosure of all foreign assets is mandatory and separately penalised.

NOTE: life insurance policies are EXEMPT from the annual bollo/IVAFE charge — the levy is deferred and settled at redemption. This is a direct and quantifiable reason to use an Italian- or Irish/Luxembourg-issued policy.

26% FLAT SUBSTITUTE TAX (imposta sostitutiva) on capital gains ("redditi diversi di natura finanziaria"), with NO holding-period distinction.

• 12.5% preferential rate on gains and income from Italian government securities and from bonds issued by "white list" states and by supranationals — a genuine and material preference for sovereign debt.
• CRYPTO: 26% for 2025 (the EUR 51,645.69 threshold was abolished from 2025), RISING TO 33% FROM 1 JANUARY 2026 under the 2025 Budget Law. A step-up election to the 1 January value has been offered in successive budgets — check whether one is open.
• GOLD: 26% on the gain; if the purchase cost cannot be documented, the gain is DEEMED to be 25% of the sale price, giving an effective 6.5% of proceeds — often the better answer for inherited or undocumented metal.
• ART AND COLLECTIBLES: an occasional sale by a genuine private collector is generally NOT taxable (no specific charging provision); a "speculator" or dealer is taxed as a business. Draft legislation to tax art gains was proposed in 2024 and withdrawn — treat as a grey area and document collector intent.

THREE ELECTIVE REGIMES — the choice matters enormously:

• REGIME DICHIARATIVO (declarative): the investor self-reports annual net gains; losses are tracked personally and carried forward 4 years.
• REGIME AMMINISTRATO (administered): the Italian intermediary withholds 26% transaction by transaction and maintains a loss pool ("zainetto fiscale"); the standard default.
• REGIME GESTITO (managed): the intermediary computes the ANNUAL INCREASE IN PORTFOLIO VALUE — REALISED AND UNREALISED — and applies 26% to it. This is an annual MARK-TO-MARKET wealth-on-gains tax. It removes the loss-asymmetry problem below but destroys deferral. A discretionary mandate booked under gestito and one booked under amministrato produce materially different after-tax outcomes for the same gross return.

THE FAMOUS ITALIAN LOSS ASYMMETRY: gains on UCITS funds and ETFs are classified as "redditi di capitale" (capital income), while losses on the same funds are "redditi diversi". Capital LOSSES can only be offset against redditi DIVERSI. Consequently, a loss on an ETF CANNOT be offset against a gain on another ETF or against fund distributions — it can only be used against gains on individual shares, bonds or derivatives. This drives Italian portfolios towards direct securities and certificates and away from funds, or into wrappers. Reform to unify the categories has been contemplated under the fiscal delega — verify current status. Losses carry forward 4 years.

26% substitute tax, final. 12.5% on Italian government bonds (BTP, BOT, CCT), bonds of white-list states, and supranational issuers — the same preference as for their capital gains. Italian intermediaries withhold; foreign-source interest is self-assessed at 26% in the return (quadro RM/RW).

Interest is a "reddito di capitale" and therefore CANNOT be reduced by capital losses — a structural asymmetry: bonds bought at a discount generate taxable capital gain on redemption but coupon losses are never offsettable.

26% FLAT final withholding on both qualified and non-qualified holdings (unified in 2018). IDENTICAL TO INTEREST — no preference.

CRITICAL PRACTICAL POINT: because the 26% is a SUBSTITUTE tax, an Italian individual receiving a FOREIGN dividend gets NO FOREIGN TAX CREDIT. The 26% is applied to the dividend NET of foreign withholding tax. A US dividend of 100 suffers 15% US WHT, leaving 85, then 26% Italian tax = 22.1, for a total burden of 37.1% — not 26%. The same happens with Swiss (35%, reclaimable to 15%), French and German dividends. This makes ACCUMULATING, IRISH-DOMICILED UCITS ETFs (which suffer only fund-level WHT and distribute nothing) markedly more efficient for Italian residents than direct foreign shares — one of the clearest asset-location conclusions in this table.

Dividends are redditi di capitale, so capital losses cannot shelter them.

AMONG THE LOWEST INHERITANCE AND GIFT TAXES IN THE DEVELOPED WORLD.

• SPOUSE AND DIRECT LINE (children, parents): 4%, with a EUR 1,000,000 EXEMPTION PER BENEFICIARY.
• SIBLINGS: 6%, with a EUR 100,000 exemption per beneficiary.
• RELATIVES TO THE 4TH DEGREE, and relatives-in-law to the 3rd: 6%, no exemption.
• ALL OTHERS: 8%, no exemption.
• Beneficiaries with a serious disability: EUR 1,500,000 exemption regardless of relationship.
• Real estate additionally bears mortgage and cadastral taxes of 2% + 1% (or EUR 200 each for a first home).

A married couple with two children can therefore pass EUR 4,000,000 of financial assets entirely free of tax, and the excess at 4%.

D.Lgs. 139/2024 moved the regime to SELF-ASSESSMENT from 2025 and codified the treatment of trusts: tax is due on distribution to beneficiaries, with an option to pay upfront on funding at the rates applicable to the relationship between settlor and beneficiary.

LIFE INSURANCE death benefits are EXEMPT from inheritance tax and from IRPEF on the demographic/risk component — a further reason for the Italian wrapper.

PIR holdings held 5 years are exempt from inheritance tax entirely.

SCOPE: worldwide assets if the deceased was Italian-resident; Italian-situs assets only if not. Neo-domiciled regime electors (below) are exempt from Italian inheritance and gift tax ON FOREIGN ASSETS — a large and often decisive benefit.

UNITED STATES: INCOME TAX TREATY in force (signed 1999, entered into force 2009/2010; 15% portfolio dividends, 5% for 25%+ corporate holders, 10% interest with exemptions).

US-ITALY ESTATE TAX TREATY in force (1955) — one of the older US estate treaties; situs-based relief. There is no US-Italy GIFT tax treaty.

SWITZERLAND: INCOME TAX TREATY in force (1976), supplemented by the 2020 Agreement on the Taxation of Frontier Workers (in force 17 July 2023) and the 2023-2025 protocols on teleworking. Italy removed Switzerland from its blacklist of privileged-tax states for individuals with effect from 2024 — significant, because Italian residents moving to Switzerland were previously presumed still resident under Art. 2(2-bis) TUIR with the burden of proof reversed. NO ITALY-SWITZERLAND INHERITANCE TAX TREATY.

Italy's inheritance tax treaty network is very small (US, UK, Denmark, France, Greece, Israel, Sweden) — but with a 4% direct-line rate, double taxation is rarely the binding problem.

NEO-DOMICILED / "RES NON-DOM" REGIME (Art. 24-bis TUIR) — SPECIAL REGIME, the most important Italian planning fact for internationally mobile wealth. An individual who has not been Italian tax-resident for at least 9 of the previous 10 years may elect a SUBSTITUTE TAX OF EUR 200,000 PER YEAR (raised from EUR 100,000 for elections made on or after 10 August 2024) covering ALL FOREIGN-SOURCE INCOME AND CAPITAL GAINS, for up to 15 years. EUR 25,000 per additional family member. Electors are exempt from IVIE and IVAFE and from Italian inheritance and gift tax on FOREIGN assets. Exclusion: gains on qualified foreign shareholdings realised in the first 5 years are taxed normally. Italian-source income is taxed normally. Combine with the flat tax on a Swiss/Monaco-style cost base and Italy becomes highly competitive for a EUR 50m+ portfolio.

RETIREE REGIME (Art. 24-ter TUIR): 7% flat tax on ALL foreign-source income (not just pensions) for individuals with a foreign pension who move to a municipality of under 20,000 inhabitants in Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia or Sicily. 10 years.

IMPATRIATE REGIME (Art. 5 D.Lgs. 209/2023): 50% exemption of employment and self-employment income up to EUR 600,000 for 5 years (60% with a minor child), subject to residence and qualification conditions.

PIR (Piano Individuale di Risparmio): EUR 40,000 per year and EUR 200,000 lifetime, invested per statutory quotas in Italian and EU issuers with an Italian PE. Held 5 years, ALL income and gains are FREE OF THE 26% TAX and the holding is exempt from inheritance tax. PIR ALTERNATIVI: EUR 300,000/yr, EUR 1,500,000 lifetime, for illiquid/alternative assets.

POLIZZE VITA (Ramo I and Ramo III unit-linked insurance): full GROSS ROLL-UP — no annual 26% on realised gains inside the policy, no annual imposta di bollo (deferred to redemption), gains and losses fully net inside the wrapper (solving the ETF loss asymmetry), death benefits exempt from inheritance tax. The dominant Italian solution for a large managed portfolio.

FONDI PENSIONE: contributions deductible up to EUR 5,164.57/yr; investment returns taxed at 20% (12.5% on government bonds) instead of 26%; benefits taxed at 15%, falling by 0.30 points for each year of participation beyond 15 up to a MINIMUM OF 9%. A triple advantage: deduction, reduced internal rate, and a 9%-15% exit rate.

YES — SPAIN IS ONE OF ONLY TWO EU STATES WITH A FULL NET WEALTH TAX (with Norway outside the EU). Two overlapping levies:

• IMPUESTO SOBRE EL PATRIMONIO (state scale, ceded to the Autonomous Communities): 0.2% to 3.5% on net worldwide wealth above a EUR 700,000 personal allowance, plus a EUR 300,000 exemption for the principal residence. The Communities set their own rates and allowances:
• MADRID: 100% rebate (no wealth tax) — but see the solidarity tax below.
• ANDALUCIA: 100% rebate.
• CATALONIA: 0.21%-2.75%, allowance EUR 500,000.
• VALENCIA: 0.25%-3.5%, allowance EUR 500,000.
• BALEARICS: 0.28%-3.45%. MURCIA, GALICIA, ARAGON, EXTREMADURA: various partial rebates.
• IMPUESTO TEMPORAL DE SOLIDARIDAD DE LAS GRANDES FORTUNAS ("solidarity tax", ITSGF): 1.7% (EUR 3m-5.35m), 2.1% (5.35m-10.7m), 3.5% (above EUR 10.7m), on net wealth above EUR 3,000,000 (effectively EUR 3.7m with the state allowance). Made INDEFINITE from 2024. Critically, it credits the regional wealth tax paid — its explicit purpose is to CLAW BACK the Madrid and Andalucia rebates. A Madrid resident therefore pays the solidarity tax instead of nothing.

JOINT CAP ("limite conjunto"): combined personal income tax + wealth tax + solidarity tax may not exceed 60% OF TAXABLE INCOME, but the wealth tax cannot be reduced by more than 80% (i.e. at least 20% of the wealth tax quota is always due). This cap is the single most important Spanish planning mechanism: SUPPRESSING REALISED INCOME SUPPRESSES THE WEALTH TAX. A portfolio of accumulating funds generating no distributions and no realisations produces little taxable income and therefore triggers the 60% cap, cutting the wealth tax by up to 80%.

BUSINESS ASSETS EXEMPTION: shares in a family company can be exempt from wealth tax if the holder owns 5% (or 20% with family), performs management functions and derives more than 50% of income from them — the classic Spanish holding structure.

NON-RESIDENTS pay wealth tax on Spanish-situs assets only (including, since 2023, shares in non-Spanish companies whose assets are more than 50% Spanish real estate).

"RENTA DEL AHORRO" (savings income) SCALE, applied to the aggregate of capital gains, interest and dividends:

19% on the first EUR 6,000

21% on EUR 6,000 - 50,000

23% on EUR 50,000 - 200,000

27% on EUR 200,000 - 300,000

30% above EUR 300,000 (raised from 28% with effect from 1 January 2025)

Note the Basque Country and Navarre operate their own foral systems with different (generally slightly different) savings scales.

NO LONG-TERM/SHORT-TERM DISTINCTION and no indexation (abolished 2015). All asset classes — shares, funds, bonds, derivatives, gold, art, crypto, real estate — use the same savings scale.

LOSSES: capital losses first offset capital gains of the year; a net loss may then be used against up to 25% of the positive balance of "rendimientos del capital mobiliario" (interest and dividends), and symmetrically. Excess carries forward 4 YEARS. FIFO IS MANDATORY for identical securities (no specific identification), which materially constrains lot-level harvesting.

ANTI-WASH RULE: a loss is disallowed if identical LISTED securities are repurchased within 2 MONTHS before or after (1 YEAR for unlisted). The loss is not lost but deferred until the replacement is sold.

TRASPASO — THE DEFINING SPANISH FEATURE: transfers between Spanish-registered collective investment institutions (Spanish funds and CNMV-registered foreign UCITS held through a Spanish platform, with more than 500 shareholders) are a TAX-FREE ROLLOVER. The investor may switch between funds, managers, asset classes and currencies indefinitely, with basis carried over and NO tax event. Combined with the step-up at death (below), a Spanish investor can rebalance for life and never pay capital gains tax. This does NOT apply to ETFs or to individual shares.

EXIT TAX (Art. 95 bis LIRPF): individuals resident in Spain for 10 of the last 15 years who cease residence are deemed to dispose of shareholdings worth more than EUR 4,000,000 (or more than EUR 1,000,000 if a 25%+ stake). Deferral available for EU/EEA moves and for temporary postings.

Same savings scale, 19% to 30%. Interest, dividends and capital gains are all taxed identically — Spain has a fully integrated savings box with no preference of any kind.

Withholding of 19% at source by Spanish payers, credited on assessment. Foreign interest self-declared. Modelo 720 / 721 reporting of foreign assets and crypto is mandatory (penalties were reformed after the 2022 ECJ ruling but the filing obligation stands).

Same savings scale, 19% to 30%. NO preferential rate versus interest, and no dividend exemption (the former EUR 1,500 exemption was abolished in 2015).

19% Spanish withholding at source. Foreign withholding tax is creditable up to the treaty rate against the Spanish liability.

BECAUSE DIVIDENDS AND INTEREST ARE TAXED IDENTICALLY TO GAINS, BUT ONLY GAINS CAN BE DEFERRED (via traspaso) AND ONLY GAINS ARE FORGIVEN AT DEATH, SPANISH PORTFOLIOS SHOULD BE BUILT FOR ACCUMULATION, NOT DISTRIBUTION. Accumulating funds also suppress taxable income, which triggers the 60% wealth-tax cap. This is a double benefit unique to Spain.

IMPUESTO SOBRE SUCESIONES Y DONACIONES (ISD) — levied on the RECIPIENT, and the most regionally variable tax in Europe.

STATE SCALE: 7.65% to 34% progressive, then MULTIPLIED by a coefficient for the beneficiary's relationship and pre-existing wealth — up to 2.4x for distant relatives, giving a theoretical maximum of 81.6%.

GROUPS: I (descendants under 21), II (descendants 21+, spouse, ascendants), III (siblings, nieces/nephews, in-laws), IV (unrelated).

REGIONAL REBATES ARE DECISIVE:

• MADRID: 99% rebate for Groups I and II; 25%/15% for siblings and other relatives. Effective rate on a child's inheritance: about 0.3%.
• ANDALUCIA: EUR 1,000,000 allowance per Group I/II heir, then a 99% rebate.
• VALENCIA: 99% rebate for Groups I and II (from 2023).
• MURCIA, CANTABRIA, CASTILLA Y LEON, EXTREMADURA, CANARIES, BALEARICS: 99% or near-total rebates for direct line.
• CATALONIA: a partial regime — allowances of EUR 100,000-275,000 plus a tapering rebate; effective rates in the low single digits to ~9% for large estates.
• ASTURIAS, CASTILLA-LA MANCHA: less generous.

NON-RESIDENTS may elect the rules of the relevant Autonomous Community (following the 2014 ECJ ruling, extended to non-EU residents by Law 11/2021 and Supreme Court case law) — so a US or Swiss heir of a Madrid decedent gets the Madrid 99% rebate.

GIFTS: same tax, generally with fewer rebates and, importantly, A LIFETIME GIFT ALSO TRIGGERS CAPITAL GAINS TAX FOR THE DONOR at 19%-30% on the appreciation. Gifts are therefore usually far worse than bequests in Spain.

"PLUSVALIA DEL MUERTO": there is NO deemed disposal at death and heirs take a STEP-UP TO MARKET VALUE. All unrealised gain is extinguished. This, plus the traspaso rollover, plus the 99% regional rebates, means a Madrid resident can compound and rebalance a portfolio for a lifetime and pass it to children with essentially no capital gains tax and ~0.3% inheritance tax. It is one of the most favourable succession outcomes in Europe — provided the client lives in the right Community.

UNITED STATES: INCOME TAX TREATY in force (1990; the 2013 PROTOCOL finally entered into force on 27 November 2019, cutting withholding to 0% on most interest, royalties and on dividends to 80%+ corporate holders, 5%/15% otherwise, and adding mandatory arbitration). A major improvement for US-Spain flows.

NO US-SPAIN ESTATE OR GIFT TAX TREATY. Double taxation relief depends on Spain's unilateral foreign tax credit and on the US foreign death tax credit — imperfect. A Spanish resident holding US-situs shares faces US estate tax at 40% over a $60,000 exemption with only a unilateral Spanish credit.

SWITZERLAND: INCOME TAX TREATY in force (1966, substantially amended by the 2011 Protocol effective 2013 — 0% dividend withholding for 10%+ holdings and for pension funds, 0% interest). NO SPAIN-SWITZERLAND INHERITANCE TAX TREATY. Spain has inheritance tax treaties with only France, Greece and Sweden.

FUND TRASPASO (the primary tool — see Capital Gains): unlimited, indefinite deferral of capital gains on switches between Spanish-registered collective investment vehicles, extinguished entirely by the step-up at death.

BECKHAM LAW / IMPATRIATE REGIME (Art. 93 LIRPF) — SPECIAL REGIME. An individual moving to Spain who has not been resident in the previous 5 YEARS (reduced from 10 by Law 28/2022) may elect to be taxed as a NON-RESIDENT for the year of arrival plus 5 years:

• Spanish employment income at 24% flat up to EUR 600,000, 47% above.
• FOREIGN-SOURCE INVESTMENT INCOME AND CAPITAL GAINS ARE NOT TAXED IN SPAIN AT ALL. Only Spanish-source savings income is taxed, on the savings scale.
• WEALTH TAX applies only to SPANISH-SITUS assets — a foreign portfolio is entirely outside both the wealth tax and the solidarity tax.
• No Modelo 720 foreign asset reporting.

Extended in 2023 to digital nomads, company directors (with a 25% shareholding limit lifted), qualifying entrepreneurs and innovators, and — importantly — to the SPOUSE AND CHILDREN UNDER 25.

For an internationally mobile investor with a large offshore portfolio, six years of Beckham status in Madrid is close to a zero-tax outcome on investment income and wealth.

UNIT-LINKED INSURANCE ("seguros unit linked"): tax deferral inside the policy is respected only if the policyholder CANNOT choose the specific underlying assets (Art. 14.2.h LIRPF) — the policy must offer a defined menu of collective vehicles or a discretionary mandate outside the holder's control. Correctly structured, gains roll up untaxed until surrender.

RENTA VITALICIA FOR OVER-65s (Art. 38.3 LIRPF): an individual aged 65 or over who sells ANY asset and reinvests the proceeds within 6 months into a qualifying LIFE ANNUITY, up to EUR 240,000, has the ENTIRE CAPITAL GAIN EXEMPTED. A EUR 240,000 reinvestment can shelter an unlimited gain. Combined with the over-65 exemption on the sale of a principal residence, this is one of the most generous provisions in Spanish law.

PENSION PLANS: individual contribution limit cut to just EUR 1,500/yr (plus up to EUR 8,500 of employer contributions and EUR 4,250 for the self-employed via a "plan de empleo simplificado"). Deduction at up to 47%; benefits taxed as EARNED income (not savings income) at up to 47% — so pension plans are now a poor vehicle for high earners in Spain unless the employer route is used.

YES — effectively the most significant wealth tax in this table, delivered through BOX 3 ("savings and investments"). The Netherlands does not tax actual investment income or gains at all; it taxes a DEEMED RETURN on net assets.

MECHANICS (2025 figures): net Box 3 assets are split into three categories, each assigned a statutory deemed return, and the total is taxed at 36%:

• Bank and savings balances: ~1.44% deemed (set retrospectively to the actual average savings rate)
• "Other assets" (shares, bonds, funds, crypto, second homes, receivables): 5.88% deemed
• Debts: deducted at ~2.62%

Tax-free allowance: EUR 57,684 per person (EUR 115,368 for partners).

EFFECTIVE RATE ON A SECURITIES PORTFOLIO: 5.88% x 36% = 2.12% OF ASSET VALUE PER YEAR, regardless of whether the portfolio made or lost money.

THE 2026 POSITION: the Belastingplan 2026 lowers the tax-free allowance (to roughly EUR 51,400) and raises the deemed return on "other assets" — VERIFY THE ENACTED 2026 FIGURES, as they moved repeatedly through the 2025 parliamentary process.

COUNTERPROOF ("tegenbewijsregeling"): following the Supreme Court's rulings of 6 June 2024, a taxpayer whose ACTUAL return was lower than the deemed return may elect to be taxed on the actual return instead, via the Opgaaf Werkelijk Rendement. "Actual return" for this purpose INCLUDES UNREALISED GAINS AND LOSSES, includes no deduction for costs other than interest, and is computed across the whole Box 3 portfolio. Critically, THE ELECTION IS ALL-OR-NOTHING AND ANNUAL, so it should be evaluated every year — in a down year it can reduce the Box 3 charge to zero.

FUTURE: the WET WERKELIJK RENDEMENT BOX 3 is scheduled to replace the deemed system in 2028 (deferred from 2027). It will tax ACTUAL income plus ANNUAL MARK-TO-MARKET on securities (a "vermogensaanwasbelasting"), with real estate on a realisation basis. Portfolios should be built with this transition in mind.

BOX 3 IS MEASURED AT A SINGLE DATE — 1 JANUARY (peildatum). Assets spent, gifted or converted before 31 December do not appear in the base at all. Anti-abuse rules catch round-trips of under 3 months.

NO CAPITAL GAINS TAX FOR PORTFOLIO INVESTORS IN BOX 3. Gains and losses on shares, bonds, funds, ETFs, derivatives, gold, art and crypto are simply irrelevant — the Box 3 deemed-return charge substitutes for all of them. There is no realisation event, no holding-period rule, no loss carryforward and no wash-sale rule. TURNOVER IS FREE.

BOX 2 (substantial interest, a holding of 5% or more of a company): both dividends and capital gains are taxed at 24.5% on the first ~EUR 67,800 and 31% above (2025). This is the regime for founders and for anyone using a personal holding BV.

BOX 1: gains are taxed at progressive rates up to 49.5% where the activity amounts to a business or to "more than normal asset management" — the Dutch analogue of the Swiss professional-dealer risk, though in practice applied more narrowly (day-trading with leverage and specialised knowledge, or property development).

CONSEQUENCE FOR MANAGEMENT: because gains are untaxed and turnover costs nothing, Dutch portfolios can be rebalanced, harvested and restructured with complete freedom. There is no tax reason to hold a losing position or to defer a sale. The ONLY tax variable is the 1 January asset value.

NOT TAXED AS SUCH in Box 3 — the deemed return replaces actual interest. Cash and deposits carry a much lower deemed return (~1.44%) than "other assets" (5.88%), so holding cash on 1 January is dramatically cheaper than holding securities: EUR 1,000,000 in a savings account costs ~EUR 5,200 of Box 3 tax; the same EUR 1,000,000 in a bond fund costs ~EUR 21,200.

IMPORTANT NUANCE: BONDS AND BOND FUNDS ARE CLASSIFIED AS "OTHER ASSETS", NOT AS SAVINGS. A Dutch investor holding a 3% government bond pays 2.12% of value in Box 3 tax against a 3% coupon — an effective 70% tax rate on the income. FIXED INCOME IS EXTRAORDINARILY TAX-INEFFICIENT IN THE NETHERLANDS, and the lower the yield, the worse it gets. Cash deposits, by contrast, are taxed at close to their actual rate.

Debts (including mortgages on a second home) are deductible from the Box 3 base at the debt deemed rate, with a EUR 3,800 threshold.

NOT TAXED AS INCOME in Box 3. Dutch dividend withholding tax of 15% is fully CREDITABLE against, and refundable beyond, the Box 3 liability.

THE CRITICAL ASYMMETRY — FOREIGN WITHHOLDING TAX: foreign dividend withholding (15% US, 26.375% German, 25% French/Swiss before reclaim) is creditable ONLY UP TO THE TREATY RATE AND ONLY AGAINST THE BOX 3 TAX ACTUALLY DUE. Because Box 3 tax is computed on assets rather than income, a high-dividend foreign portfolio can easily generate more foreign WHT than Box 3 tax, and the excess is a PERMANENT DEAD-WEIGHT LOSS. A EUR 1,000,000 portfolio of US shares yielding 2% suffers EUR 3,000 of US WHT against ~EUR 21,200 of Box 3 tax, so it is absorbed — but a 5%-yielding portfolio and a partial-year holding can exceed the credit.

THE DOMINANT DUTCH CONCLUSION: since income is untaxed but assets are taxed, and foreign WHT is a leak, Dutch investors should hold ACCUMULATING, LOW-DISTRIBUTION funds — ideally IRISH-DOMICILED UCITS ETFs, which suffer only 15% US WHT at fund level (versus 30% for a Luxembourg fund) and distribute nothing. Dutch investors are indifferent between income and growth for domestic purposes but strictly prefer growth because of withholding leakage.

ERFBELASTING (inheritance) and SCHENKBELASTING (gift) — levied on the RECIPIENT, on worldwide assets where the deceased/donor was Dutch-resident. Rates (2025):

• PARTNER AND CHILDREN: 10% on the first EUR 154,197, 20% above.
• GRANDCHILDREN AND FURTHER DESCENDANTS: 18% / 36%.
• ALL OTHERS: 30% / 40%.

EXEMPTIONS: partner EUR 804,698 (reduced by the actuarial value of pension entitlements); children EUR 25,490; parents EUR 60,399; others EUR 2,690. Disabled children EUR 76,508.

GIFT EXEMPTIONS: EUR 6,713/yr to a child, EUR 2,690/yr to anyone else; a one-off EUR 32,195 for a child aged 18-40 (or EUR 67,064 if used for a qualifying study).

10-YEAR TRAILING RULE: a DUTCH NATIONAL who emigrates remains within scope of Dutch inheritance and gift tax for 10 YEARS after departure. Non-nationals are caught for 1 year for gift tax only. This is a decisive fact for Dutch nationals moving to Switzerland or elsewhere — the clock must run out before wealth transfers.

BEDRIJFSOPVOLGINGSREGELING (BOR): business assets are effectively 100% exempt up to ~EUR 1.5m and 75% above (reduced from 83% in 2025), subject to holding and continuation periods. Passive investment assets are excluded.

There is no capital gains charge at death (there is no capital gains tax in Box 3 to begin with); Box 2 shareholdings are subject to a deemed disposal at death unless rolled over to the heirs.

UNITED STATES: INCOME TAX TREATY in force (1992; 2004 Protocol — 0% withholding on dividends to 80%+ corporate holders and to exempt pension funds, 5%/15% otherwise, 0% interest, mandatory arbitration).

US-NETHERLANDS ESTATE AND INHERITANCE TAX TREATY in force (1969) — situs rules and credit relief.

SWITZERLAND: INCOME TAX TREATY in force (2010, replacing the 1951 treaty; 0% dividends for 10%+ holders and pension funds, 15% portfolio, 0% interest). NETHERLANDS-SWITZERLAND INHERITANCE TAX TREATY in force (1951) — one of only a handful of Swiss inheritance treaties. The Netherlands also has estate/inheritance treaties with Austria, Finland, Israel, Sweden, the UK and the US.

30% RULING: expatriate employees may receive 30% of salary tax-free (tiered 30%/20%/10% for arrivals from 2024, but reverting to a FLAT 27% from 2027 under the Belastingplan 2025, with transitional protection for earlier arrivals). CRUCIALLY, the "partial non-resident taxpayer status" that exempted 30%-rulers from Box 2 and BOX 3 ENTIRELY WAS ABOLISHED FROM 1 JANUARY 2025, with transitional relief only for those who held the ruling before 2024, running out at the end of 2026. From 2027 every Dutch resident, expatriate or not, pays Box 3 on their worldwide portfolio.

PENSION AND LIJFRENTE (annuity) — the single most valuable Dutch strategy, because pension assets sit OUTSIDE BOX 3 ENTIRELY. Contributing does three things at once: it deducts against Box 1 income at up to 49.5%, it removes the assets from the ~2.12% annual Box 3 charge, and it allows tax-free internal compounding.

• JAARRUIMTE: 30% of the pension base (income less the AOW franchise), capped at roughly EUR 36,000 (2025), following the Wet toekomst pensioenen which sharply increased the limits.
• RESERVERINGSRUIMTE: unused room from the previous 10 YEARS may be caught up, up to roughly EUR 42,000 per year — a large one-off opportunity for anyone who has not been contributing.
• Benefits taxed as Box 1 income on receipt, typically at 19.07% (the first bracket for those over state pension age) rather than 49.5%.

SPAAR-BV / HOLDING COMPANY (Box 2 arbitrage): moving a portfolio into a BV converts a 2.12% ASSET-BASED charge into 25.8% corporate income tax on ACTUAL profits plus 24.5%/31% Box 2 tax on distribution. The BV wins whenever the actual return is materially below the 5.88% deemed return — for example a low-yielding bond portfolio, cash, or an underperforming book. The breakeven is roughly a 3.5%-4.5% actual return. The counterproof regime has reduced but not eliminated the case for this; the 2028 actual-return system will largely close it.

PEILDATUM MANAGEMENT: because Box 3 is measured only on 1 JANUARY, prepaying tax liabilities, making gifts, paying down debt, funding a pension, or buying a Box 1 asset (owner-occupied home improvements) BEFORE 31 DECEMBER permanently removes value from the base. Converting securities into a savings deposit before year-end is expressly counter-attacked by anti-arbitrage rules (a 3-month round-trip test), but genuine changes are effective.

GREEN INVESTMENTS ("groen beleggen"): a Box 3 exemption of ~EUR 26,300 per person (2025) plus a 0.7% tax credit for certified green funds — the exemption is being phased down towards abolition in 2027; verify.

NO net wealth tax. Real property tax is levied by municipalities on area rather than value (very low for residential — a few zloty per square metre per year). No securities transaction tax; a 1% civil law transaction tax (PCC) applies to private share sales but not to exchange-traded transactions.

Poland has repeatedly debated but never enacted a wealth tax.

19% FLAT ("Belka tax", podatek od zyskow kapitalowych) on capital gains from securities, derivatives and fund units. NO long-term/short-term distinction and no indexation.

MECHANICS: gains and losses from securities and derivatives are NETTED annually and declared on form PIT-38. Brokers issue a PIT-8C. Losses carry forward FIVE YEARS, with an annual limit of 50% of the loss per year — OR the taxpayer may deduct up to PLN 5,000,000 of a single year's loss in one year, with the remainder subject to the 50% rule.

SEPARATE BASKETS (a significant constraint): capital gains on securities (PIT-38) are a DIFFERENT source from crypto (PIT-38 separate section, 19%, losses only within crypto) and from interest and dividends (see below). Losses on shares CANNOT be offset against interest or dividend income — those are subject to a flat final withholding with no loss relief whatsoever.

INVESTMENT FUNDS: gains on Polish investment fund units are subject to 19% withholding at redemption by the fund, with NO loss offset — a real disadvantage versus directly-held securities, where netting is available. Foreign fund units are self-assessed on PIT-38 and CAN be netted. This makes foreign-domiciled UCITS ETFs materially better than domestic funds for Polish investors.

OTHER ASSETS: gains on the sale of MOVABLE PROPERTY — including GOLD, ART, JEWELLERY, CARS and collectibles — are TAX-FREE IF SOLD MORE THAN 6 MONTHS after acquisition (Art. 10(1)(8)(d) PIT Act). Within 6 months, taxed at the progressive scale (12%/32%). Real estate: tax-free after 5 calendar years from the end of the year of acquisition, or if proceeds are reinvested in housing within 3 years.

19% FLAT FINAL WITHHOLDING (Belka tax) on bank deposit interest, bond coupons and similar. Deducted at source by the payer; not reported on the annual return; NO deduction of costs and NO LOSS OFFSET of any kind.

The asymmetry is important: an investor who loses PLN 100,000 on shares and earns PLN 100,000 of bond interest in the same year pays PLN 19,000 of tax and carries the loss forward, rather than netting to zero.

Treasury retail bonds (obligacje detaliczne) are taxed identically at 19%.

19% FLAT FINAL WITHHOLDING. Same rate as interest and as capital gains — Poland's investment tax system is a uniform 19% with no preferences of any kind.

Foreign dividends: the Polish resident self-assesses 19% and credits foreign withholding tax up to the treaty rate (the credit is limited to the Polish tax on that income). A US dividend suffers 15% US WHT and 4% additional Polish tax. Poland's treaty network is broad, so credits are usually available.

Because dividends and interest bear a final withholding with no loss relief, while capital gains are netted, POLISH PORTFOLIOS ARE BETTER BUILT ON ACCUMULATION THAN DISTRIBUTION — accumulating ETFs convert what would be a non-offsettable dividend into a nettable capital gain.

PODATEK OD SPADKOW I DAROWIZN — levied on the recipient.

GROUP 0 (spouse, children, grandchildren, parents, grandparents, stepchildren, siblings, stepparents): COMPLETELY EXEMPT, provided the acquisition is REPORTED TO THE TAX OFFICE ON FORM SD-Z2 WITHIN 6 MONTHS (and, for cash gifts above the threshold, received by bank transfer). Missing the 6-month deadline forfeits the exemption entirely and drops the transfer into Group I — the single most common and most expensive administrative error in Polish estate planning.

GROUP I (Group 0 plus in-laws): 3% / 5% / 7% above a PLN 36,120 allowance.

GROUP II (nephews, nieces, cousins, in-laws of siblings): 7% / 9% / 12% above PLN 27,090.

GROUP III (unrelated): 12% / 16% / 20% above PLN 5,733.

Allowances refresh on a rolling 5-year cumulation from the same donor.

No capital gains charge at death; heirs take the deceased's acquisition cost for securities (no step-up), but inherited real estate is exempt from the 5-year rule.

UNITED STATES: the 1974 US-POLAND INCOME TAX TREATY REMAINS IN FORCE. A modern replacement was signed in 2013 but HAS NEVER BEEN RATIFIED BY THE US SENATE. The 1974 treaty is dated: 15% dividend withholding, 0% interest, and it lacks a limitation-on-benefits article and modern arbitration. Practically it works, but planning should not assume the 2013 terms.

NO US-POLAND ESTATE OR GIFT TAX TREATY.

SWITZERLAND: INCOME TAX TREATY in force (1991, Protocol 2010 — 15% portfolio dividends, 0% for 10%+ holders held 2 years, 5% interest with exemptions). NO POLAND-SWITZERLAND INHERITANCE TAX TREATY.

IKE (Indywidualne Konto Emerytalne): annual contribution limit of 3x the projected average monthly wage — PLN 26,019 for 2025 (indexed annually). No deduction on the way in, but ALL INVESTMENT INCOME AND GAINS ARE EXEMPT FROM THE 19% BELKA TAX if withdrawn after age 60 (or 55 with earlier pension rights) and after contributions in at least 5 calendar years. Full freedom to trade inside. This is Poland's Roth IRA and is unambiguously the first vehicle to fill.

IKZE (Indywidualne Konto Zabezpieczenia Emerytalnego): PLN 10,407.60 for 2025 (PLN 15,611.40 for the self-employed), DEDUCTIBLE from taxable income at 12% or 32% (or 19% for flat-tax entrepreneurs). Withdrawal after age 65 and 5 years of contributions is taxed at a FLAT 10% — with no Belka tax on the accumulated gains. The deduct-at-32%/withdraw-at-10% arbitrage is 22 points of permanent saving on every contribution.

PPK (Pracownicze Plany Kapitalowe): auto-enrolment workplace scheme, 2% employee + 1.5% employer minimum (up to 4% + 4%), with state top-ups; exempt from Belka tax if drawn under the scheme rules at 60.

PPE / OIPE (the pan-European PEPP, available in Poland since 2023): additional capacity with similar Belka exemption.

LUMP-SUM TAX ON FOREIGN INCOME FOR NEW RESIDENTS ("ryczalt od przychodow zagranicznych", Art. 30c-30j PIT Act) — SPECIAL REGIME introduced in 2022. An individual who transfers tax residence to Poland and has not been Polish tax-resident in 5 of the previous 6 years may elect a FLAT PLN 200,000 PER YEAR covering ALL FOREIGN-SOURCE INCOME, for up to 10 years. Condition: an investment of at least PLN 100,000 per year in Polish economic activity, real estate, science, culture, sport or heritage. Family members may join for an additional PLN 100,000 each. For an investor with more than ~PLN 1.05m (~EUR 250,000) of foreign investment income, this is cheaper than the 19% flat tax — and Poland's living costs and EU membership make it a credible alternative to the Italian and Greek regimes at a lower headline price.

ESTONIAN CIT ("ryczalt od dochodow spolek"): a Polish company pays NO corporate income tax until profits are distributed — a genuine deferral vehicle for a corporate-held investment portfolio, though passive-income companies are largely excluded.

NO general net wealth tax, but two asset-based charges that behave like one:

• ANNUAL TAX ON SECURITIES ACCOUNTS (TACT / taxe annuelle sur les comptes-titres): 0.15% PER YEAR on securities accounts with an average value ABOVE EUR 1,000,000, levied per account (Belgian accounts withheld by the bank; foreign accounts self-declared). Anti-abuse rules attack the splitting of accounts and the conversion of securities into registered form. Registered (nominative) shares held directly on a company's register are outside the base — a legitimate and widely used exclusion, as are most insurance wrappers.
• STOCK EXCHANGE TAX (TOB / taxe sur les operations de bourse): a TRANSACTION tax on every purchase AND sale by a Belgian resident, wherever executed:
• 0.12% on bonds (cap EUR 1,300 per transaction)
• 0.35% on shares (cap EUR 1,600)
• 1.32% on ACCUMULATING funds registered in Belgium and on certain fund share classes (cap EUR 4,000)
• 0.12% on distributing funds

Round-trip cost on an accumulating fund can therefore reach 2.64%. THIS IS A SERIOUS CONSTRAINT ON PORTFOLIO TURNOVER and is the strongest argument in Europe for buy-and-hold or for an insurance wrapper (which is outside the TOB).

Real estate is taxed on a notional "cadastral income" that is far below market value, indexed annually.

MAJOR CHANGE — READ CAREFULLY. Historically Belgium had NO capital gains tax on financial assets for private individuals managing their own wealth as a "bon pere de famille" (normal management of private assets). That ended with the Arizona coalition's programme.

FROM 1 JANUARY 2026: a "SOLIDARITY CONTRIBUTION" of 10% applies to realised capital gains on FINANCIAL ASSETS (shares, bonds, funds, ETFs, derivatives, crypto).

• An annual exemption of EUR 10,000 per person (indexed), which rolls up to a maximum of about EUR 15,000 if unused for five consecutive years.
• A STEP-UP: only gains accruing AFTER 31 DECEMBER 2025 are taxed; the 31 December 2025 value becomes the base cost. DOCUMENTING 31 DECEMBER 2025 VALUATIONS IS THE SINGLE MOST IMPORTANT ACTION ITEM FOR BELGIAN CLIENTS.
• SUBSTANTIAL HOLDINGS (20% or more of a company): the first EUR 1,000,000 of gain is exempt, then a progressive scale of 1.25% / 2.5% / 5% / 10%.
• LOSSES: deductible against gains within the SAME category IN THE SAME YEAR ONLY — NO CARRYFORWARD. This makes year-end loss realisation important and makes a large loss in a bad year simply wasted.
• Withheld by Belgian intermediaries where possible; otherwise self-declared.

The detail was still being finalised through 2025 — CONFIRM THE ENACTED TEXT AND ANY TRANSITIONAL RULES BEFORE ADVISING.

PRE-EXISTING CHARGES THAT REMAIN:

• "REYNDERS TAX" (TIS / taxe sur les interets dans les OPC): 30% on the INTEREST COMPONENT of gains realised on units of funds that invest MORE THAN 10% in debt claims. Applies on redemption or sale. This has long meant that bond funds are taxed on their gain, not just their income, and it survives independently of the new 10% regime.
• SPECULATIVE GAINS OUTSIDE NORMAL MANAGEMENT: taxed as miscellaneous income at 33% (plus municipal surcharge). The 2026 regime does not remove this — genuinely speculative activity is still taxed at 33%, not 10%.
• Real estate sold within 5 years: 16.5%.
• Gold, art and other movables held as private assets: gains remain outside the scope where the disposal is normal management of private wealth — but confirm against the enacted 2026 text.

30% FLAT WITHHOLDING (precompte mobilier / roerende voorheffing), final. Applies to bond coupons, deposit interest above the exempt tranche, and the Reynders component of bond funds.

REGULATED SAVINGS ACCOUNTS: the first EUR 1,020 of interest (2025, indexed) is exempt; the excess is taxed at 15% rather than 30%.

Belgian state notes (bons d'Etat) have occasionally been issued with a reduced 15% rate as a policy measure — check current issues.

Foreign interest received without Belgian withholding must be declared and is taxed at 30%; foreign withholding tax is NOT credited against the Belgian 30% for individuals in most cases (the "quotite forfaitaire d'impot etranger" is generally unavailable for private investors) — so foreign-source interest can suffer real double taxation.

30% FLAT WITHHOLDING, final. IDENTICAL TO INTEREST — no preference.

• VVPRbis: dividends from small companies meeting conditions can qualify for 15%.
• INDIVIDUAL EXEMPTION: the first EUR 859 (2025 income) of dividends per person is effectively exempt — but ONLY by claiming it back on the annual return, since the withholding is applied anyway. Worth ~EUR 258 per person per year, and it is routinely forgotten. Both spouses can claim.
• Liquidation reserves distributed after the holding period: 5% or 6.5%.

Foreign dividends: 30% Belgian tax applies to the amount NET of foreign withholding, with no credit for individuals — a French dividend can suffer 12.8% French plus 30% Belgian on the remainder, an effective ~39%. This is a strong argument for ACCUMULATING funds, which avoid the dividend charge altogether (subject to the TOB and, from 2026, the 10% gains tax).

DROITS DE SUCCESSION / ERFBELASTING — a REGIONAL tax, determined by the deceased's fiscal domicile in the 5 years before death (the Region where they lived longest). Rates diverge sharply.

FLANDERS: direct line and spouse/cohabitant — 3% up to EUR 50,000, 9% from EUR 50,000 to 250,000, 27% above EUR 250,000, applied SEPARATELY to movable and immovable property. Siblings 25%/30%/55% (reformed in 2025 to reduce rates); all others 25%/45%/55%.

BRUSSELS: direct line 3% to 30%; unrelated up to 80%.

WALLONIA: direct line 3% to 30%; unrelated up to 80%.

GIFT TAX ON MOVABLE ASSETS IS THE CENTRAL BELGIAN STRATEGY — a FLAT and very low rate:

• Flanders and Brussels: 3% direct line and between spouses/cohabitants; 7% to anyone else.
• Wallonia: 3.3% direct line; 5.5% others.

Compare with a 27%-30% inheritance rate on the same assets. Gifting a EUR 2,000,000 securities portfolio to children costs EUR 60,000 rather than roughly EUR 520,000 at death.

UNREGISTERED GIFTS (handgift / don manuel, or a Dutch-notary gift): no gift tax at all, but the donor must SURVIVE A PERIOD — extended in FLANDERS from 3 to 5 YEARS for gifts made from 1 January 2025 (Brussels and Wallonia: 3 and 5 years respectively; verify current rules). Registering the gift and paying 3% buys certainty; not registering saves 3% but takes survival risk. Many families register, or take out declining-term life cover for the survival period.

Belgium does not step up basis at death for the new 2026 capital gains regime — verify how inherited assets are treated under the enacted text (the 31 December 2025 step-up and any death step-up are separate questions).

UNITED STATES: INCOME TAX TREATY in force (2006 — a modern treaty with 0% withholding on dividends to 80%+ corporate holders and to pension funds, 5%/15% otherwise, 0% interest, comprehensive LOB and mandatory arbitration).

NO US-BELGIUM ESTATE OR GIFT TAX TREATY. A Belgian resident holding US-situs shares faces 40% US estate tax over a $60,000 exemption, with only Belgium's unilateral relief. Use non-US-situs holdings (Irish UCITS ETFs) for US equity exposure.

SWITZERLAND: INCOME TAX TREATY in force (1978, Protocol 2009 — 0% dividends for 10%+ holders, 15% portfolio, 10% interest with exemptions). NO BELGIUM-SWITZERLAND INHERITANCE TAX TREATY.

BRANCHE 23 / TAK 23 (unit-linked life insurance) — the dominant Belgian wrapper and the direct answer to the TOB, the TACT and the 2026 capital gains tax:

• 2% insurance premium tax on the way in (the only entry cost).
• NO stock exchange tax (TOB) on transactions inside the policy — this alone is worth 0.12%-1.32% per trade.
• NOT a securities account, so OUTSIDE the 0.15% TACT.
• NO withholding tax on the gain at surrender, PROVIDED the contract carries no guaranteed return (a pure unit-linked contract with no capital guarantee is outside the 30% precompte). This is the key structural point.
• The Reynders tax still applies to the debt-claim component of underlying funds.
• Death benefits are subject to inheritance tax, but the policy can be gifted (at 3%) with the beneficiary clause preserved.

BRANCHE 21 (capital-guaranteed): 30% withholding on the guaranteed return if surrendered within 8 years and 1 day; exempt after — plus the 2% premium tax.

PENSIOENSPAREN / EPARGNE-PENSION: EUR 1,050/yr with a 30% tax credit, or EUR 1,350/yr with a 25% credit (the 25% option only pays off above ~EUR 1,260). A tax of 8% is levied on the accumulated capital at age 60. Note that the 2025-2026 programme laws have been reforming the pension pillars — verify current limits and credits.

LONG-TERM SAVINGS (epargne a long terme): a further EUR 2,450/yr at a 30% credit, subject to the housing "borrowing basket".

VAPZ (self-employed supplementary pension): up to 8.17% of professional income, capped ~EUR 3,965 — deductible as a professional expense, so relief at up to 50% plus social security savings.

IPT (individual pension commitment for company directors): potentially very large deductible contributions subject to the 80% rule, funded by the company — the most powerful Belgian deferral vehicle for owner-managers, plus back-service funding for past years.

No net wealth tax — abolished in 2007 (it had been 1.5% above SEK 1.5m and drove significant capital flight; its removal is credited with repatriating large sums).

HOWEVER, the ISK and KAPITALFORSAKRING regimes (below) are DEEMED-RETURN ASSET TAXES in all but name, and most Swedish private investment wealth sits in them. See the Deferral column — for a Swedish client, the ISK schablon charge IS the wealth tax, at roughly 0.9%-1.1% of assets per year.

Municipal property fee (kommunal fastighetsavgift) is capped at roughly SEK 9,500 per dwelling — a very low property tax by international standards.

30% FLAT on income from capital (inkomst av kapital), covering gains, interest and dividends alike. No long-term/short-term distinction, no indexation.

• UNLISTED SHARES: only 5/6 of the gain is taxable => effective 25%. Qualifying unlisted shares in a company where the holder is not active can be 5/6 x 30% = 25%.
• CLOSELY HELD COMPANIES ("3:12 rules"): a complex split of gains and dividends between capital income at 20% (within the "gransbelopp") and employment income at up to ~55% above it. A major planning area for Swedish entrepreneurs; the 3:12 rules were substantially reformed with effect from 2026 — verify the new simplified model.

COST BASIS: the AVERAGE COST METHOD (genomsnittsmetoden) is mandatory for identical securities — no specific identification, no FIFO election. ALTERNATIVELY, for LISTED shares, the taxpayer may use the SCHABLONMETODEN: deem the acquisition cost to be 20% OF THE SALE PROCEEDS. On a holding that has more than quintupled, the 20% deemed cost gives a lower taxable gain than the actual cost — effective rate 30% x 80% = 24% of proceeds. Always run both.

LOSSES: losses on listed shares and equity funds are FULLY deductible against gains on listed shares and equity funds. Beyond that, 70% of the loss is deductible against other capital income. If capital income is negative overall, the deficit produces a TAX REDUCTION against income tax and property tax of 30% of the deficit up to SEK 100,000, and 21% above — so losses are never wasted, but their value degrades. Losses cannot be carried forward (they must be used in the year, via the deficit reduction).

INSIDE AN ISK OR KF, LOSSES ARE NOT DEDUCTIBLE AT ALL — the schablon charge applies regardless. This is the central trade-off of the Swedish system.

Gold, art and collectibles: gains on "personal property" (personligt losore) are taxable only above SEK 50,000 of annual proceeds, and the taxpayer may deem the cost to be 25% of proceeds — effective 30% x 75% = 22.5% of proceeds. Genuine investment gold and art acquired for investment can fall into the ordinary 30% regime; the classification matters.

30% flat, preliminary tax withheld by Swedish payers. Foreign interest self-declared with a foreign tax credit.

Identical rate to dividends and gains outside the ISK.

INSIDE AN ISK OR KF, interest is not taxed as such — the schablon charge substitutes. Because the schablon is calculated on ASSETS, a high-yielding bond portfolio inside an ISK is taxed at the same ~0.9% of value as a zero-yielding one, which makes an ISK extraordinarily attractive for fixed income when rates are high, and unattractive when rates are low.

30% flat outside the ISK. IDENTICAL TO INTEREST — no preferential dividend rate.

Swedish dividend withholding on non-residents is 30% (reduced by treaty).

Inside an ISK or KF: Swedish dividends are NOT taxed at all beyond the schablon charge. FOREIGN dividends still bear source-country withholding tax; within an ISK this is CREDITABLE against the schablon tax (with a carry-forward of unused credit for 5 years), while within a KAPITALFORSAKRING the insurer reclaims it — a practical difference that matters for foreign-heavy portfolios. If the ISK schablon tax is small (as it is when interest rates are low), foreign WHT can exceed it and be wasted.

NO INHERITANCE TAX (abolished 1 January 2005, retroactive to 17 December 2004) and NO GIFT TAX (abolished 1 January 2004). Sweden is a complete zero-rate jurisdiction for wealth transfer — one of the very few developed countries with neither an estate nor a gift tax nor a wealth tax.

CONSEQUENCE: there is no reason to make lifetime gifts for tax purposes, and no reason to hold appreciated assets until death — because there is ALSO NO STEP-UP IN BASIS. Sweden applies the "kontinuitetsprincipen": the heir or donee inherits the transferor's acquisition cost, and the latent 30% capital gains tax passes with the asset. Realisation, not transfer, is the only taxable event.

Because gifts are free of gift tax and carry over basis, gifting appreciated assets to a family member in a lower capital-income position achieves nothing (the rate is a flat 30% regardless of income) — but gifting to a family member who will hold rather than sell, or into a KF, defers realisation indefinitely.

Sweden TERMINATED its inheritance tax treaties after abolishing the tax, including the US treaty (see Treaties).

UNITED STATES: INCOME TAX TREATY in force (1994; 2005 Protocol — 0% withholding on dividends to 80%+ corporate holders and pension funds, 5%/15% otherwise, 0% interest, mandatory arbitration).

US-SWEDEN ESTATE TAX TREATY: TERMINATED. Sweden gave notice after abolishing its own inheritance tax; the treaty ceased to have effect from 1 January 2008. A Swedish resident holding US-situs shares is therefore fully exposed to US estate tax at 40% over a $60,000 exemption, with NO treaty relief and no Swedish credit (Sweden has no estate tax against which to credit it). THIS IS A SERIOUS AND UNDER-APPRECIATED EXPOSURE FOR SWEDISH INVESTORS IN US EQUITIES — the fix is to hold US equity exposure through Irish-domiciled UCITS ETFs or another non-US-situs vehicle.

SWITZERLAND: INCOME TAX TREATY in force (1965, Protocol 2011 — 0% dividends for 10%+ holders and pension funds, 15% portfolio, 0% interest). The Sweden-Switzerland INHERITANCE tax treaty was also terminated following abolition of the Swedish tax.

ISK (INVESTERINGSSPARKONTO) — the defining Swedish vehicle, holding several million accounts. Instead of taxing gains, dividends and interest, the state taxes a DEEMED RETURN:

SCHABLON BASE = the average of the four quarterly opening values plus all deposits during the year.

DEEMED RETURN = base x (government borrowing rate on 30 November of the prior year + 1.00 percentage point), with a FLOOR of 1.25%.

TAX = 30% of the deemed return.

For 2025 the statslaneranta was 2.07%, giving 3.07% x 30% = 0.921% OF ASSETS PER YEAR.

TAX-FREE ALLOWANCE: from 1 January 2025 the first SEK 150,000 of ISK/KF capital base is EXEMPT, RISING TO SEK 300,000 FROM 2026 — so a couple can hold SEK 600,000 entirely tax-free.

No tax on sales, no tax on Swedish dividends, no tax on interest, no reporting of individual trades. Foreign withholding tax is creditable against the schablon tax.

DOWNSIDE: the charge applies in losing years too, and losses are not deductible. The BREAKEVEN return is the deemed rate itself (3.07% in 2025): above it the ISK wins, below it the ordinary account wins.

KAPITALFORSAKRING (KF): economically almost identical (the same schablon base and rate, applied as an "avkastningsskatt" paid by the insurer), but the assets are legally owned by the insurance company. Advantages: a named beneficiary (avoiding probate), the insurer reclaims foreign withholding tax more effectively, and it can hold assets an ISK cannot (unlisted holdings, certain foreign instruments). Disadvantages: an insurance fee, and no direct shareholder rights. Companies can own a KF; they cannot own an ISK — so a KF is the standard corporate investment wrapper in Sweden.

TJANSTEPENSION (occupational pension): employer contributions are deductible for the company, are NOT taxed as salary, and are exempt from employer social contributions (31.42%) — instead a "sarskild loneskatt" of 24.26% applies, a saving of about 7 points. The pension capital is taxed at the avkastningsskatt (currently ~0.9%) rather than 30%, and benefits are taxed as employment income on receipt. Extremely efficient for owner-managers, who can direct large sums from company profits.

PRIVATE PENSION DEDUCTION: abolished for employees in 2016; still available (up to 35% of income, capped at 10 price base amounts, ~SEK 573,000) to the SELF-EMPLOYED and to employees with no occupational pension.

DIREKTPENSION: a company pension promise secured by a KF — allows a company to set aside profits for an owner with a deduction on payment and asset growth taxed at ~0.9%.

No net wealth tax. Local Property Tax on residential property at roughly 0.1%-0.25% of a banded self-assessed value (revalued in 2025), with local authority adjustment of +/-15%. A wealth tax is periodically proposed by opposition parties but has not been enacted.

Note that Ireland's DEEMED DISPOSAL regime for funds (see Capital Gains) functions as a partial mark-to-market wealth charge on fund holdings every 8 years.

33% FLAT — among the highest headline capital gains rates in the EU, and applied with almost no reliefs.

• Annual exemption: EUR 1,270 per person (unchanged since 2001 and not transferable between spouses).
• NO indexation relief for assets acquired after 31 December 2002.
• NO long-term/short-term distinction.
• Payment dates are unusual: gains realised 1 January to 30 November are payable by 15 December of the SAME year; gains in December are payable by 31 January following. Cash planning matters.

LOSSES: allowable losses offset chargeable gains in the same year and carry forward INDEFINITELY. No carryback, EXCEPT in the year of death, when losses may be carried back three years. Losses on development land are ring-fenced. A four-week "bed and breakfast" rule disallows a loss where the same shares are repurchased within four weeks (FIFO applies otherwise; shares bought and sold within four weeks are matched first).

THE DECISIVE IRISH ISSUE — FUNDS AND THE 8-YEAR DEEMED DISPOSAL. Irish and EU/EEA/OECD-treaty "offshore funds", including virtually all UCITS ETFs and Irish life-assurance funds, fall OUTSIDE the CGT regime and into a separate EXIT TAX:

• Rate: 41% historically. BUDGET 2026 REDUCED THE RATE ON IRISH AND EQUIVALENT FUNDS TO 38% with effect from 2026 — verify the enacted rate and its scope before relying on it.
• DEEMED DISPOSAL every 8 YEARS: the investor is taxed on the unrealised gain at the eighth anniversary and every eight years thereafter, with a credit on eventual sale.
• NO LOSS RELIEF WHATSOEVER: losses on a fund cannot be offset against gains on another fund or against CGT gains, and cannot be carried forward.
• The EUR 1,270 annual CGT exemption does NOT apply.

The Funds Sector 2030 review recommended abolishing the deemed disposal; the rate cut was delivered in Budget 2026 but the 8-year rule was retained — CONFIRM CURRENT LAW.

CONSEQUENCE: Irish residents are pushed away from ETFs and towards (i) DIRECT EQUITIES, (ii) UK/Irish INVESTMENT TRUSTS (closed-ended companies, which are taxed under normal CGT at 33% with full loss relief and no deemed disposal — the standard workaround), and (iii) pensions.

US-DOMICILED ETFs are treated differently again: gains are within CGT at 33% (better), but they create US estate tax exposure and PFIC-style reporting complexity; and US-domiciled funds are largely unavailable to EU retail investors under PRIIPs.

ASSET-SPECIFIC: gold bullion and art are ordinary CGT assets at 33%. Chattels sold for under EUR 2,540 are exempt. Government gilts issued by Ireland are exempt from CGT. Wasting chattels are exempt.

ENTREPRENEUR RELIEF: 10% on qualifying business disposals up to a EUR 1,000,000 lifetime limit.

DIRT (Deposit Interest Retention Tax) 33% on Irish deposit interest, deducted at source and generally final (though PRSI may also apply for some taxpayers).

FOREIGN INTEREST AND MOST BOND COUPONS: taxed at MARGINAL INCOME TAX RATES — 20%/40% income tax, PLUS USC of up to 8%, PLUS PRSI of 4.1% (2025, rising by 0.1pp annually) = A TOP EFFECTIVE RATE OF ABOUT 52%. This is one of the harshest treatments of interest income in the developed world.

The gap between 33% on capital gains and ~52% on foreign interest is 19 points, and the gap between 33% DIRT and 52% is 19 points — so the SOURCE of the interest matters enormously. Irish deposits are taxed far more lightly than foreign bonds.

CONSEQUENCE: Irish residents should hold fixed income inside a PENSION wrapper wherever possible, and should strongly prefer capital-appreciation instruments (including deeply discounted bonds where the return is capital rather than income, subject to anti-avoidance) in taxable accounts.

TAXED AT FULL MARGINAL INCOME TAX RATES: 20%/40% income tax + USC (0.5%-8%) + PRSI 4.1% = UP TO ~52%. Irish Dividend Withholding Tax of 25% is applied at source on Irish dividends and credited.

THERE IS NO PREFERENTIAL DIVIDEND RATE. In fact IRELAND IS THE MOST EXTREME CASE IN THIS TABLE OF DIVIDENDS BEING TAXED WORSE THAN CAPITAL GAINS: ~52% versus 33% — a 19-POINT PENALTY ON INCOME.

THE PORTFOLIO CONCLUSION IS UNUSUALLY CLEAR: Irish taxable portfolios should be built on LOW-YIELD, HIGH-GROWTH equities and on share buybacks rather than dividends. A 3.5%-yielding value portfolio and a 0.8%-yielding growth portfolio delivering the same total return differ by roughly 50 basis points per year after tax. Accumulating funds do NOT solve this, because they fall into the 38%/41% exit tax with deemed disposal — the workaround is direct equities or investment trusts.

Foreign dividend withholding tax is creditable up to the treaty rate.

CAPITAL ACQUISITIONS TAX (CAT) — 33%, levied on the BENEFICIARY, and applying to both gifts and inheritances on a fully aggregated lifetime basis since 5 December 1991.

GROUP THRESHOLDS (lifetime, per group, aggregating all prior benefits since 1991):

• GROUP A (child of the disponer, including certain foster children and, in limited cases, grandchildren): EUR 400,000 (raised from EUR 335,000 in Budget 2025).
• GROUP B (brother, sister, niece, nephew, grandchild, lineal ancestor): EUR 40,000.
• GROUP C (everyone else, including an unmarried partner): EUR 20,000.

Everything above the threshold is taxed at a flat 33%.

SPOUSES AND CIVIL PARTNERS ARE FULLY EXEMPT.

SMALL GIFT EXEMPTION: EUR 3,000 per donor per donee per calendar year, outside the aggregate. Two parents can therefore move EUR 6,000 per child per year, and to each child's spouse, entirely outside the system — over 20 years and three children that is EUR 360,000+ transferred free.

RELIEFS: Dwelling House Relief (a full exemption where the beneficiary has lived in the property for 3 years and owns no other, with a 6-year continuation requirement); Business Relief and Agricultural Relief at 90%; Favourite Nephew/Niece relief.

CAT/CGT SAME-EVENT CREDIT: where a lifetime gift triggers both CGT for the donor and CAT for the donee, the CGT is credited against the CAT (subject to a 2-year clawback).

NO CGT ON DEATH: assets pass to the estate with a MARKET-VALUE UPLIFT and no capital gains charge. Combined with a 33% CGT rate, this means IRISH INVESTORS SHOULD NEVER REALISE A LARGE GAIN LATE IN LIFE — hold to death, get the uplift, and pay only CAT on the value. Note this does NOT apply to fund holdings, where the deemed disposal and exit tax regime continues to operate.

TERRITORIAL SCOPE: CAT applies if EITHER the disponer OR the beneficiary is Irish-resident or ordinarily resident (with a 5-year lead-in for non-domiciled persons), or the asset is Irish-situs.

UNITED STATES: INCOME TAX TREATY in force (1997 — 5%/15% dividends, 0% interest, comprehensive LOB). Ireland's treaty and its EU/OECD-standard fund regime are why Irish-domiciled UCITS ETFs receive 15% (rather than 30%) US withholding on dividends, which is why they dominate the European ETF market. That advantage benefits investors in every other country in this table.

US-IRELAND ESTATE TAX TREATY in force (1949) — situs and credit relief. One of the oldest US estate treaties still operating.

SWITZERLAND: INCOME TAX TREATY in force (1966, Protocols 1980 and 2012 — 0%/15% dividends, 0% interest). NO IRELAND-SWITZERLAND INHERITANCE TAX TREATY. Ireland's only estate/inheritance tax treaties are with the US and the UK.

REMITTANCE BASIS FOR RESIDENT NON-DOMICILIARIES — SPECIAL REGIME, and the most valuable Irish planning position for internationally mobile clients. An individual who is Irish-resident but NOT Irish-domiciled is taxed on Irish-source income and gains in full, but on FOREIGN income and gains ONLY TO THE EXTENT REMITTED TO IRELAND. Unlike the UK, IRELAND HAS NOT ABOLISHED ITS REMITTANCE BASIS — following the UK's 2025 abolition of the non-dom regime, Ireland is now the principal English-speaking common-law remittance-basis jurisdiction in the EU. There is no annual charge, no time limit, and no deemed-domicile clock for income tax (though CAT has its own 5-year rule). Careful segregation of clean capital, income and gains accounts is essential, as is avoiding constructive remittance (e.g. using foreign income to service an Irish debt).

PENSIONS — very generous by international standards:

• Age-related relief limits: 15% of net relevant earnings under 30, rising to 40% at 60+, applied to earnings capped at EUR 115,000.
• Employer contributions to an occupational scheme are unlimited (subject to funding rules); employer contributions to a PRSA were unlimited until 2025 and are now capped at 100% of the employee's salary.
• STANDARD FUND THRESHOLD: EUR 2,000,000, RISING BY EUR 200,000 PER YEAR FROM 2026 TO EUR 2,800,000 BY 2029.
• Tax-free lump sum of 25% up to EUR 200,000, with the next EUR 300,000 at 20%.
• Gross roll-up inside the fund: no CGT at 33%, no 52% on interest and dividends, no deemed disposal.

Given that Irish taxable investors face ~52% on income and 33%/41% on gains, THE PENSION IS BY SOME DISTANCE THE MOST VALUABLE VEHICLE IN THIS JURISDICTION.

SARP (Special Assignee Relief Programme): 30% of employment income above EUR 125,000 (raised from EUR 100,000 for 2025 arrivals) is exempt, for 5 years.

SECTION 72 / SECTION 73 POLICIES: life assurance policies specifically designed so that the proceeds, when used to pay CAT, are themselves exempt from CAT. The standard Irish liquidity solution for an illiquid estate.

INVESTMENT TRUSTS: not a "deferral strategy" as such, but the principal structural workaround — UK and Irish closed-ended investment companies deliver diversified exposure taxed at 33% CGT with full loss relief and no deemed disposal, instead of 38%/41% exit tax with none.

No net wealth tax — the Vermoegensteuer was abolished in 1994. Real property tax (Grundsteuer) is levied on heavily outdated 1973 assessed values and is negligible (typically a few hundred euros per year).

There is no securities account tax and no financial transaction tax. Political proposals for a wealth tax above EUR 1m recur but have never been enacted.

KAPITALERTRAGSTEUER (KESt) — a flat, final withholding tax:

• 27.5% on gains from SHARES, BONDS, INVESTMENT FUNDS, ETFs, DERIVATIVES and CRYPTO.
• 25% on interest from bank deposits and savings accounts (a rare case where cash is taxed MORE lightly than securities).

Withheld at source by Austrian banks and brokers, who also perform the loss netting automatically. Foreign brokers do not, so an Austrian client with a foreign account must self-assess (Anlage E1kv) — a significant administrative difference.

NO LONG-TERM/SHORT-TERM DISTINCTION FOR SECURITIES. However, Sec. 31 EStG retains a SPECULATION PERIOD FOR OTHER PRIVATE ASSETS:

• PHYSICAL GOLD AND SILVER, ART, ANTIQUES, JEWELLERY, CLASSIC CARS and other movables: gains are COMPLETELY TAX-FREE IF HELD MORE THAN ONE YEAR; taxed at the full progressive scale (up to 55%) if sold within a year. EUR 440 annual de minimis.
• Physically-backed gold ETCs generally follow the underlying if structured as a direct claim on metal — but Austrian practice is less settled than German; take a position and document it.
• Real estate: ImmoESt at 30% (with a reduced effective 4.2% for "Altvermoegen" acquired before 31 March 2002).
• Crypto: brought into the 27.5% KESt regime from 1 March 2022 — no longer exempt after a year.

LOSSES — THE CRITICAL AUSTRIAN CONSTRAINT: capital losses may be offset against capital gains AND against dividends and bond interest WITHIN THE SAME CALENDAR YEAR (the "Verlustausgleich", performed automatically by Austrian banks across accounts at the same institution). BUT THERE IS NO LOSS CARRYFORWARD FOR PRIVATE INVESTORS. A loss not used by 31 December is PERMANENTLY LOST.

• Losses cannot be offset against bank deposit interest (the 25% category) or against rental or employment income.
• Losses across DIFFERENT banks are not automatically netted; the taxpayer must claim the "Verlustausgleichsoption" in the annual return (Regelbesteuerungsoption / Verlustausgleich via E1kv).

THIS MAKES DECEMBER TAX MANAGEMENT UNUSUALLY IMPORTANT IN AUSTRIA. Realising gains to absorb a loss position, or realising losses to absorb gains, must be done inside the calendar year, and consolidating accounts at one institution simplifies it enormously.

FUNDS: Austrian and foreign "reporting funds" (Meldefonds) report deemed distributed income (ausschuettungsgleiche Ertraege) annually via the OeKB, which is taxed at 27.5% even for accumulating funds — so ACCUMULATING ETFs DO NOT DEFER AUSTRIAN TAX on the income component (capital gains inside the fund are taxed at 60% inclusion). NON-REPORTING funds are penalised: a deemed annual income of 90% of the NAV increase or 10% of NAV, whichever is higher. Always use a reporting (Meldefonds) share class.

25% KESt on interest from bank deposits and savings accounts. 27.5% KESt on interest from bonds, bond funds and other securities.

Both are final withholding taxes. Foreign-source interest is self-assessed at the same rates.

NOTE THE ASYMMETRY: deposit interest at 25% cannot be sheltered by capital losses, while bond interest at 27.5% CAN. When harvesting losses, bond interest is a valid absorption target and deposit interest is not.

REGELBESTEUERUNGSOPTION: a taxpayer whose progressive marginal rate is below 25%/27.5% may elect assessment at the ordinary scale for ALL capital income — relevant for low-income taxpayers and children, but the election is global.

27.5% KESt, final. IDENTICAL TO SECURITIES CAPITAL GAINS and slightly HIGHER than the 25% on deposit interest — Austria offers no dividend preference.

Austrian dividend withholding is 27.5%; foreign dividend withholding is credited up to the treaty rate against the 27.5% Austrian tax, with the excess reclaimable from the source state (Austrian banks handle the credit mechanically for common treaty countries).

Because dividends can be sheltered by capital losses within the year, a portfolio that generates dividends AND realisable losses is more efficient than one that generates dividends alone. Practically, the Austrian conclusion is the same as elsewhere: with no rate preference and full loss-offset within the year, focus on the December netting exercise rather than on income-versus-growth positioning.

NO INHERITANCE TAX AND NO GIFT TAX. Both were abolished with effect from 1 August 2008 after the Constitutional Court struck down the valuation base. Austria is a zero wealth-transfer-tax jurisdiction.

WHAT REMAINS:

• GIFT NOTIFICATION OBLIGATION (Schenkungsmeldegesetz 2008): gifts must be REPORTED to the tax office within 3 months where they exceed EUR 50,000 within 1 year between close relatives, or EUR 15,000 within 5 years between other persons. Failure to report attracts a penalty of up to 10% of the value. No tax is due — only the report.
• GRUNDERWERBSTEUER (real estate transfer tax): 2% within the family on the "Grundstueckswert" (a statutory value well below market), plus 1.1% registration fee; 3.5% otherwise. Gratuitous real estate transfers therefore still bear ~3.1% within the family.
• No step-up in basis: heirs and donees inherit the transferor's acquisition cost for KESt purposes, so latent 27.5% gains pass with the asset.

PRIVATSTIFTUNG (Austrian private foundation): historically the principal succession vehicle. Entry tax (Stiftungseingangssteuer) of 2.5% on contributions; the foundation pays a 23% "Zwischensteuer" (interim tax) on interest and capital gains which is credited against the 27.5% withholding on distributions to beneficiaries; distributions bear 27.5% KESt. With no inheritance tax, the case for a Privatstiftung is now asset protection, control and dynastic continuity rather than tax saving.

UNITED STATES: INCOME TAX TREATY in force (1996 — 5%/15% dividends, 0% interest).

US-AUSTRIA ESTATE AND GIFT TAX TREATY in force (1982). Note that Austria no longer levies inheritance or gift tax, so the treaty's practical use is limited to relieving US estate tax on US-situs assets held by Austrian residents — where it remains valuable, giving a pro-rated unified credit instead of the $60,000 non-resident exemption.

SWITZERLAND: INCOME TAX TREATY in force (1974, amended several times, most recently by the 2012 protocol on information exchange). The Austria-Switzerland INHERITANCE tax treaty was terminated by Austria after abolition of its own tax (Austria also terminated its inheritance treaties with Germany, Czechia and Hungary).

Austria's deferral menu is comparatively thin, precisely because the headline rates are moderate and there is no inheritance tax. The tools that matter:

ZUKUNFTSVORSORGE (state-subsidised retirement provision): capped at roughly EUR 4,000 per year (indexed to the social security ceiling), attracting a state premium of about 4.25% and full exemption of the investment return and of the annuity. Modest in scale.

PENSIONSKASSE AND BETRIEBLICHE KOLLEKTIVVERSICHERUNG (occupational pension): employer contributions are deductible for the company, are not treated as taxable salary up to certain limits, and the fund's returns are exempt from KESt. Employer contributions of up to EUR 300/yr per employee are entirely tax-free; larger structured contributions for directors are the main route for owner-managers.

LEBENSVERSICHERUNG (life insurance wrapper): a 4% insurance tax on premiums (11% for single premiums where the term is under 10 years or the insured is over 50 at inception). In exchange, investment income inside a qualifying policy escapes the 27.5% KESt, and the payout is tax-free provided the minimum term (15 years, or 10 years where the insured is 50+ at inception) and the premium-payment conditions are met. For a long-horizon portfolio the 4% entry cost is recovered quickly against 27.5% on internal gains — but the 4% is a real hurdle and the vehicle only works on long horizons.

PRIVATSTIFTUNG: the 23% interim tax on capital gains and interest at foundation level is REFUNDED as distributions are made, so a foundation that reinvests defers, and one that distributes pays a total of 27.5%. Combined with the 2.5% entry tax and no inheritance tax, this is a control and continuity vehicle.

ZUZUGSBEGUENSTIGUNG (Sec. 103 EStG) — SPECIAL REGIME: individuals relocating to Austria whose activity is in the interest of Austrian science, research, art or sport may obtain (i) elimination of the additional Austrian tax burden on FOREIGN income for up to 5 years, or (ii) for scientists and researchers, a 30% flat-rate deduction. Discretionary and ruling-based, granted by the Ministry of Finance.

THE PRIMARY "STRATEGY" IS THE CALENDAR-YEAR LOSS NETTING. Because losses die on 31 December, systematic December harvesting has a hard, quantifiable value.

No net wealth tax — abolished in 1997. Property is taxed via the ejendomsvaerdiskat (property value tax) and grundskyld (land tax), reformed and rebased on new public valuations from 2024, at roughly 0.51% of the property value up to a threshold and 1.4% above, plus land tax.

Denmark instead achieves an asset-based effect through the LAGERPRINCIP (mark-to-market) taxation of investment funds and ETFs — see Capital Gains. This is functionally a tax on unrealised wealth appreciation and is the defining feature of Danish investment taxation.

TWO SEPARATE INCOME CATEGORIES, WITH DIFFERENT RATES AND DIFFERENT TIMING RULES. Getting an instrument into the right category is the whole game in Denmark.

• AKTIEINDKOMST (share income) — for LISTED SHARES and for funds classified as "aktiebaserede investeringsselskaber" on the tax authority's positive list:
• 27% on the first DKK 67,500 (2025; DKK 135,000 for a married couple)
• 42% above that.
• KAPITALINDKOMST (capital income) — for BONDS, bond funds, currency gains, and funds NOT on the equity positive list:
• Taxed with other net capital income at up to roughly 42%-42.7% (the exact top depends on municipality and the "skraeloft"), with negative net capital income deductible at only ~25.6%-33%.

TIMING — THE CRITICAL DISTINCTION:

• DIRECTLY HELD LISTED SHARES: REALISATION principle. Tax only on sale. Average cost basis.
• INVESTMENT FUNDS AND ETFs classified as "investeringsselskaber" (which includes virtually all foreign ETFs, whether accumulating or distributing): LAGERPRINCIP — ANNUAL MARK-TO-MARKET. The investor is taxed each year on the change in market value from 1 January to 31 December, whether or not anything is sold. Tax is payable on paper gains.
• Danish "investeringsforeninger" with minimum-distribution status (minimumsbeskattede) use the realisation principle for shares held within them but distribute taxable income annually.

THE POSITIVE LIST (aktiebaserede investeringsselskaber, published by Skattestyrelsen) determines whether a fund's lagerprincip gains are taxed as share income (27%/42%) or as capital income (up to 42%, but with the worse loss-relief treatment). ALWAYS CHECK THE POSITIVE LIST BEFORE BUYING AN ETF FOR A DANISH CLIENT — the same global equity ETF can be 27% or 42% depending on whether the issuer registered it.

LOSSES:

• Losses on LISTED shares can ONLY offset gains and DIVIDENDS from other LISTED shares. They cannot offset capital income or ordinary income. Carried forward INDEFINITELY and transferable to a spouse. Unused listed-share losses are a common trapped asset in Danish portfolios.
• Losses on lagerprincip funds are deductible in the year against the same category (this is the main upside of lagerprincip — it gives symmetric, immediate loss relief).
• Losses on bonds and currency: deductible as negative capital income, but at a lower effective value than the rate at which gains are taxed.

OTHER ASSETS: gold, art and collectibles held privately are generally OUTSIDE the tax net unless acquired for speculation (in which case ordinary income). Private movables are typically tax-free. Crypto is taxed as speculation income at up to ~52% — one of the harshest crypto regimes in Europe, though a 2025 committee recommended moving crypto to lagerprincip capital income from 2026; verify.

EXIT TAX (fraflytterskat): an individual who has been Danish-resident for at least 7 of the previous 10 years is deemed to dispose of shares and certain other assets on emigration, with tax deferrable against security and an annual instalment obligation.

KAPITALINDKOMST — taxed with other net capital income at up to about 42%. Positive net capital income above DKK 50,500 (single) attracts the top-bracket component; below the threshold the effective rate is lower.

Negative net capital income (i.e. interest EXPENSE) is deductible at only about 25.6% (falling to 25.4%) for amounts above DKK 50,000, and about 33% below — a deliberate asymmetry that penalises leverage.

TOP-TOPSKAT: from 2026 Denmark introduced an additional 5% bracket on personal income above roughly DKK 2.5m, and a "mellemskat" of 7.5% from DKK ~618,000, as part of the 2023 tax reform package taking effect 2026. Verify how these interact with capital income for a given client.

AKTIEINDKOMST — 27% on the first DKK 67,500 (DKK 135,000 for a couple), 42% above. Danish dividend withholding is 27%, credited or refunded.

PREFERENCE VERSUS INTEREST: yes, at the margin. The 27% band on the first DKK 67,500 per person (DKK 135,000 per couple) is a genuine preference against interest taxed at up to 42%. Above that band the rates converge (42% for both). SO: A DANISH COUPLE SHOULD DELIBERATELY GENERATE ABOUT DKK 135,000 OF SHARE INCOME PER YEAR TO FILL THE 27% BAND — through dividends or through realising gains on directly-held listed shares — before allowing income into the 42% bracket. This annual band-filling is a routine and valuable Danish exercise.

Foreign dividends: credit for foreign withholding up to the treaty rate.

Note that dividends received INSIDE a lagerprincip fund are simply absorbed into the annual value change — the fund's total return is taxed, and there is no separate dividend treatment.

BOAFGIFT (estate duty) — levied on the ESTATE, not the recipient, and low by European standards:

• SPOUSE: fully EXEMPT.
• DIRECT DESCENDANTS, stepchildren, parents, and cohabitants of 2+ years: 15% on the estate above a bundfradrag of DKK 358,100 (2025, indexed).
• ALL OTHERS: 15% plus a SUPPLEMENTARY 25% levied on the amount after the 15%, giving an effective 36.25%.
• BUSINESS SUCCESSION: the rate on qualifying business assets passing to close family was reduced to 10% with effect from 1 October 2024 (from 15%), with a further option to defer.

GIFT TAX (gaveafgift): 15% on gifts to children above an annual exemption of DKK 76,900 (2025) per donor per child, plus DKK 26,900 to a child's spouse. Gifts to a spouse are exempt. Gifts to anyone outside the defined family circle are taxed as ORDINARY INCOME to the recipient at up to ~52% — a very large distinction.

THE ANNUAL GIFT EXEMPTION IS THE PRINCIPAL DANISH TRANSFER TOOL: two parents can give DKK 153,800 per child per year plus DKK 53,800 per child's spouse, entirely free of duty. Over 25 years and two children with spouses, that is over DKK 5,000,000 transferred at zero cost.

No step-up in basis: heirs generally succeed to the deceased's acquisition cost (succession), or the estate can elect to realise. Where succession applies, the latent 42% share-income tax passes with the asset — and a "passivpost" discount is allowed against the boafgift to reflect it.

UNITED STATES: INCOME TAX TREATY in force (1999; 2006 Protocol — 0% withholding on dividends to 80%+ corporate holders and to pension funds, 5%/15% otherwise, 0% interest, mandatory arbitration).

US-DENMARK ESTATE AND GIFT TAX TREATY in force (1983).

SWITZERLAND: INCOME TAX TREATY in force (1973, Protocol 2009 and 2013). DENMARK-SWITZERLAND ESTATE TAX TREATY in force (1973) — Denmark is one of the few countries with a Swiss inheritance treaty (alongside Germany, the Netherlands, Finland, the UK, Norway, Sweden (terminated) and the US).

PENSION — the dominant Danish strategy, driven by the PAL TAX ARBITRAGE. Returns inside a Danish pension are taxed at PAL (pensionsafkastskat) OF 15.3% PER YEAR ON A MARK-TO-MARKET BASIS, versus up to 42% outside. That 27-point annual differential compounds enormously.

• RATEPENSION: DKK 65,500 per year (2025), deductible; paid out over at least 10 years.
• LIVSVARIG LIVRENTE (lifetime annuity): NO ANNUAL CAP for employer-arranged schemes; for private contracts the deduction is spread over 10 years or taken immediately if the contract is for life. This is the vehicle for large deductible contributions.
• ALDERSOPSPARING: DKK 9,900 per year (non-deductible, but tax-free on payout), rising to DKK 59,200 per year in the final 7 years before state pension age — a valuable late-career catch-up.
• Deduction at up to ~52% on the way in; benefits taxed as personal income at 37%-52% on the way out; PAL at 15.3% throughout.

AKTIESPAREKONTO (ASA / share savings account): a FLAT 17% on lagerprincip (mark-to-market) returns from listed shares and equity funds, versus 27%/42% outside. The contribution cap has risen in steps — DKK 166,200 (2025) with further increases legislated; verify the current ceiling. Small in absolute terms but the cheapest equity money in Denmark. Losses inside the ASA carry forward within the account.

HOLDINGSELSKAB (holding company): a Danish company pays 0% on gains and dividends from "subsidiary shares" (10%+ holdings) and on "group shares"; on PORTFOLIO shares (under 10%) it pays 22% corporate tax, with listed portfolio shares on lagerprincip and unlisted portfolio shares exempt from gains tax since 2013. For an owner-manager who has sold a business, holding the proceeds in a holding company and investing at 22% (with unlisted portfolio shares tax-free) rather than 42% personally is the standard structure — the personal 27%/42% is deferred until dividends are taken out.

No general net wealth tax. Local property taxes are low and area-based.

A "special tax on high-value assets" was introduced from 2024: 0.3% on the value of residential buildings exceeding RON 2,500,000 (on the excess) and 0.3% on cars registered in Romania with a purchase value above RON 375,000, for the first five years. This is a narrow luxury-asset levy rather than a wealth tax, and does not reach financial assets.

Romania enacted several fiscal packages in 2024 and 2025 (Ordinance 156/2024 and the July/August 2025 austerity package) that raised VAT, dividend tax and various levies. SEVERAL OF THE RATES BELOW WERE MOVED MORE THAN ONCE IN THAT PERIOD — verify each against current law before relying on it.

A GENUINE AND UNUSUALLY LARGE LONG-TERM VERSUS SHORT-TERM DISTINCTION, AT VERY LOW RATES:

• 1% on gains from securities HELD MORE THAN 365 DAYS
• 3% on gains from securities HELD 365 DAYS OR LESS

(introduced by Law 142/2022 with effect from 2023; the 2025 fiscal packages proposed increases — CONFIRM THE CURRENT RATES, which may have moved to 1.5%/3% or higher.)

These are among the lowest capital gains rates in the world, and the 1%/3% split gives a clean 2-point (or greater) reward for a one-year hold.

MECHANICS DIFFER BY INTERMEDIARY, AND THIS MATTERS ENORMOUSLY:

• THROUGH A ROMANIAN INTERMEDIARY: the broker withholds 1% or 3% on the GAIN OF EACH PROFITABLE TRANSACTION, as a final tax. THERE IS NO NETTING AND NO LOSS OFFSET — a year with RON 1,000,000 of gains and RON 900,000 of losses is taxed on the full RON 1,000,000. This is a serious structural defect for active strategies.
• THROUGH A NON-ROMANIAN INTERMEDIARY (e.g. Interactive Brokers, Saxo): the taxpayer SELF-ASSESSES the ANNUAL NET GAIN on the Unique Declaration (Declaratia Unica), losses ARE netted against gains, and net losses carry forward for 7 YEARS (limited to 70% of the following years' gains).

THE PRACTICAL CONCLUSION IS COUNTERINTUITIVE: for an actively managed portfolio, a FOREIGN broker is materially better than a Romanian one, because it preserves loss offset. For a buy-and-hold portfolio, the Romanian broker's withholding is simpler and the outcome is the same.

CASS (health contribution): investment income is subject to the health contribution at 10% of a capped base — thresholds at 6, 12 and 24 gross minimum wages, so the maximum annual CASS on investment income is 10% of 24 minimum wages (a few thousand lei). This is a flat capped amount, not a percentage of the whole gain, so it is immaterial on a large portfolio but meaningful on a small one.

OTHER ASSETS: gains on the sale of movable property by individuals outside a business are generally outside the scope. Real estate: 3% on the sale price for properties held up to 3 years and 1% above (from 2024, replacing the previous exempt threshold). Crypto: 10% on the net gain, with a RON 200 per-transaction de minimis and a RON 600 annual threshold.

10% flat withholding tax, final, on bank deposit interest and bond coupons. Withheld by Romanian payers; foreign interest self-assessed at 10% on the Unique Declaration with a foreign tax credit.

Plus the capped CASS health contribution described above where total investment income exceeds the thresholds.

NOTE THE INTERNAL DISTORTION: interest is taxed at 10% while long-term capital gains are taxed at 1%. THE SPREAD BETWEEN INCOME AND GAIN IN ROMANIA IS THEREFORE 9 POINTS — the largest proportionate preference for capital appreciation of any country in this table other than the zero-CGT jurisdictions. A Romanian resident should hold accumulating instruments and zero-coupon or discount bonds in preference to coupon-paying debt wherever the instrument permits.

Raised from 8% to 10% with effect from 1 January 2025 (Emergency Ordinance 156/2024). Further increases were proposed in the 2025 fiscal packages — VERIFY THE CURRENT RATE, which may be 16%.

Final withholding for Romanian-source dividends. Foreign dividends are self-assessed at the same rate with a credit for foreign withholding tax up to the Romanian liability.

Plus the capped CASS contribution.

VERSUS INTEREST: broadly equal at 10%. VERSUS LONG-TERM CAPITAL GAINS AT 1%: dividends are taxed TEN TIMES more heavily. This is the sharpest income-versus-growth distortion in the EU, and it means Romanian taxable portfolios should be constructed almost entirely from ACCUMULATING funds and non-dividend-paying growth equities, held for more than 365 days.

EFFECTIVELY NO INHERITANCE TAX. Romania levies NO tax on an inheritance provided the succession procedure is completed WITHIN TWO YEARS OF DEATH. If the estate is settled after two years, a tax of 1% OF THE ESTATE VALUE applies (plus notarial fees). There are no rate bands, no relationship distinctions and no thresholds.

NO GIFT TAX between individuals in the direct line; gifts of real estate between relatives up to the third degree are exempt, and other gifts of real estate are taxed at the same modest rates as sales. Gifts of movable property and money between individuals are not taxed.

Romania is therefore one of the cheapest places in the EU to transfer wealth at death — with the sole practical requirement being ADMINISTRATIVE: complete the succession within two years. The 1% penalty for late settlement is the only real risk, and it is entirely avoidable.

No step-up in basis is needed for securities given the 1% long-term rate; inherited securities take the deceased's cost, but at 1% the latent liability is trivial.

UNITED STATES: the 1973 US-ROMANIA INCOME TAX TREATY REMAINS IN FORCE. A modern replacement was signed in 2012 but HAS NEVER BEEN RATIFIED BY THE US SENATE. The 1973 treaty is very dated — 10% on dividends and interest, no limitation-on-benefits article, no arbitration, and a narrow exchange-of-information provision. It works, but it is not a modern instrument.

NO US-ROMANIA ESTATE OR GIFT TAX TREATY (though Romania levies no inheritance tax, so the exposure runs only one way: a Romanian resident holding US-situs assets faces 40% US estate tax over a $60,000 exemption with no treaty relief and no Romanian credit to claim). USE IRISH-DOMICILED UCITS ETFs FOR US EQUITY EXPOSURE.

SWITZERLAND: INCOME TAX TREATY in force (1993, Protocol 2011 — 0%/15% dividends, 5% interest with exemptions). No inheritance treaty.

Romania has a wide EU and OECD treaty network and participates fully in CRS and DAC.

Romania's low flat rates make deferral vehicles far less important than elsewhere, and the domestic menu is correspondingly thin.

PILLAR III VOLUNTARY PENSIONS: employee contributions are deductible up to the RON equivalent of EUR 400 per year, and employer contributions up to a further EUR 400 per employee are exempt from income tax and social contributions. Investment returns inside the fund are untaxed; benefits are taxed at 10% above a monthly exempt amount. Small in absolute terms.

VOLUNTARY HEALTH INSURANCE and subscriptions: deductible up to EUR 400 per year.

PILLAR II: mandatory (contribution rate 4.75% of gross salary), professionally managed, untaxed accumulation.

MICRO-ENTERPRISE REGIME: a Romanian company with revenue below the threshold (reduced to EUR 250,000 for 2025 and EUR 100,000 for 2026) pays 1% or 3% turnover tax rather than 16% corporate tax — historically the most-used Romanian planning tool, though successive reforms have narrowed it sharply and it does not accommodate passive investment income.

THE REAL "STRATEGY" IN ROMANIA IS THE 365-DAY HOLDING PERIOD AND THE CHOICE OF BROKER. Both are free.

No net wealth tax. Real estate tax is area-based and very low (roughly doubled in 2024, but still a small absolute amount). No financial transaction tax.

CZECHIA HAS ONE OF THE MOST GENEROUS LONG-TERM CAPITAL GAINS EXEMPTIONS IN THE EU, RECENTLY CAPPED.

THE "TIME TEST" (casovy test): gains on SECURITIES held for MORE THAN 3 YEARS are EXEMPT from personal income tax. Gains on units of investment funds likewise. Gains on shares in non-listed companies (business shares) require 5 YEARS.

THE "VALUE TEST": gains are also exempt, regardless of holding period, if TOTAL GROSS PROCEEDS from securities sales in the calendar year do not exceed CZK 100,000. Note this is gross PROCEEDS, not gain — a small threshold in practice.

THE 2025 CAP — IMPORTANT AND NEW: from 1 January 2025, the amount of income exempted under the 3-year and 5-year tests is CAPPED AT CZK 40,000,000 PER TAXPAYER PER YEAR (approximately EUR 1.6m). Gains above that cap are taxable even if the holding period is satisfied. A taxpayer may elect to step up the acquisition cost to the market value at 31 December 2024 (or to use an expert valuation) when computing the taxable excess — a valuable transitional election for anyone sitting on a very large long-held position. Large disposals should therefore be SPREAD ACROSS CALENDAR YEARS to use multiple CZK 40m caps.

TAXABLE GAINS (i.e. holdings under 3 years, or above the cap) are taxed as "other income" (Sec. 10) at:

• 15% up to the progressive threshold — 36x the average wage, approximately CZK 1,676,000 for 2025
• 23% above it.

LOSSES: within Sec. 10 "other income", losses may be offset against gains OF THE SAME TYPE IN THE SAME TAX YEAR ONLY. THERE IS NO LOSS CARRYFORWARD for individuals. Any unused loss is extinguished at 31 December. In practice, because most long-held positions are exempt anyway, this matters mainly for active traders.

CRYPTO: from 1 January 2025, the 3-year time test and the CZK 100,000 value test were EXTENDED TO CRYPTO-ASSETS (with the same CZK 40m cap) — a very favourable and unusual treatment among EU states.

OTHER ASSETS: gains on movable property (gold, art, collectibles, jewellery) are generally EXEMPT unless the asset was used for business. Real estate: exempt after 10 years (5 years for property acquired before 2021), or if the proceeds are used to satisfy the taxpayer's own housing need within a set period.

15% withholding tax on bank deposit interest, final for Czech-source interest.

Interest from other sources (foreign bonds, foreign accounts) is included in the general base and taxed at 15% / 23% under the progressive scale.

Note the contrast: interest is taxed at 15%-23% while a long-held capital gain is taxed at 0%. THE SPREAD IS THEREFORE UP TO 23 POINTS IN FAVOUR OF CAPITAL APPRECIATION — one of the strongest structural preferences for growth over income in the EU.

15% withholding tax, final for Czech-source dividends. Foreign dividends are included in the general base at 15%/23% with a credit for foreign withholding tax up to the treaty rate.

IDENTICAL TO INTEREST — no dividend preference.

VERSUS THE 0% LONG-TERM CAPITAL GAINS RATE, dividends are heavily penalised. THE PORTFOLIO CONCLUSION IS UNAMBIGUOUS: Czech taxable investors should hold ACCUMULATING funds and non-dividend-paying equities, and hold them for more than three years. A 3%-yielding portfolio versus a 0%-yielding one with the same total return costs 45-69 basis points per year in tax, forever.

NO INHERITANCE TAX. It was abolished with effect from 1 January 2014; inheritances are simply EXEMPT FROM INCOME TAX in all cases, regardless of the relationship between deceased and heir and regardless of value.

GIFTS: technically taxed as income rather than under a separate gift tax, but with very wide exemptions:

• Gifts between RELATIVES IN THE DIRECT LINE (parents, children, grandparents, grandchildren) and between siblings, uncles/aunts, nephews/nieces, spouses and their close relatives: EXEMPT without limit.
• Gifts between persons who have LIVED IN THE SAME HOUSEHOLD for at least one year before the gift: EXEMPT.
• Gifts from ALL OTHER persons: exempt up to CZK 50,000 per year in aggregate from a single donor; above that, taxed as other income at 15%/23%.

Czechia is therefore a zero-cost jurisdiction for family wealth transfer, both at death and during life.

Heirs succeed to the deceased's acquisition cost for the time test, BUT the holding period of the deceased is generally aggregated with the heir's for direct-line relatives — so an inherited long-held position remains exempt. Confirm this for a specific case, as the rules differ between the 3-year securities test and the real estate test.

UNITED STATES: INCOME TAX TREATY in force (the 1993 treaty with the Czech Republic — 5%/15% dividends, 0% interest). Modest but functional; it lacks a modern LOB and arbitration.

NO US-CZECHIA ESTATE OR GIFT TAX TREATY. Since Czechia levies no inheritance tax there is nothing to credit, so a Czech resident holding US-situs shares is fully exposed to 40% US estate tax over a $60,000 exemption. Use Irish-domiciled UCITS ETFs.

SWITZERLAND: INCOME TAX TREATY in force (1995, Protocol 2012 — 0%/15% dividends, 0% interest). No inheritance treaty.

DIP (DLOUHODOBY INVESTICNI PRODUKT / Long-Term Investment Product) — NEW AND IMPORTANT, introduced 1 January 2024. A DIP is not a separate fund but a TAX WRAPPER that can be applied to an ordinary brokerage account, a fund account or a bank deposit at a licensed provider. Contributions are DEDUCTIBLE from the personal income tax base, subject to a COMBINED ANNUAL LIMIT OF CZK 48,000 across DIP, supplementary pension savings, pension insurance and qualifying life insurance. The account must be held until at least age 60 AND for at least 10 years; early withdrawal claws back the deductions. Employers may also contribute up to CZK 50,000 per year free of tax and social contributions.

The DIP is the most significant Czech reform in this area for a decade because it allows a self-directed equity portfolio — not just an insurer's or pension fund's product — to receive tax relief.

DOPLNKOVE PENZIJNI SPORENI (supplementary pension savings, "third pillar"): within the same CZK 48,000 deduction, with an additional STATE CONTRIBUTION of up to CZK 340 per month (CZK 4,080 per year) on contributions between CZK 500 and CZK 1,700 per month. From 2024 the state contribution structure was reformed and an "alternative participation fund" with an equity-heavy allocation was introduced.

LIFE INSURANCE: within the same CZK 48,000 combined limit; the older separate limits were consolidated in 2024.

CORPORATE HOLDING: a Czech s.r.o. or a.s. pays 21% corporate income tax, with a participation exemption on dividends and gains from 10%+ holdings in EU subsidiaries held for 12 months. Distributions to an individual then bear 15%. Useful for concentrated business interests, less so for a diversified portfolio given the 0% personal rate after three years.

No net wealth tax — abolished with effect from 2006. Real estate tax is levied by municipalities at roughly 0.41%-1.00% of the taxable value of buildings and 0.93%-2.00% on land, with the taxable value typically well below market.

No securities transaction tax on listed shares traded on a regulated market; a 1.6% transfer tax applies to unlisted share transfers and 3% to real estate and housing company shares.

CAPITAL INCOME TAX: 30% on the first EUR 30,000 of total annual capital income, and 34% above that. The same two-rate scale applies to capital gains, interest and (via the inclusion mechanism) dividends.

NO LONG-TERM/SHORT-TERM RATE DISTINCTION — BUT FINLAND HAS ONE OF THE MOST VALUABLE LONG-TERM HOLDING RELIEFS IN EUROPE:

THE DEEMED ACQUISITION COST (hankintameno-olettama). Instead of the actual cost, the taxpayer may deduct:

• 20% OF THE SALE PRICE for assets held LESS THAN 10 YEARS
• 40% OF THE SALE PRICE for assets held 10 YEARS OR MORE

This is an ELECTION, applied per disposal, and the taxpayer takes whichever is more favourable. Actual acquisition costs plus selling expenses are used where they are higher.

CONSEQUENCE: on a fully appreciated asset held 10+ years, the maximum effective rate is 34% x 60% = 20.4% OF THE ENTIRE SALE PRICE — a hard ceiling. On an asset held under 10 years the ceiling is 34% x 80% = 27.2%.

IMPORTANT: when the deemed cost is used, ACTUAL SELLING EXPENSES CANNOT ALSO BE DEDUCTED. And the deemed cost cannot create a loss.

SMALL DISPOSALS EXEMPTION: if the taxpayer's TOTAL sale proceeds from all assets in a calendar year do not exceed EUR 1,000, the gains are exempt. Correspondingly, losses are not deductible if total proceeds are under EUR 1,000 and total acquisition costs under EUR 1,000.

LOSSES: capital losses are deductible against ALL CAPITAL INCOME (since 2016, not merely against capital gains) — so a loss on shares can offset dividend income, rental income and interest. Carried forward FIVE YEARS. Losses on assets whose sale would have been exempt (e.g. an owner-occupied home held 2+ years) are not deductible.

ASSET-SPECIFIC: gold, art and collectibles are ordinary capital assets subject to the same 30%/34% rates and to the deemed acquisition cost. Household effects (furniture, personal items) are exempt up to EUR 5,000 of gains per year. Derivatives, futures and options: capital income; standardised derivatives losses are deductible. Crypto: capital income at 30%/34%, and the deemed acquisition cost is AVAILABLE for crypto — a valuable and often-missed point on long-held holdings.

30% / 34% capital income tax. Finnish deposit interest is subject to a separate 30% final SOURCE TAX (korkotulon lahdevero) withheld by the bank and not included in the capital income scale — so bank interest is always 30%, never 34%.

Foreign interest and bond coupons are ordinary capital income at 30%/34% with a credit for foreign withholding.

Interest expense on debt used to acquire income-producing assets is deductible against capital income; mortgage interest deductibility on an owner-occupied home was fully phased out in 2023.

FINLAND GIVES A GENUINE DIVIDEND PREFERENCE — one of the few countries in this table where dividends are taxed more lightly than interest.

LISTED COMPANIES (Finnish and foreign): only 85% OF THE DIVIDEND IS TAXABLE CAPITAL INCOME; 15% is exempt. Effective rates:

• 85% x 30% = 25.5% on capital income up to EUR 30,000
• 85% x 34% = 28.9% above

versus 30%/34% on interest — a preference of 4.5 to 5.1 points.

Finnish listed companies withhold 25.5% at source.

UNLISTED COMPANIES: a much more favourable regime. A dividend up to 8% OF THE MATHEMATICAL NET ASSET VALUE of the shares is taxed with only 25% included as capital income (effective 7.5% / 8.5%), up to a EUR 150,000 annual cap per taxpayer; above EUR 150,000 the inclusion rises to 85%. Dividends exceeding the 8% NAV return are 75% taxable as EARNED income at progressive rates up to ~57%. This "8% rule" is the centre of Finnish owner-manager planning: capitalise the company, keep the NAV high, and extract up to 8% of NAV at an effective 7.5%.

Foreign dividend withholding is credited up to the treaty rate against the Finnish tax.

CONSEQUENCE: unlike almost every other country here, a Finnish investor has a modest reason to PREFER dividends to interest in a taxable account. But the 10-year deemed acquisition cost means capital gains still have the lowest effective ceiling (20.4%), so growth remains the most efficient form of return.

PERINTOVERO (inheritance tax) and LAHJAVERO (gift tax), levied on the RECIPIENT, on worldwide assets where either the deceased/donor or the recipient was Finnish-resident.

CLASS I (spouse, direct ascendants and descendants, and a cohabitant in defined circumstances):

Progressive from 7% to 19%, with the 19% band applying above EUR 1,000,000. Bands: EUR 20,000-40,000 at 7%; 40,000-60,000 at 10%; 60,000-200,000 at 13%; 200,000-1,000,000 at 16%; above EUR 1,000,000 at 19%.

CLASS II (all others, including siblings): 19% to 33%, with the 33% band above EUR 1,000,000.

DEDUCTIONS: the surviving spouse deducts EUR 90,000 from their share; a direct descendant under 18 who is the closest heir deducts EUR 60,000. Estates under EUR 20,000 are exempt.

GIFT TAX: Class I 8% to 17%; Class II 19% to 33%. GIFTS OF UNDER EUR 5,000 FROM THE SAME DONOR IN ANY ROLLING THREE-YEAR PERIOD ARE EXEMPT — so a donor can give EUR 4,999 to each of any number of recipients every three years free of tax. Two parents and three children: EUR 29,994 every three years, tax-free.

Gifts made within three years of death are aggregated with the estate.

FROM 2025 the payment period for inheritance tax was extended to 10 years and late-payment interest was waived for the extended period — a significant liquidity relief for illiquid estates. The government programme has also signalled an intention to reduce inheritance tax; monitor.

BUSINESS SUCCESSION RELIEF (sukupolvenvaihdoshuojennus): qualifying business and farm assets are valued at 40% of their comparison value, and the tax may be paid over 10 years interest-free — an effective reduction of well over half.

NO STEP-UP IN BASIS at death: heirs take the value used for inheritance tax purposes as their acquisition cost — which IS effectively a step-up to market value, since inheritance tax is charged on fair value. This is an important and favourable point: INHERITED ASSETS IN FINLAND CARRY A MARKET-VALUE BASIS, extinguishing the latent capital gains tax.

UNITED STATES: INCOME TAX TREATY in force (1989; 2006 Protocol — 0% withholding on dividends to 80%+ corporate holders and to pension funds, 5%/15% otherwise, 0% interest).

US-FINLAND ESTATE TAX TREATY in force (1952) — situs and credit relief.

SWITZERLAND: INCOME TAX TREATY in force (1991, Protocols 2010 and 2012 — 0%/10% dividends, 0% interest). FINLAND-SWITZERLAND INHERITANCE TAX TREATY in force (1956). Finland is one of the small group of countries with a Swiss inheritance treaty.

Finland also has inheritance tax treaties with Denmark, Iceland, Norway, Sweden, France, the Netherlands, Switzerland and the US.

OSAKESAASTOTILI (Equity Savings Account) — introduced 2020. A wrapper for LISTED SHARES ONLY (Finnish and foreign; NOT funds or ETFs). No tax on trades, no tax on dividends received inside the account. Tax arises only on WITHDRAWAL, and only on the proportionate gain, at 30%/34%. Losses are deductible when the account is closed. The contribution cap was EUR 50,000 and was RAISED TO EUR 100,000 (verify the current ceiling and effective date). Foreign dividend withholding tax is NOT creditable inside the account — a real cost for a foreign-heavy portfolio, and the main argument for holding foreign dividend payers outside it.

KAPITALISAATIOSOPIMUS AND SIJOITUSVAKUUTUS (capitalisation agreement and investment insurance wrapper) — the principal Finnish deferral vehicle for larger portfolios. Assets inside grow gross: no tax on switching between funds, no tax on dividends, no tax on realised gains. Tax arises only on withdrawal. SINCE 2020 withdrawals are PRO-RATED between return of capital and taxable gain (previously capital came out first, which allowed years of tax-free withdrawals — that advantage is gone, but the internal gross roll-up remains). A capitalisation agreement has no life-insured and so can be held by a company or transferred; an investment insurance policy has a named beneficiary and passes outside the estate administration (though it remains subject to inheritance tax).

VOLUNTARY PENSION INSURANCE: contributions deductible against capital income up to EUR 5,000 per year, but access is restricted to the statutory retirement age and the regime was made much less attractive by the 2013 reforms. Modest.

No general net wealth tax on financial assets.

AIMI (Adicional ao Imposto Municipal sobre Imoveis) — an additional property tax on PORTUGUESE REAL ESTATE ONLY, levied on the taxpayer's aggregate registered (VPT) value of Portuguese urban residential property and building land:

• 0.7% on the value between EUR 600,000 and EUR 1,000,000
• 1.0% between EUR 1,000,000 and EUR 2,000,000
• 1.5% above EUR 2,000,000

The EUR 600,000 allowance is per person, so a married couple filing jointly has EUR 1,200,000 of exempt value. Companies pay 0.4% with no allowance (7.5% for entities in blacklisted jurisdictions).

Ordinary IMI of 0.3%-0.45% applies below that.

FINANCIAL PORTFOLIOS ARE ENTIRELY OUTSIDE ANY PORTUGUESE WEALTH TAX. There is no securities account tax, no financial transaction tax and no annual charge on investments.

28% AUTONOMOUS FLAT RATE on gains from securities, funds, derivatives and crypto, for Portuguese tax residents. 35% where the counterparty or the asset is connected with a BLACKLISTED jurisdiction.

THE SHORT-TERM PENALTY (introduced 2023, Law 24-D/2022): AGGREGATION AT PROGRESSIVE RATES IS MANDATORY, rather than optional, where BOTH of the following apply:

• (i) the securities were held for LESS THAN 365 DAYS, AND
• (ii) the taxpayer's total taxable income places them in the TOP IRS BRACKET (taxable income above roughly EUR 83,700).

In that case the gain is taxed at the marginal rate of up to 48%, PLUS the solidarity surcharge of 2.5% (EUR 80,000-250,000) or 5% (above EUR 250,000) — A TOP EFFECTIVE RATE OF 53%.

Held 365 DAYS OR MORE, the 28% flat rate remains available. THE ONE-YEAR HOLDING PERIOD IS THEREFORE WORTH UP TO 25 POINTS for a high earner.

OPTIONAL AGGREGATION: any taxpayer may ELECT to aggregate capital income at the progressive scale — worth doing only for low-income taxpayers, and it is a global, all-or-nothing election for the year.

LOSSES: capital losses offset capital gains of the same year. The excess carries forward FIVE YEARS, BUT ONLY IF THE TAXPAYER ELECTS AGGREGATION (englobamento) in both the loss year and the year of use — a procedural trap that regularly destroys loss relief. Losses arising from blacklisted jurisdictions are not deductible.

CRYPTO (from 2023): gains on crypto held LESS THAN 365 DAYS are taxed at 28%; gains on crypto held 365 DAYS OR MORE ARE EXEMPT (for tokens that are not securities). Crypto received as staking or mining rewards is business or capital income. This remains one of the most favourable crypto regimes in the EU.

ASSETS OUTSIDE THE CHARGE: Article 10 of the CIRS lists the categories of taxable capital gain — real estate, shares and other securities, derivatives, intellectual property, and crypto-assets. PHYSICAL GOLD, ART, ANTIQUES, CLASSIC CARS, WINE AND OTHER MOVABLE PROPERTY ARE NOT LISTED AND ARE THEREFORE NOT TAXABLE ON DISPOSAL BY A PRIVATE INDIVIDUAL. This is unusual and valuable, and it means Portugal is one of the best places in the EU to hold physical precious metals and collectibles.

REAL ESTATE: 50% of the gain is taxable at progressive rates (up to 48% + surcharge, so effectively up to 26.5%); full exemption on reinvestment of the proceeds from a principal residence into another EU/EEA principal residence.

28% FLAT WITHHOLDING, final (35% from blacklisted jurisdictions). Applies to bank deposit interest, bond coupons and similar.

Optional aggregation at progressive rates is available but rarely beneficial.

Portugal has no exempt savings accounts. Certificados de Aforro and Certificados do Tesouro (state savings products) are taxed at 28% like other interest.

28% FLAT WITHHOLDING, final (35% blacklisted). IDENTICAL TO INTEREST — no dividend preference under the flat regime.

IF THE TAXPAYER ELECTS AGGREGATION: dividends from EU/EEA companies (and Portuguese companies) subject to corporate tax benefit from a 50% EXCLUSION — only half the dividend is taxed at the progressive rate. For a taxpayer in the 35% bracket this gives an effective 17.5%, better than 28%. But the election is GLOBAL for all capital income that year, so it must be modelled against the taxpayer's gains and interest. For a top-bracket taxpayer (48% + 5% = 53%), 50% inclusion gives 26.5% — still marginally better than 28%, BUT aggregating also drags short-term gains and interest onto the progressive scale, so it is usually a losing trade for anyone with meaningful realised gains.

Foreign dividend withholding is credited up to the treaty rate.

NO INHERITANCE TAX AND NO GIFT TAX. Both were abolished in 2004.

WHAT REMAINS: IMPOSTO DO SELO (STAMP DUTY) at 10% on gratuitous transfers of PORTUGUESE-SITUS ASSETS (Portuguese real estate, shares in Portuguese companies, Portuguese bank deposits, movable property located in Portugal).

• SPOUSES, DESCENDANTS AND ASCENDANTS ARE FULLY EXEMPT. So transfers to a spouse, children, grandchildren or parents cost nothing at all.
• Only transfers to siblings, more distant relatives and unrelated persons bear the 10%.
• Real estate transfers additionally bear 0.8% stamp duty.

NON-PORTUGUESE ASSETS ARE ENTIRELY OUTSIDE THE CHARGE, regardless of the deceased's residence or the beneficiary's. A Portuguese resident with a EUR 50m offshore portfolio leaving it to children pays ZERO Portuguese transfer tax.

PORTUGAL IS THEREFORE ONE OF THE MOST FAVOURABLE SUCCESSION JURISDICTIONS IN EUROPE for direct-line transfers — comparable to Sweden, Austria and Estonia, and better than Italy's 4%.

Heirs take the value at death as their acquisition cost for the 28% capital gains tax (an effective step-up for inherited securities where a value is established).

FORCED HEIRSHIP: Portuguese civil law reserves a legitima (typically one-half to two-thirds) for the spouse and descendants. EU Succession Regulation 650/2012 allows an election of the law of nationality in a will — essential for common-law clients.

UNITED STATES: INCOME TAX TREATY in force (1994 — 5%/15% dividends, 10% interest).

NO US-PORTUGAL ESTATE OR GIFT TAX TREATY. Since Portugal levies no inheritance tax there is nothing to credit; a Portuguese resident holding US-situs shares is fully exposed to US estate tax at 40% over a $60,000 exemption. USE IRISH-DOMICILED UCITS ETFs.

SWITZERLAND: INCOME TAX TREATY in force (1974, Protocol 2012 — 0%/5%/15% dividends, 0%/10% interest). No inheritance treaty.

Portugal has around 80 income tax treaties. Note that the NHR regime's exemptions depend on income being "capable of being taxed" in the source state under an applicable treaty (or under the OECD Model where no treaty exists), so the treaty network is directly load-bearing for that regime.

NHR — NON-HABITUAL RESIDENT (SPECIAL REGIME, CLOSED TO NEW ENTRANTS). Applications closed on 31 December 2023, with transitional entry through 2024 (and into 2025 for those with qualifying prior commitments such as a signed lease, an employment contract, a residence visa application or a property purchase before 31 December 2023). EXISTING NHRs KEEP THE STATUS FOR THE BALANCE OF THEIR 10 YEARS.

Under NHR: foreign-source DIVIDENDS, INTEREST, CAPITAL GAINS ON REAL ESTATE, ROYALTIES AND RENTS are EXEMPT in Portugal, provided they may be taxed in the source state under the applicable treaty and the source is not blacklisted. Foreign PENSIONS taxed at 10%. Portuguese-source "high value added" employment income at 20%.

IMPORTANT LIMIT: foreign-source CAPITAL GAINS ON SECURITIES are NOT exempt under NHR — under the OECD Model, gains on shares are taxable only in the state of residence, so Portugal retains the right and charges 28%. This is the single most-misunderstood point about NHR.

IFICI / "NHR 2.0" (Incentivo Fiscal a Investigacao Cientifica e Inovacao, Art. 58-A EBF) — THE REPLACEMENT, available from 2024 with the registration procedure regulated during 2025. For individuals becoming Portuguese resident who have not been resident in the previous 5 years AND who work in a qualifying activity (higher education and scientific research, certified startups, industrial and service companies with recognised investment or export activity, and roles certified by AICEP/IAPMEI or the Agency for Innovation):

• 20% FLAT RATE on Portuguese employment and self-employment income from the qualifying activity.
• EXEMPTION for FOREIGN-SOURCE income including EMPLOYMENT, self-employment, DIVIDENDS, INTEREST, RENTS, ROYALTIES AND CAPITAL GAINS (a broader capital gains exemption than NHR gave).
• PENSIONS ARE EXCLUDED — foreign pensions are taxed at the ordinary progressive rates, unlike under NHR.
• 10 years, non-renewable.

For a mobile investor with employment substance in a qualifying Portuguese activity, IFICI is potentially better than NHR was on the investment side, because it exempts foreign capital gains.

PPR (PLANO POUPANCA REFORMA): contributions attract a 20% TAX CREDIT capped at EUR 400 (under 35), EUR 350 (35-50) or EUR 300 (over 50) per year — so the maximum benefit is EUR 400 on a EUR 2,000 contribution. Returns are taxed at 8% (rather than 28%) if withdrawn under the qualifying conditions (age 60, 5 years of holding, retirement, long-term unemployment, serious illness), or 21.5% otherwise, with a clawback of the credits on non-qualifying withdrawal. The 8% exit rate is the real attraction.

PORTUGUESE-COMPLIANT INSURANCE WRAPPERS / SEGUROS DE CAPITALIZACAO / UNIT-LINKED: gross roll-up inside the policy with no tax on switching, and a REDUCED EFFECTIVE RATE ON EXIT based on the holding period, provided at least 35% of the total premiums were paid in the FIRST HALF of the contract term:

• Held less than 5 years: 28% on the full gain
• Held 5 to 8 years: only 4/5 of the gain is taxed => 22.4% effective
• Held MORE THAN 8 YEARS: only 2/5 of the gain is taxed => 11.2% EFFECTIVE

This is a 16.8-point rate reduction on top of full deferral, and it is the most valuable mainstream planning tool for Portuguese-resident investors who are not on NHR or IFICI.

No net wealth tax on financial assets.

ENFIA (Unified Property Tax) applies to Greek real estate. Since the 2022 reform the former separate "supplementary" wealth levy on property above EUR 250,000 has been folded into the main ENFIA calculation, which combines a basic per-square-metre charge with an additional charge on portfolios of property above roughly EUR 400,000 of total value, at rates rising to about 1.0%-1.15% at the top. Insured properties receive a discount (10%-20%).

No securities account tax. A SALES DUTY applies to disposals of shares listed on the Athens Exchange: reduced from 0.2% to 0.1% with effect from 1 April 2025, with abolition signalled — verify. This is a transaction cost, not a wealth tax, and applies to the SELLER on the sale value.

THE HEADLINE POINT: GAINS ON LISTED SHARES ARE LARGELY EXEMPT FOR PORTFOLIO INVESTORS.

Under Article 42 of the Greek Income Tax Code, the transfer of shares LISTED ON A REGULATED MARKET is EXEMPT from the 15% capital gains tax where the seller holds LESS THAN 0.5% of the company's share capital, for shares acquired on or after 1 January 2009. A holding of 0.5% or more is taxable at 15%. In practice this means a diversified portfolio of Athens-listed equities generates NO Greek capital gains tax at all — only the 0.1% sales duty.

The exemption's application to FOREIGN-listed shares has been the subject of differing practice; the safer working assumption is that gains on foreign securities are TAXABLE AT 15%, and this is how most Greek practitioners report them. CONFIRM FOR THE SPECIFIC CASE AND MARKET.

OTHER GAINS: 15% flat on transfers of unlisted shares, partnership interests, bonds, derivatives and Greek treasury bills. Separately reported; no progressive scale.

LOSSES: losses from transfers of securities may be carried forward FIVE YEARS and offset only against gains of the same category. Losses cannot offset interest, dividends or other income.

CRYPTO: Greece has no dedicated crypto regime; gains are in principle capital gains at 15%, though administrative guidance has been limited. Draft rules have been in preparation — verify.

GOLD, ART AND COLLECTIBLES: no specific charging provision for occasional private disposals; gains by a private individual are generally not taxed unless the activity is a business. Treat as a grey area and document collector intent.

REAL ESTATE: the 15% capital gains tax on real estate transfers has been SUSPENDED repeatedly and remains suspended through at least 2026 — verify the current position, but Greek real estate gains have effectively been untaxed for over a decade.

15% FLAT WITHHOLDING, final, on deposit interest, bond coupons and similar. Withheld by Greek payers; foreign interest self-assessed at 15% with a credit for foreign withholding.

Interest on Greek government bonds and treasury bills held by individuals is exempt in certain cases — verify the specific instrument.

Plus, note that Greek social solidarity contributions on investment income were abolished; the 15% is generally the whole charge.

5% FLAT WITHHOLDING — reduced from 10% to 5% with effect from 2020 and among the LOWEST DIVIDEND TAX RATES IN THE ENTIRE EUROPEAN UNION.

THIS IS A GENUINE AND LARGE PREFERENCE: 5% ON DIVIDENDS VERSUS 15% ON INTEREST — a 10-point advantage, and one of the very few places in this table where dividends are taxed at one-third the rate of interest.

Final withholding for Greek-source dividends. Foreign dividends are self-assessed at 5% with a credit for foreign withholding tax up to the Greek liability. NOTE THE PRACTICAL CONSEQUENCE: because the Greek rate is only 5%, foreign withholding tax of 15% (US), 26.375% (Germany) or 30% (France before reclaim) CANNOT BE FULLY CREDITED — the excess is a dead-weight cost. A Greek resident's after-tax return on foreign dividends is therefore governed by the SOURCE country's withholding rate, not by the 5% Greek rate, and treaty reclaims matter enormously.

THE PORTFOLIO CONCLUSION: Greek residents should (i) strongly prefer DIVIDENDS to INTEREST in the domestic market (5% versus 15%), (ii) prefer GREEK and treaty-reclaimable dividends over high-withholding foreign dividends, and (iii) note that accumulating foreign ETFs do not help, because the fund-level withholding is suffered regardless while the 5% Greek rate is forgone.

AMONG THE MOST GENEROUS INHERITANCE TAX REGIMES IN THE EU FOR CLOSE FAMILY.

CATEGORY A (spouse, children, grandchildren, parents): a TAX-FREE ALLOWANCE OF EUR 800,000 PER BENEFICIARY, then 1% on the next EUR 100,000, 5% on the next EUR 200,000, and 10% above. A surviving spouse of at least 5 years and minor children receive an additional EUR 400,000 exemption.

CATEGORY B (great-grandchildren, siblings, uncles/aunts, nephews/nieces, step-relations, parents-in-law): EUR 30,000 allowance, then 5% / 10% / 20%.

CATEGORY C (all others): EUR 6,000 allowance, then 20% / 30% / 40%.

PARENTAL GIFTS (goniki parochi) and GIFTS to Category A recipients: since 1 October 2021, gifts of MONEY OR ASSETS from parents to children (and to other Category A beneficiaries) are TAX-FREE UP TO EUR 800,000 per beneficiary. Cash gifts must be made through the banking system to qualify. This allowance is cumulative with inheritances from the same donor — it is a single lifetime EUR 800,000 per donor-donee pair, not a separate gift allowance.

A parent with two children can therefore transfer EUR 1,600,000 free of tax during life or at death, and each parent has their own allowance — so a couple with two children can pass EUR 3,200,000 tax-free, and the excess at only 1%-10%.

Real estate transfers additionally bear transfer tax (3%) or, for a first home, an exemption.

No step-up issue arises for listed shares given the exemption; for taxable assets the inheritance value becomes the acquisition cost.

UNITED STATES: INCOME TAX TREATY in force — BUT IT DATES FROM 1950 AND IS ONE OF THE OLDEST AND WEAKEST US TREATIES STILL IN OPERATION. Critically, IT CONTAINS NO REDUCED RATE FOR DIVIDENDS, so US-source dividends paid to a Greek resident suffer THE FULL 30% STATUTORY US WITHHOLDING TAX, not the usual 15%. Interest and royalties are relieved. There is no limitation-on-benefits article, no arbitration and no modern exchange-of-information provision.

THIS IS A MATERIAL AND OFTEN-MISSED PLANNING POINT: a Greek resident holding US dividend-paying shares directly loses 30% of every dividend, against which the 5% Greek tax gives no relief at all. THE FIX IS TO HOLD US EQUITY EXPOSURE THROUGH AN IRISH-DOMICILED UCITS ETF, which suffers only 15% at fund level under the US-Ireland treaty — an immediate 15-point improvement on the dividend stream.

US-GREECE ESTATE TAX TREATY in force (1950) — situs and credit relief, which does at least mitigate the 40%/$60,000 exposure on US-situs assets.

SWITZERLAND: INCOME TAX TREATY in force (1983, Protocol 2010 — 5%/15% dividends, 7%/10% interest). No inheritance treaty.

GREECE'S PLANNING ARCHITECTURE IS BUILT ON SPECIAL RESIDENCE REGIMES RATHER THAN ON DEFERRAL VEHICLES. There are three, and they are among the most competitive in Europe.

ARTICLE 5A — NON-DOM LUMP SUM FOR HIGH-NET-WORTH INDIVIDUALS. An individual who has not been Greek tax-resident for 7 of the previous 8 years, and who INVESTS AT LEAST EUR 500,000 in Greek real estate, businesses or securities within three years (waived for holders of a Greek golden visa), may elect to pay a FLAT EUR 100,000 PER YEAR covering ALL FOREIGN-SOURCE INCOME AND GAINS, for up to 15 YEARS. Additional family members: EUR 20,000 each per year.

• Foreign income is exempt from Greek tax and from any reporting of the underlying.
• ELECTORS ARE ALSO EXEMPT FROM GREEK INHERITANCE AND GIFT TAX ON FOREIGN ASSETS.
• No credit for foreign tax is given, and no unused portion is refunded.

At EUR 100,000 this is HALF the price of the Italian regime (EUR 200,000) and comparable to the Swiss forfait, with EU membership, and a 15-year term.

ARTICLE 5B — FOREIGN PENSIONERS: 7% FLAT TAX on ALL foreign-source income (not just pensions — dividends, interest, gains and rents included) for individuals with a foreign pension who transfer residence to Greece from a country with a treaty or administrative cooperation agreement. 15 years. No minimum investment. For a retiree with EUR 500,000 of annual foreign investment income, this is EUR 35,000 versus EUR 100,000 under Article 5A — so 5B is better below roughly EUR 1.43m of foreign income, and 5A better above it.

ARTICLE 5C — IMPATRIATES AND RETURNING PROFESSIONALS: 50% EXEMPTION of Greek-source employment and business income for 7 years, for individuals who transfer residence from an EU/EEA or treaty state, take up employment or start a business in Greece, and commit to stay 2 years. Requires 5 of the previous 6 years of non-Greek residence.

DOMESTIC VEHICLES (limited):

• OCCUPATIONAL INSURANCE FUNDS (TEA): employer and employee contributions deductible within limits; investment returns untaxed inside the fund; benefits taxed at 10% for a lump sum and 5%-15% for periodic payments (rates reduce with the length of participation). The main Greek deferral vehicle.
• PRIVATE INSURANCE AND GROUP PENSION CONTRACTS: contributions may qualify for limited relief; returns inside the contract are not taxed until payment.
• The low headline rates (5% dividends, 0% listed share gains) mean that for a Greek-focused portfolio, no wrapper is needed.

No net wealth tax. Local building and land taxes are set by municipalities and are modest. There is no securities account tax and no financial transaction tax on retail securities purchases (though Hungary levies a financial transaction duty on payment transfers, extended in 2024-2025 to certain currency conversions and securities transactions by payment service providers — verify whether it reaches a given client's brokerage flows).

15% FLAT PERSONAL INCOME TAX on capital gains — one of the lowest headline rates in the EU and a genuinely simple system.

THE KEY STRUCTURAL FEATURE — "CONTROLLED CAPITAL MARKET TRANSACTIONS" (ellenorzott tokepiaci ugylet, "ETU"): transactions executed through an investment firm authorised in the EU/EEA or a treaty state, on a regulated market, are taxed under a favourable regime:

• ALL GAINS AND LOSSES ACROSS ALL ETU TRANSACTIONS IN THE YEAR ARE NETTED, including gains and losses on shares, bonds, funds, ETFs, futures, options and CFDs.
• The net gain is taxed at 15%.
• CRUCIALLY, ETU GAINS ARE NOT SUBJECT TO THE 13% SOCIAL CONTRIBUTION TAX (szocho) — unlike dividends and interest.
• LOSS CARRYBACK ("adokiegyenlites"): a net loss may be carried BACK TWO YEARS and set against ETU gains already taxed in those years, generating a REFUND of tax already paid. This two-year carryback is unusual in Europe and genuinely valuable.

Transactions NOT executed through a qualifying intermediary fall outside the ETU regime, are taxed gain-by-gain with no netting, and MAY attract the 13% szocho. THE CHOICE OF BROKER IS THEREFORE DECISIVE IN HUNGARY.

OTHER ASSETS: gains on movable property (gold, art, collectibles) are taxed at 15% on the gain, but only to the extent annual proceeds exceed HUF 600,000, and only 75% of the gain is taxable in some cases — private disposals below the threshold are exempt. Real estate: 15%, with the taxable gain reduced by 30%/60%/90% in years 2, 3 and 4 respectively and EXEMPT AFTER 5 YEARS.

CRYPTO: since 2022, a favourable dedicated regime — net annual crypto gains taxed at 15% with NO szocho, with a two-year loss carryback, and a de minimis exemption where the gain from a transaction is under 10% of the minimum wage and total annual such gains are under the minimum wage.

15% PERSONAL INCOME TAX, plus — since 1 July 2023 — a 13% SOCIAL CONTRIBUTION TAX (szocho) on interest income, giving a combined 28%. The szocho on investment income is subject to an annual cap (24x the minimum wage across all szocho-bearing income), so very large interest receipts are effectively capped.

The 13% levy on interest was introduced as a temporary "extra profit" measure and has been extended repeatedly — verify whether it remains in force for the relevant year.

HUNGARIAN GOVERNMENT SECURITIES: retail Hungarian government bonds (such as the MAP Plusz and its successors) have historically been exempt from both the 15% PIT and the szocho, or taxed at a reduced rate, as a matter of policy. The treatment has changed more than once — VERIFY THE CURRENT STATUS FOR THE SPECIFIC INSTRUMENT, because the difference between 0% and 28% on a large fixed income allocation is very large.

NOTE THE ASYMMETRY: interest at up to 28% versus ETU capital gains at 15% (no szocho) is a 13-point spread favouring capital appreciation.

15% PERSONAL INCOME TAX plus 13% SOCIAL CONTRIBUTION TAX (szocho) = 28%, subject to the same annual szocho cap (24x the minimum wage of szocho base across all sources — so the szocho stops accruing once the cap is reached, after which dividends are taxed at 15% only).

NO PREFERENCE VERSUS INTEREST — both bear 15% + 13%. But BOTH ARE WORSE THAN ETU CAPITAL GAINS, which bear 15% with no szocho.

Foreign dividends: 15% Hungarian PIT with a credit for foreign withholding tax (capped at the Hungarian liability, and with a minimum 5% Hungarian tax payable regardless), plus szocho where applicable.

THE PORTFOLIO CONCLUSION: Hungarian investors should hold ACCUMULATING funds and low-yield growth equities within the ETU regime, converting what would be 28%-taxed dividend income into 15%-taxed (or, inside a TBSZ, 0%-taxed) capital gain. Once the szocho cap is reached the gap narrows to zero, so the analysis differs for very large portfolios.

INHERITANCE AND GIFT TAX at a general rate of 18%, or 9% for residential property.

BUT: SPOUSES, REGISTERED PARTNERS, AND ALL RELATIVES IN THE DIRECT LINE (children, grandchildren, parents, grandparents) AND SIBLINGS ARE COMPLETELY EXEMPT from both inheritance and gift tax, without limit, since 2013.

In practice, therefore, Hungary is a ZERO wealth-transfer-tax jurisdiction for family succession. The 18% applies only to transfers to unrelated persons and more distant relatives.

Other exemptions: gifts of movable property below HUF 150,000; inheritances of movable property below HUF 300,000; residential property inherited by a person under 18 (with a payment deferral).

No step-up in basis: heirs take the deceased's acquisition cost for the 15% capital gains tax. Given the exemptions and the low rate, this is rarely a material issue.

UNITED STATES — CRITICAL: THE US-HUNGARY INCOME TAX TREATY WAS TERMINATED BY THE UNITED STATES. Notice was given on 8 July 2022; the treaty ceased to have effect FOR WITHHOLDING TAXES FROM 1 JANUARY 2024 and for other taxes for taxable periods beginning on or after 1 January 2024.

CONSEQUENCES, WHICH ARE SEVERE AND OFTEN OVERLOOKED:

• US-source DIVIDENDS paid to a Hungarian resident now suffer the FULL 30% STATUTORY US WITHHOLDING TAX (up from 15% under the old treaty).
• US-source INTEREST loses its treaty exemption in many cases (though the domestic portfolio interest exemption still applies to most bond interest).
• There is no treaty relief, no LOB, no mutual agreement procedure and no arbitration.
• Hungary gives a credit for the US tax, but the Hungarian rate is only 15% plus szocho, so a large part of the 30% is unrelievable.

THE FIX: hold US equity exposure exclusively through IRISH-DOMICILED UCITS ETFs, which continue to benefit from the US-Ireland treaty rate of 15% at fund level. FOR HUNGARIAN CLIENTS THIS IS WORTH A FULL 15 PERCENTAGE POINTS OF THE US DIVIDEND STREAM AND SHOULD BE TREATED AS URGENT.

NO US-HUNGARY ESTATE OR GIFT TAX TREATY (there never was one).

SWITZERLAND: INCOME TAX TREATY in force (2013, replacing the 1980 treaty — 0%/15% dividends, 0% interest). No inheritance treaty.

TBSZ (TARTOS BEFEKTETESI SZAMLA / LONG-TERM INVESTMENT ACCOUNT) — THE SINGLE MOST POWERFUL AND SIMPLEST RETAIL TAX SHELTER IN THE EUROPEAN UNION.

• Open an account with a Hungarian investment firm and make deposits during a single "collection year". From 1 January of the following year the holding period runs.
• HELD 3 FULL YEARS: the tax rate on ALL gains, dividends and interest inside the account drops to 10% (and no szocho).
• HELD 5 FULL YEARS: THE RATE IS ZERO. No personal income tax, no social contribution tax, on any income or gain of any kind earned in the account.
• Withdrawn before 3 years: 15% plus szocho where applicable, as normal.
• NO CONTRIBUTION LIMIT. There is no annual cap and no lifetime cap.
• Unlimited trading inside the account during the term; only withdrawals matter.
• A new TBSZ can be opened every year, creating a rolling ladder of 5-year buckets.

Because there is no contribution limit, a Hungarian investor can in principle shelter an ENTIRE PORTFOLIO of any size at a 0% rate after five years. Nothing else in this table matches it for simplicity or scale.

Note: the 2025 Hungarian government proposed changes affecting TBSZ (including a possible szocho on withdrawals from accounts opened after a certain date) — VERIFY THE CURRENT RULES, as this is a politically active area.

NYESZ (Nyugdij-elotakarekossagi szamla / retirement savings account): a 20% TAX CREDIT on annual contributions, capped at HUF 100,000 (or HUF 130,000 for those retiring after 2020), refunded from the taxpayer's PIT. Tax-free on withdrawal at retirement after 10 years. Smaller than TBSZ but the credit is free money.

VOLUNTARY PENSION FUND (onkentes nyugdijpenztar): 20% tax credit capped at HUF 150,000 per year, tax-free investment returns, tax-free benefits after 10 years of membership.

HEALTH AND MUTUAL AID FUNDS: a further 20% credit, with a combined cap of HUF 280,000 across all three vehicles.

No net wealth tax. Property tax is area-based and set by municipalities; very low. No securities account tax. A financial transaction tax on business payments was introduced in 2025 but does not apply to individuals' personal accounts — verify scope for clients operating through a Slovak company.

SLOVAKIA OFFERS A FULL EXEMPTION FOR LONG-HELD LISTED SECURITIES, AND EXTENDED IT SIGNIFICANTLY IN 2025.

EXEMPT:

• Gains on SECURITIES ADMITTED TO TRADING ON A REGULATED MARKET (an EU/EEA regulated market or an equivalent foreign market) HELD FOR MORE THAN ONE YEAR: FULLY EXEMPT from personal income tax. This has been the position since 2016 and is the cornerstone of Slovak portfolio planning.
• FROM 1 JANUARY 2025: gains on NON-LISTED shares and business interests (s.r.o. participations) HELD FOR MORE THAN THREE YEARS are also exempt — a major extension for founders and business owners.
• Gains on VIRTUAL CURRENCY held more than one year: taxed at 7% (reduced from ordinary rates by the 2023 reform effective 2024), with an additional exemption for the first EUR 2,300 of annual income from crypto.
• "Other income" de minimis: the first EUR 500 per year of gains falling in the "other income" category is exempt.

TAXABLE (i.e. listed securities held one year or less, unlisted held three years or less):

• 19% on the tax base up to 176.8x the subsistence minimum (approximately EUR 48,400 for 2025)
• 25% above that

PLUS — and this is the critical additional cost — A 14% HEALTH INSURANCE LEVY on the taxable capital gain. Slovakia is one of very few EU states to apply health contributions to investment gains. The combined burden on a short-term gain is therefore 19% + 14% = 33%, or 25% + 14% = 39%.

The exempt categories above are NOT subject to the health levy either, so the one-year clock is worth 33 to 39 points, not merely 19 to 25.

LOSSES: capital losses may be offset against capital gains of the same type within the same tax year; there is NO LOSS CARRYFORWARD for individuals, and losses on exempt holdings are of course irrelevant.

OTHER ASSETS: gains on movable property (gold, art, collectibles) are generally exempt for private individuals unless the asset was used for business. Real estate: exempt after 5 years of ownership.

19% WITHHOLDING TAX, final, on Slovak bank deposit interest and bond coupons.

Foreign interest is included in the tax base at 19%/25% with a credit for foreign withholding.

The 14% health levy generally does NOT apply to interest that has borne final withholding tax.

NOTE THE SPREAD: interest at 19% versus 0% on listed securities held more than a year. A Slovak resident holding a bond portfolio pays 19%; the same total return delivered as capital appreciation on listed equities held over a year is untaxed. THIS IS ONE OF THE LARGEST INCOME-VERSUS-GROWTH DISTORTIONS IN THE EU.

SLOVAKIA HAS MOVED THIS RATE THREE TIMES IN THREE YEARS — verify carefully:

• 7% for profits from 2017 to 2023
• RAISED TO 10% for profits generated from 1 January 2024
• REDUCED BACK TO 7% for profits generated from 1 January 2025

The rate that applies depends on the ACCOUNTING PERIOD IN WHICH THE DISTRIBUTED PROFIT AROSE, not on the date of payment — so a 2024-profit dividend paid in 2026 still bears 10%.

7% (or 10%) IS A GENUINE AND LARGE PREFERENCE VERSUS 19% ON INTEREST — one of the widest dividend preferences in the EU, and the reverse of most of the countries in this table.

Foreign dividends from treaty states: 7%; from non-treaty and non-cooperating states: 35%.

Dividends are NOT subject to the health insurance levy (since 2017).

THE PORTFOLIO CONCLUSION IS UNUSUAL: in Slovakia, DIVIDENDS (7%) are cheaper than INTEREST (19%), and LONG-HELD LISTED CAPITAL GAINS (0%) are cheaper than both. The efficient Slovak taxable portfolio is listed equities held over a year, taking dividends at 7% and gains at 0%, with fixed income held only where necessary and preferably inside the third pillar.

NO INHERITANCE TAX AND NO GIFT TAX. Both were abolished with effect from 1 January 2004. Slovakia is a complete zero wealth-transfer-tax jurisdiction, with no reporting thresholds and no relationship distinctions.

Real estate transfers are subject only to nominal cadastral registration fees.

No step-up in basis: heirs take the deceased's acquisition cost. However, for INHERITED SECURITIES the holding period of the deceased is aggregated with the heir's for the one-year test in the direct line — so an inherited long-held listed position generally remains exempt. Confirm for the specific case.

Because there is no inheritance tax and long-held listed gains are exempt, a Slovak family can pass a listed equity portfolio between generations at ZERO total tax cost — one of the cleanest outcomes in this table.

UNITED STATES: INCOME TAX TREATY in force — the 1993 US-CZECHOSLOVAKIA treaty, which Slovakia succeeded to (5%/15% dividends, 0% interest). Functional but dated; no modern LOB or arbitration.

NO US-SLOVAKIA ESTATE OR GIFT TAX TREATY. Since Slovakia levies no inheritance tax there is nothing to credit; a Slovak resident holding US-situs shares faces 40% US estate tax over a $60,000 exemption with no relief. USE IRISH-DOMICILED UCITS ETFs FOR US EQUITY EXPOSURE.

SWITZERLAND: INCOME TAX TREATY in force (the 1997 treaty, Protocol 2011 — 0%/15% dividends, 0%/5% interest). No inheritance treaty.

Slovakia's deferral menu is thin, because the exemptions do the work. The one-year listed-securities exemption is worth more than any wrapper available domestically.

THIRD PILLAR (doplnkove dochodkove sporenie, DDS): employee contributions deductible up to EUR 180 per year — trivially small. Employer contributions are deductible for the company up to 6% of the employee's gross wage. Investment returns inside the fund are untaxed; benefits are taxed at 19% on the return component.

SECOND PILLAR (starobne dochodkove sporenie): a portion of mandatory social contributions is diverted to a personal account; auto-enrolment was reintroduced in 2023 and the contribution rate has been adjusted repeatedly. Untaxed accumulation.

THE PRIMARY "STRATEGY" IS THE ONE-YEAR HOLDING PERIOD, AND IT IS FREE. Secondary strategies:

• Ensure securities are traded on a REGULATED MARKET (an EU/EEA regulated market or an equivalent). Instruments traded only OTC or on an MTF may fall outside the exemption — check the venue, not just the issuer.
• Route Slovak business profits out as DIVIDENDS at 7% rather than as salary (which bears up to 25% PIT plus roughly 35% of combined social and health contributions).
• Use the 2025 three-year exemption for unlisted shares to plan the timing of a business sale.

No net wealth tax. Local property tax is levied on a tax valuation well below market at roughly 0.01%-0.45% depending on municipality, plus a garbage fee. Vehicle tax applies.

No securities account tax and no financial transaction tax.

NOTE: BULGARIA ADOPTED THE EURO ON 1 JANUARY 2026, at the fixed rate of BGN 1.95583 per euro. Amounts below are stated in the currency of the source legislation; convert at the fixed rate.

10% FLAT — Bulgaria has a uniform 10% flat personal income tax with no progression at all.

BUT THE MOST IMPORTANT FEATURE IS AN EXEMPTION, NOT A RATE:

UNDER ARTICLE 13(1)(3) OF THE PERSONAL INCOME TAX ACT, GAINS ON THE DISPOSAL OF SHARES, UNITS IN COLLECTIVE INVESTMENT SCHEMES, AND OTHER FINANCIAL INSTRUMENTS EXECUTED ON A REGULATED MARKET IN BULGARIA OR IN ANOTHER EU/EEA MEMBER STATE ARE FULLY EXEMPT FROM TAX — regardless of holding period and regardless of amount.

• This covers shares listed on any EU/EEA regulated market and, importantly, UCITS ETFs and fund units traded on those markets, as well as redemptions of units in EU/EEA collective investment schemes.
• It does NOT cover instruments traded only on non-EU/EEA markets. Gains on shares listed on the NYSE, NASDAQ, LSE (post-Brexit), SIX Swiss Exchange or other third-country venues are TAXABLE AT 10%.

THE PRACTICAL CONSEQUENCE IS DIRECT AND LARGE: a Bulgarian resident who buys a global equity ETF listed on Xetra, Euronext or Borsa Italiana pays ZERO capital gains tax; the same economic exposure bought as US-listed shares or a US-listed ETF pays 10%. THE CHOICE OF LISTING VENUE IS WORTH THE ENTIRE TAX.

TAXABLE GAINS (non-EU/EEA venues, unlisted shares, other assets): 10% on the annual net gain. Losses within the year offset gains; THERE IS NO LOSS CARRYFORWARD for individuals.

OTHER ASSETS: gains on movable property sold by a private individual are exempt in most cases (including one property and one vehicle per year under conditions). Real estate: one residential property per year is exempt if held over 3 years; up to two other properties if held over 5 years; otherwise 10% on the gain, with a 10% statutory expense allowance.

CRYPTO: taxable at 10% on the annual net gain (crypto is not a "financial instrument on a regulated market" for the Article 13 exemption).

GOLD AND ART: private disposals of movable property are generally exempt.

8% FINAL WITHHOLDING TAX on interest from BULGARIAN BANK DEPOSITS (and deposits with EU/EEA banks) held by resident individuals — a special reduced rate.

10% on other interest, including bond coupons from non-exempt sources.

INTEREST ON BULGARIAN AND EU/EEA GOVERNMENT BONDS AND ON BONDS TRADED ON AN EU/EEA REGULATED MARKET IS EXEMPT in defined circumstances — verify the specific instrument, but the exemption for income from disposals is clearer than for coupons.

So: deposits 8%, most other interest 10%.

5% FINAL WITHHOLDING TAX — one of the LOWEST DIVIDEND RATES IN THE EUROPEAN UNION, alongside Greece.

A GENUINE PREFERENCE VERSUS INTEREST (8%-10%) AND VERSUS TAXABLE CAPITAL GAINS (10%) — though not versus EXEMPT EU/EEA-listed gains (0%).

Foreign dividends are self-assessed at 5% with a credit for foreign withholding tax up to the Bulgarian liability. BECAUSE THE BULGARIAN RATE IS ONLY 5%, FOREIGN WITHHOLDING OF 15% (US), 26.375% (Germany) OR 30% (France before reclaim) IS LARGELY UNRELIEVABLE — the excess is a permanent cost, and the effective rate on foreign dividends is set by the source state, not by Bulgaria.

THE COMBINED PORTFOLIO CONCLUSION IS UNUSUALLY CLEAN: a Bulgarian resident should hold ACCUMULATING UCITS ETFs LISTED ON AN EU/EEA REGULATED MARKET. Such a vehicle (i) generates no distributions, so the 5% dividend tax and the unrelievable foreign withholding at investor level never arise, and (ii) produces gains that are entirely EXEMPT under Article 13(1)(3). THE RESULT IS A ZERO PERSONAL TAX RATE ON THE ENTIRE INVESTMENT RETURN, with only the fund-level withholding (15% on US dividends via an Irish domicile) as leakage. Very few structures in this table achieve that.

INHERITANCE TAX (danak varhu nasledstvata) is levied by MUNICIPALITY on the recipient, and is very low:

• SPOUSE AND DIRECT-LINE RELATIVES (children, grandchildren, parents): FULLY EXEMPT, without limit.
• SIBLINGS AND THEIR CHILDREN: 0.4% to 0.8% (the municipality sets the rate within this band) on the share exceeding BGN 250,000.
• ALL OTHERS: 3.3% to 6.6% on the share exceeding BGN 250,000.

GIFT TAX: similarly municipal, at 0.4%-0.8% between siblings and their children, and 3.3%-6.6% between unrelated persons. GIFTS BETWEEN SPOUSES AND IN THE DIRECT LINE ARE EXEMPT. Gifts of real estate additionally bear a 0.1%-3% property transfer tax set by the municipality.

Bulgaria is therefore effectively a zero wealth-transfer-tax jurisdiction for family succession, and a very low-cost one otherwise.

No step-up in basis; heirs take the deceased's acquisition cost. Given the EU/EEA-listed exemption and the 10% flat rate, this is rarely material.

UNITED STATES: INCOME TAX TREATY in force (signed 2007, effective 2009, with a 2008 protocol — 5%/10% dividends, 5% interest with exemptions, and a full limitation-on-benefits article). A modern treaty.

NO US-BULGARIA ESTATE OR GIFT TAX TREATY. Since Bulgaria exempts direct-line inheritances there is nothing to credit; a Bulgarian resident holding US-situs shares faces 40% US estate tax over a $60,000 exemption with no relief. USE EU-LISTED IRISH-DOMICILED UCITS ETFs — which conveniently also secures the Article 13 capital gains exemption.

SWITZERLAND: INCOME TAX TREATY in force (the 2012 treaty replacing the 1991 agreement — 0%/5%/15% dividends, 0%/5% interest). No inheritance treaty.

Bulgaria has around 70 income tax treaties and participates fully in CRS and DAC.

Bulgaria's flat 10% and its EU/EEA-listed exemption mean that DEFERRAL VEHICLES ARE LARGELY UNNECESSARY. The domestic menu is correspondingly limited:

VOLUNTARY PENSION FUNDS (dobrovolno pensionno osiguriavane): personal contributions are DEDUCTIBLE from the taxable base up to 10% of annual taxable income. Employer contributions up to BGN 60 per month per employee are exempt from tax and social contributions. Investment returns inside the fund are untaxed; benefits are exempt if taken at retirement age, and taxed at 10% on early withdrawal (with a clawback of the deductions).

VOLUNTARY UNEMPLOYMENT AND LIFE INSURANCE: a further deduction of up to 10% of taxable income, with the same treatment.

Combined, these give up to 20% of income as a deduction — a meaningful relief at a 10% rate (worth 2% of income), and the untaxed internal accumulation is more valuable than the deduction.

THE PRIMARY STRATEGIES IN BULGARIA ARE STRUCTURAL RATHER THAN CONTRACTUAL:

• BUY EU/EEA-LISTED VEHICLES. Choosing a Xetra or Euronext listing of the same ETF over a US listing converts a 10% tax into 0%.
• USE ACCUMULATING SHARE CLASSES. This eliminates the 5% dividend tax and, more importantly, avoids the unrelievable foreign withholding tax at investor level.
• RELOCATION APPEAL: Bulgaria's 10% flat rate on income, 5% on dividends, 0% on EU-listed gains, no wealth tax and no direct-line inheritance tax make it one of the most attractive EU residences for an investor with no other constraints. There is no special "regime" to elect — the ordinary rules are the offer.

NO NET WEALTH TAX FOR INDIVIDUALS — abolished with effect from 2006.

BUT: a 0.5% NET WEALTH TAX (impot sur la fortune) DOES apply to LUXEMBOURG COMPANIES, including SOPARFI holding companies — 0.5% on net assets up to EUR 500m and 0.05% above, with a participation exemption for qualifying shareholdings. A MINIMUM net wealth tax also applies, restructured after the Constitutional Court's 2023 ruling into a schedule of EUR 535 / EUR 1,605 / EUR 4,815 depending on the company's balance sheet total (effective from 2025). This matters whenever a client holds a portfolio through a Luxembourg vehicle rather than personally.

The SPF (societe de gestion de patrimoine familial) is exempt from corporate income tax, municipal business tax AND net wealth tax, paying instead a 0.25% annual SUBSCRIPTION TAX on paid-up capital plus debt above an 8:1 ratio, capped at EUR 125,000 per year. For a large family portfolio this caps the annual entity-level charge at EUR 125,000 regardless of size.

Real estate: a modest municipal property tax on very outdated unitary values (reform legislated to take effect from 2026-2028; verify). A new "mobilisation tax" on undeveloped land and a national property tax reform are in train.

LUXEMBOURG HAS A SIX-MONTH — NOT ONE-YEAR — SPECULATION PERIOD, THE SHORTEST IN THE EUROPEAN UNION.

EXEMPT: gains on the disposal of SHARES, BONDS, FUNDS AND OTHER SECURITIES held for MORE THAN SIX MONTHS, where the holding is a "NON-SUBSTANTIAL PARTICIPATION" — i.e. the taxpayer (together with spouse and minor children) has held LESS THAN 10% of the issuer's capital at any time in the preceding five years. For any normal diversified portfolio this is automatic. GAINS ARE THEREFORE COMPLETELY TAX-FREE AFTER SIX MONTHS.

TAXABLE:

• SPECULATIVE GAINS (held SIX MONTHS OR LESS): taxed at the FULL PROGRESSIVE INCOME TAX SCALE, up to 42%, plus the employment fund surcharge of 7% (9% at the top bracket) = a maximum effective rate of about 45.8%. An annual exemption of EUR 500 (EUR 1,000 for jointly assessed couples) applies. Losses on speculative transactions may be offset only against speculative gains of the same year, with no carryforward.
• SUBSTANTIAL PARTICIPATIONS (10% or more) held MORE THAN six months: taxed at HALF THE GLOBAL RATE — a maximum effective rate of about 22.9% — with an allowance of EUR 50,000 (EUR 100,000 for a couple) per TEN-YEAR period. Held six months or less: full progressive rates.
• REAL ESTATE: gains on property held more than two years are taxed at half the global rate (max ~22.9%), with an allowance of EUR 50,000 per ten-year period and an inflation adjustment of the acquisition cost. A temporary quarter-rate applied in 2016-2018 and again during 2024.

THE SIX-MONTH CLIFF IS THEREFORE WORTH UP TO 45.8 PERCENTAGE POINTS, AND IT IS THE SHORTEST QUALIFYING PERIOD IN THE EU. It permits genuinely active portfolio management — semi-annual rebalancing is fully tax-free — while penalising short-term trading severely.

GOLD, ART AND COLLECTIBLES: treated as movable property; gains after six months are exempt, gains within six months are speculative and taxed at up to 45.8%. The same six-month rule applies to crypto-assets.

TWO REGIMES, AND THE DIFFERENCE IS LARGE:

• RELIBI (retenue liberatoire sur les interets): a 20% FINAL WITHHOLDING TAX on interest paid by a LUXEMBOURG paying agent to a Luxembourg-resident individual. Final — no further tax, no inclusion in the return. An annual exemption of EUR 250 per person applies.
• FOREIGN-SOURCE INTEREST paid by a paying agent ESTABLISHED IN ANOTHER EU MEMBER STATE (or EEA state): the taxpayer may ELECT the same 20% RELIBI treatment by filing form 210, rather than including the interest in the progressive base. WITHOUT THAT ELECTION, foreign interest is taxed at the FULL PROGRESSIVE SCALE UP TO ~45.8%.

Interest from a paying agent OUTSIDE the EU/EEA (for example a Swiss or US bank) CANNOT benefit from RELIBI and is taxed at up to 45.8%.

THIS IS A DECISIVE PRACTICAL POINT: A LUXEMBOURG RESIDENT SHOULD HOLD INTEREST-BEARING ASSETS THROUGH AN EU/EEA PAYING AGENT AND FILE THE RELIBI ELECTION. The difference is 20% versus 45.8% — nearly 26 points.

50% EXEMPTION (Article 115(15a) LIR): only HALF of a dividend from a qualifying company (a Luxembourg fully-taxable resident company, an EU parent-subsidiary-directive company, or a company resident in a treaty state and subject to a comparable tax) is included in taxable income, and the half is then taxed at the progressive scale — giving a MAXIMUM EFFECTIVE RATE OF ABOUT 22.9%.

PLUS a further exemption of EUR 1,500 per person (EUR 3,000 for a couple) of investment income.

Luxembourg withholding tax on domestic dividends is 15%, creditable.

COMPARISON:

• Dividends: max ~22.9% effective (with a 50% exemption).
• Interest via RELIBI: 20% flat.
• Interest without RELIBI: up to 45.8%.
• Capital gains after six months: 0%.

So dividends are preferentially taxed relative to non-RELIBI interest (by ~23 points) but marginally worse than RELIBI interest at the top of the scale. AND BOTH ARE MUCH WORSE THAN THE 0% ON GAINS AFTER SIX MONTHS.

THE PORTFOLIO CONCLUSION: Luxembourg residents should hold ACCUMULATING funds and low-yield growth equities, rebalance no more often than every six months and one day, and route any fixed income through an EU/EEA paying agent with the RELIBI election.

Foreign dividend withholding is creditable up to the treaty rate against the tax on the included half.

DROITS DE SUCCESSION — levied on the recipient, and structured very differently from most systems: TAX APPLIES ONLY TO THE EXCESS OVER THE INTESTATE SHARE.

DIRECT LINE (children, grandchildren): a child's INTESTATE SHARE (the portion they would receive under the default rules of succession) IS ENTIRELY EXEMPT. Only the amount left to a child ABOVE their intestate share is taxed, at 2.5% (if by an intestate/legal share arrangement) or 5% (if left by will), plus a progressive SURCHARGE (from 0.1x to 2.2x) based on the size of the individual share. In practice, an estate divided equally among children under the ordinary rules bears NO inheritance tax at all.

SURVIVING SPOUSE OR PARTNER WITH COMMON CHILDREN: FULLY EXEMPT.

Spouse or civil partner without common children: 5% on the amount exceeding their intestate share.

SIBLINGS: 6% (9% above the intestate share), plus surcharges.

UNCLES/AUNTS, NEPHEWS/NIECES: 9%/10%. GREAT-UNCLES ETC.: 10%/14%. UNRELATED: 15%, rising with the surcharge to an effective 48% on very large shares.

GIFTS must be made by NOTARIAL DEED to be valid for movable property, and bear registration duty of 1.8% (direct line) to 14.4% (unrelated) — so lifetime gifting is markedly MORE expensive than an ordinary bequest to children, which is free. THIS REVERSES THE USUAL EUROPEAN PLANNING LOGIC: in Luxembourg, LEAVE assets to children rather than gifting them.

Manual gifts (dons manuels) of movable property are possible without a deed but carry no proof and no fiscal certainty.

NON-RESIDENTS: only LUXEMBOURG REAL ESTATE is within the charge (droit de mutation par deces at 2%-14.4%). A non-resident's Luxembourg bank account or securities portfolio is NOT subject to Luxembourg inheritance tax — which is one reason the Grand Duchy is a booking centre.

UNITED STATES: INCOME TAX TREATY in force (1996; the 2009 PROTOCOL entered into force on 9 September 2019, adding full exchange of information — 5%/15% dividends, 0% interest, and a limitation-on-benefits article).

NO US-LUXEMBOURG ESTATE OR GIFT TAX TREATY. A Luxembourg resident holding US-situs shares is fully exposed to 40% US estate tax over a $60,000 exemption. USE IRISH-DOMICILED UCITS ETFs — or, given the local industry, Luxembourg-domiciled UCITS, though note these suffer 30% US withholding at fund level on US dividends versus 15% for an Irish fund, so IRISH DOMICILE IS BETTER FOR US EQUITY EXPOSURE EVEN FOR A LUXEMBOURG RESIDENT.

SWITZERLAND: INCOME TAX TREATY in force (1993, Protocols 2009 and 2012 — 0%/15% dividends, 0% interest). No inheritance treaty.

Luxembourg has around 85 income tax treaties. Its inheritance tax treaty network is essentially limited to France (1959).

LUXEMBOURG LIFE ASSURANCE (unit-linked, "assurance-vie luxembourgeoise") — the Grand Duchy is the leading EU centre for cross-border insurance wrappers, and the structure is used by clients across France, Italy, Spain, Belgium, Portugal and beyond as well as domestically. The distinguishing features:

• THE "TRIANGLE OF SECURITY": policyholder assets are held with an independent custodian approved by the CAA under a tripartite agreement, legally segregated from the insurer's own assets.
• THE "SUPER PRIVILEGE": policyholders rank as FIRST-RANKING preferred creditors ahead of all others, including the State, in an insurer insolvency — the strongest policyholder protection in Europe.
• PORTABILITY: a Luxembourg policy can generally follow the client to another country and be re-papered to that country's rules, so the wrapper survives a change of residence. FOR AN INTERNATIONALLY MOBILE CLIENT THIS IS THE DECISIVE ADVANTAGE OVER A DOMESTIC FRENCH, ITALIAN OR SPANISH CONTRACT.
• OPEN ARCHITECTURE: internal dedicated funds (FID/FAS) allow a discretionary mandate, direct lines, private equity, structured products and unlisted assets, subject to the CAA's asset-eligibility and diversification circulars (Circular 15/3), which are tiered by the size of the premium (types A to D, from EUR 125,000 to EUR 2.5m+).
• NO LUXEMBOURG WITHHOLDING TAX on the policy; taxation follows the POLICYHOLDER'S country of residence.

For a LUXEMBOURG RESIDENT specifically, gains inside the policy are not taxed and the surrender proceeds are generally outside the income tax net (a life policy is not a speculative transaction), while the death benefit passes under the succession rules above.

SPF (SOCIETE DE GESTION DE PATRIMOINE FAMILIAL): an unregulated family wealth management vehicle, exempt from corporate income tax, municipal business tax and net wealth tax, paying only the 0.25% subscription tax capped at EUR 125,000 per year. It may hold financial assets only (not real estate directly, and it may not carry on commercial activity). It cannot access treaty benefits or the parent-subsidiary directive — so foreign withholding tax is suffered at the statutory rate, which is the main drawback.

PENSION — ARTICLE 111bis LIR: contributions to a qualifying private pension plan are deductible up to EUR 3,200 PER YEAR PER PERSON (the age-banded limits were unified at EUR 3,200 from 2017). Benefits from age 60 (and no earlier than 10 years after the contract starts) are taxed at HALF THE GLOBAL RATE on a lump sum, or the annuity is exempt in part.

ARTICLE 111 LIR: a further deduction for premiums on death/life cover and for certain single-premium contracts — roughly EUR 672 per year per person plus increments for a spouse and each child.

OCCUPATIONAL PENSION (regime complementaire de pension): employer contributions are deductible for the company and taxed at a flat 20% levied at source on the employer, with the benefit then tax-free to the employee — the most efficient route for owner-managers and senior executives.

No net wealth tax. A municipal property tax on holiday homes and, from 2025, a new real estate tax replacing the former holiday-home charge, at EUR 0.60-8.00 per square metre depending on the municipality — applied to property that is not the owner's permanent residence and not long-term let. Financial assets are untouched.

Croatia adopted the euro on 1 January 2023; legacy kuna figures convert at HRK 7.53450 per euro.

The municipal surtax (prirez) was ABOLISHED from 1 January 2024 and folded into municipality-specific personal income tax rates, so the headline rates below already include the local element.

12% FLAT (raised from 10% with effect from 1 January 2024, when the surtax was abolished and rates were rebased).

THE KEY EXEMPTION: gains on the disposal of FINANCIAL ASSETS HELD FOR MORE THAN TWO YEARS ARE FULLY EXEMPT. The two-year clock runs from acquisition. This covers shares, bonds, fund units, ETFs and derivatives.

Gains on assets held TWO YEARS OR LESS are taxed at 12%, self-assessed on form JOPPD/annual return by the end of February following the year of disposal. Investors may also opt into an annual net-settlement basis.

LOSSES: losses on financial assets may be offset against gains on financial assets IN THE SAME CALENDAR YEAR, provided an annual return is filed. THERE IS NO LOSS CARRYFORWARD.

CRYPTO: treated as a financial asset — 12% if disposed of within two years, EXEMPT after two years. Croatia is one of the more favourable EU jurisdictions for long-held crypto.

OTHER ASSETS: gains on movable property (gold, art, collectibles) sold by a private individual outside a business are generally outside the scope. Real estate: 12% on gains from property sold within two years of acquisition (with exemptions for a principal residence and for property acquired by inheritance from a direct-line relative); exempt after two years.

NOTE: gains realised on the disposal of financial assets acquired before 1 January 2016 are exempt regardless of holding period (transitional rule).

12% FLAT WITHHOLDING on interest from bank deposits, savings and bonds. Final for Croatian-source interest.

Foreign interest is self-assessed at 12% with a credit for foreign withholding tax up to the Croatian liability.

Interest on Croatian government and municipal bonds and on corporate bonds is exempt in defined cases — verify the specific instrument, as Croatia has used bond-interest exemptions to support retail issuance.

12% FLAT WITHHOLDING (raised from 10% in 2024). IDENTICAL TO INTEREST — no dividend preference.

Foreign dividends: 12% with a credit for foreign withholding tax capped at the Croatian liability. Because the Croatian rate is only 12%, foreign withholding of 15% (US) or more is not fully creditable, and the excess is a permanent cost.

THE PORTFOLIO CONCLUSION: with a 12% rate on income and 0% on gains after two years, Croatian residents should hold ACCUMULATING funds and non-dividend-paying growth equities, and cross the two-year line before selling. On a 3%-yielding portfolio the annual saving from accumulation is 36 basis points, and the entire capital appreciation is exempt after two years.

INHERITANCE AND GIFT TAX at a FLAT 4% on movable property (including cash, securities and vehicles) with a value above EUR 6,700 (formerly HRK 50,000).

EXEMPT: the SPOUSE, DIRECT-LINE DESCENDANTS AND ASCENDANTS (children, grandchildren, parents, grandparents), and — since 2019 — also a common-law partner and, in some cases, siblings and their descendants where they lived with the deceased. In practice, transfers within the immediate family are FREE.

Real estate transfers bear a 3% real estate transfer tax, with the same family exemptions.

Croatia is therefore effectively a zero wealth-transfer-tax jurisdiction for close family, and a 4% jurisdiction otherwise.

No step-up in basis; heirs succeed to the deceased's acquisition date and cost — which is favourable here, since an inherited long-held position will already satisfy the two-year test.

UNITED STATES: the US-CROATIA INCOME TAX TREATY WAS SIGNED ON 7 DECEMBER 2023 — the first entirely new US bilateral income tax treaty signed in over a decade. CONFIRM ITS CURRENT RATIFICATION AND ENTRY-INTO-FORCE STATUS BEFORE RELYING ON IT; US treaty ratification requires Senate advice and consent and has historically been slow. Until it is in force, THERE IS NO US-CROATIA INCOME TAX TREATY, and US-source dividends paid to Croatian residents suffer the FULL 30% STATUTORY US WITHHOLDING TAX, against which the 12% Croatian tax gives limited credit. This is a live and material issue.

NO US-CROATIA ESTATE OR GIFT TAX TREATY.

SWITZERLAND: INCOME TAX TREATY in force (1999 — 5%/15% dividends, 5% interest). No inheritance treaty.

PRACTICAL CONSEQUENCE: until the US treaty is confirmed in force, Croatian residents should hold US equity exposure exclusively through IRISH-DOMICILED UCITS ETFs (15% withholding at fund level under the US-Ireland treaty), not through US-listed shares or funds. This is worth 15 percentage points of the US dividend stream and also removes the US estate tax exposure.

Croatia's low rates and the two-year exemption limit the need for deferral vehicles, and the domestic menu is modest.

THIRD PILLAR VOLUNTARY PENSION (dobrovoljno mirovinsko osiguranje): the state pays a direct incentive of 15% on contributions up to EUR 600 per year — a EUR 90 annual state contribution. Investment returns inside the fund are untaxed; benefits are taxed favourably (a lump sum of up to 30% is tax-free from age 55). Small in absolute terms but a guaranteed 15% return on the first EUR 600.

SECOND PILLAR: mandatory, 5% of gross salary, professionally managed, untaxed accumulation, with a choice of A/B/C risk categories (category A is the most equity-heavy and appropriate for younger members).

LIFE INSURANCE: premiums on life insurance and voluntary health insurance were deductible until 2010 and are no longer; investment returns inside a policy are not separately taxed, and payouts on life policies are generally exempt from income tax — so an insurance wrapper does provide gross roll-up, though the 0% rate on two-year holdings makes it largely redundant for equities.

THE PRIMARY STRATEGIES ARE STRUCTURAL AND FREE:

• HOLD FINANCIAL ASSETS PAST THE TWO-YEAR MARK. This is the whole game.
• USE ACCUMULATING SHARE CLASSES to convert 12%-taxed dividends into exempt capital appreciation.
• USE IRISH-DOMICILED UCITS ETFs for US exposure, pending the US treaty.

No net wealth tax. A real estate tax applies to individuals' property with a total taxable value above EUR 150,000 (EUR 200,000 for families raising three or more children or a disabled child), at progressive rates of 0.5% to 2%. From 2026 a reformed real estate tax lowers the threshold and broadens the base — VERIFY THE ENACTED 2026 RULES, which were part of the wider tax reform package.

No securities account tax and no financial transaction tax. Financial assets bear no annual charge.

15% FLAT on capital gains, with a genuinely useful ANNUAL EXEMPTION OF EUR 500 on gains from the sale of FINANCIAL INSTRUMENTS (shares, bonds, funds, derivatives). The exemption is per taxpayer per year and applies to the gain, not the proceeds.

PROGRESSION: since 2019, non-employment income (including capital gains, dividends, interest and rents) above a threshold of 120 times the average wage — approximately EUR 126,500 for 2025 — is taxed at 20% rather than 15%.

THE 2026 REFORM: Lithuania enacted a substantial tax reform in June 2025 taking effect from 1 January 2026, which restructures the rates on personal and capital income and introduces additional progressive bands. VERIFY THE ENACTED 2026 RATES AND THRESHOLDS FOR CAPITAL GAINS, DIVIDENDS AND INTEREST BEFORE RELYING ON THE FIGURES ABOVE — this is one of the least stable positions in this table.

LOSSES: losses on the disposal of financial instruments may be offset against gains on financial instruments in the same year and CARRIED FORWARD INDEFINITELY, but only against gains of the same category. This is more generous than most CEE states, which deny carryforward entirely.

HOLDING-PERIOD RELIEF: gains on shares in an entity are exempt if the individual held more than 10% of the shares for at least TWO YEARS (three years in certain reorganisation cases) — relevant to founders, not to portfolio investors.

OTHER ASSETS: gains on movable property (gold, art, collectibles) sold by a private individual are taxable at 15%/20% but benefit from the same EUR 500 annual exemption in aggregate with other "non-employment" income categories in some cases — check the specific classification. Real estate: 15%, exempt if held more than 10 years, or if it was the taxpayer's declared residence for at least two years, or if the proceeds are reinvested in a residence within one year.

CRYPTO: taxed as a financial instrument at 15%/20% with the EUR 500 exemption.

15% (20% above the 120-average-wage threshold), with an ANNUAL EXEMPTION OF EUR 500 on interest from deposits and from non-equity securities. Interest on EU/EEA government bonds acquired before 2014 retains a legacy exemption in some cases.

Final withholding by Lithuanian payers; foreign interest self-assessed with a foreign tax credit.

The EUR 500 exemptions for interest and for capital gains are SEPARATE, so a Lithuanian resident can shelter EUR 1,000 of investment return per year in total.

15% FLAT WITHHOLDING (20% above the threshold in some formulations — verify, as dividends have historically been subject to a flat 15% without the progressive uplift).

The EUR 500 exemptions do NOT apply to dividends.

IDENTICAL OR NEAR-IDENTICAL TO INTEREST AND CAPITAL GAINS — Lithuania offers no meaningful asset-class preference, though the EUR 500 exemptions give capital gains and interest a small edge.

Foreign dividends: 15% with a credit for foreign withholding tax up to the Lithuanian liability.

Small companies distributing profits taxed at the reduced 5% corporate rate suffer the full 15% at shareholder level; Lithuania does not integrate.

INHERITANCE TAX (paveldimo turto mokestis), levied on the recipient:

• 5% where the taxable value of the inherited property does not exceed EUR 150,000
• 10% where it exceeds EUR 150,000

Applied to the whole value, not marginally.

EXEMPT:

• THE SPOUSE, CHILDREN (including adopted), PARENTS (including adoptive), GRANDPARENTS, GRANDCHILDREN, SIBLINGS AND GUARDIANS/WARDS ARE FULLY EXEMPT, without limit. This is a wide family exemption — wider than most, because it includes siblings and grandparents.
• Any estate with a taxable value not exceeding EUR 3,000 is exempt regardless of relationship.

GIFT TAX: gifts are taxed as INCOME of the recipient at 15%, but gifts from a SPOUSE, CHILD, PARENT, SIBLING, GRANDPARENT OR GRANDCHILD ARE EXEMPT WITHOUT LIMIT. Gifts from other persons are exempt up to EUR 2,500 per year in aggregate.

Lithuania is therefore effectively a zero wealth-transfer-tax jurisdiction for family succession, both during life and at death.

No step-up in basis; heirs take the deceased's acquisition cost. Given the 15% rate and the EUR 500 annual exemption, the latent liability is modest.

UNITED STATES: INCOME TAX TREATY in force (signed 1998, effective 2000 — 5%/15% dividends, 0%/10% interest, with a limitation-on-benefits article).

NO US-LITHUANIA ESTATE OR GIFT TAX TREATY. Since Lithuania exempts family inheritances there is nothing to credit; a Lithuanian resident holding US-situs shares faces 40% US estate tax over a $60,000 exemption with no relief. USE IRISH-DOMICILED UCITS ETFs.

SWITZERLAND: INCOME TAX TREATY in force (2002 — 5%/15% dividends, 10% interest). No inheritance treaty.

Lithuania has around 60 income tax treaties and participates fully in CRS and DAC.

PILLAR III VOLUNTARY PENSION: contributions to a voluntary pension fund or a qualifying life insurance contract are DEDUCTIBLE from taxable income, subject to a COMBINED CAP OF 25% OF ANNUAL EMPLOYMENT-RELATED INCOME AND AN ABSOLUTE CAP OF EUR 1,500 PER YEAR across pension contributions, life insurance premiums and certain other reliefs. Investment returns inside the fund are untaxed. Benefits are exempt if taken no earlier than five years before the statutory pension age (or on disability), and taxed at 15% on the return component otherwise.

LIFE INSURANCE: premiums on qualifying long-term contracts fall within the same EUR 1,500 relief. The investment return inside a policy is not taxed annually; the payout is exempt where the contract has run at least five years AND the beneficiary is at least five years from pension age, or where the sum is paid on death. A correctly structured Lithuanian or cross-border (Luxembourg) life policy therefore gives gross roll-up plus a potential full exemption on the gain — the most valuable domestic deferral tool, and materially better than the small deduction suggests.

PILLAR II: participation is voluntary with periodic re-enrolment windows; contributions are 3% of salary plus a state supplement.

INVESTMENT ACCOUNT REGIME: Lithuania legislated an "investment account" model, following the Estonian and Latvian precedent, allowing tax to be deferred until net withdrawals exceed net contributions — CONFIRM THE ENACTED COMMENCEMENT DATE AND SCOPE, as it formed part of the 2025-2026 reform package. If in force, it is the single most important Lithuanian planning development, because it converts a 15% annual drag into indefinite deferral.

No net wealth tax. Property tax is levied on a "nadomestilo za uporabo stavbnega zemljisca" (building land use charge) set by municipality, generally low. A property tax reform has been repeatedly proposed and struck down; verify current status.

No securities account tax and no financial transaction tax on securities.

SLOVENIA OPERATES THE MOST EXPLICITLY DEGRESSIVE CAPITAL GAINS SCHEDULE IN THE EUROPEAN UNION — the rate falls with the holding period until it reaches zero.

FROM 1 JANUARY 2022 (the schedule was shortened from 20 years to 15):

• Held LESS THAN 5 YEARS: 25%
• Held 5 TO 10 YEARS: 20%
• Held 10 TO 15 YEARS: 15%
• HELD MORE THAN 15 YEARS: 0% — FULLY EXEMPT

The rate is a final, schedular tax (cedularni davek), separate from the progressive personal income tax scale.

This gives a clean, quantifiable reward for patience: on a EUR 1,000,000 gain, the difference between a 14-year and a 16-year hold is EUR 150,000.

LOSSES: capital losses may be offset against capital gains realised in the SAME CALENDAR YEAR. There is NO LOSS CARRYFORWARD for individuals. Losses arising on disposals to related parties, and on assets acquired within 30 days before or 30 days after a disposal at a loss (a wash-sale rule), are disallowed.

BASIS AND ORDERING: FIFO applies to identical securities. The acquisition cost is increased by 1% (a standardised allowance for acquisition costs) and the disposal proceeds reduced by 1% — a small but automatic benefit.

CRYPTO: from 1 January 2026 Slovenia introduced a dedicated regime taxing gains on crypto-asset disposals (conversion to fiat or use for payment) at a flat rate, with an optional simplified basis — VERIFY THE ENACTED RATE AND MECHANICS, as this was legislated during 2025.

OTHER ASSETS: gains on movable property (gold, art, collectibles) sold by a private individual are NOT subject to capital gains tax in Slovenia — the charge applies to securities, participations, investment coupons and real estate. Real estate follows the same degressive schedule (25% falling to 0% after 15 years), with a full exemption for a principal residence occupied for at least three years.

DERIVATIVES: gains on derivative financial instruments are taxed under a parallel schedule — 25% if held less than a year (40% for very short-term speculative contracts in earlier versions of the law; verify), falling with the holding period on the same basis. Check the specific instrument.

25% FLAT, final schedular tax (cedularni davek) on interest from deposits, bonds and loans.

There is no annual exemption (the former EUR 1,000 exemption on bank deposit interest was abolished).

NOTE THE SPREAD VERSUS LONG-HELD GAINS: 25% on interest versus 0% on securities held more than 15 years. Over a long horizon, capital appreciation is entirely untaxed while income is taxed at a quarter.

25% FLAT, final schedular tax. IDENTICAL TO INTEREST — no dividend preference.

Foreign dividends: 25% with a credit for foreign withholding tax up to the Slovenian liability. Because the Slovenian rate is a relatively high 25%, foreign withholding of 15% is fully absorbed — Slovenia is one of the few small EU states where the foreign tax credit generally works fully.

THE PORTFOLIO CONCLUSION: with 25% on all income and a schedule that reaches 0% on gains after 15 years, Slovenian taxable portfolios should be built for VERY LONG-HORIZON CAPITAL APPRECIATION. Accumulating funds convert 25%-taxed dividends into gains that decay to zero. For a client with a genuine multi-decade horizon — a family portfolio intended for the next generation — Slovenia's schedule is exceptionally favourable. For a client with a 5-year horizon it is among the harsher regimes in CEE.

INHERITANCE AND GIFT TAX (davek na dediscine in darila), levied on the recipient by class:

• CLASS I — SPOUSE, DIRECT-LINE DESCENDANTS AND ASCENDANTS (children, grandchildren, parents), a registered partner, a long-term cohabiting partner, a son-in-law/daughter-in-law and a stepchild: FULLY EXEMPT, without limit.
• CLASS II (parents, siblings and their descendants): 5% to 14%, progressive.
• CLASS III (grandparents' siblings and their descendants): 8% to 17%.
• CLASS IV (all others): 12% to 39%.

Movable property with a value below EUR 5,000 is exempt regardless of class.

Slovenia is therefore a zero wealth-transfer-tax jurisdiction for the immediate family, and progressive up to 39% for unrelated beneficiaries.

CRITICALLY FOR PLANNING: heirs and donees SUCCEED TO THE DECEASED'S OR DONOR'S ACQUISITION DATE AND COST for capital gains purposes in direct-line transfers. This means AN INHERITED LONG-HELD POSITION CARRIES ITS HOLDING PERIOD WITH IT — a portfolio held by a parent for 12 years and inherited by a child needs only three more years to reach the 15-year exemption. Multi-generational holding is therefore explicitly rewarded, and this is the single most important structural feature of the Slovenian system for family wealth. Confirm the treatment for the specific asset class, as the rules differ between gifts and inheritances.

UNITED STATES: INCOME TAX TREATY in force (signed 1999, effective 2002 — 5%/15% dividends, 5% interest, with a limitation-on-benefits article).

NO US-SLOVENIA ESTATE OR GIFT TAX TREATY. Since Slovenia exempts direct-line inheritances there is nothing to credit; a Slovenian resident holding US-situs shares faces 40% US estate tax over a $60,000 exemption with no relief. USE IRISH-DOMICILED UCITS ETFs.

SWITZERLAND: INCOME TAX TREATY in force (1996 — 0%/5%/15% dividends, 5% interest). No inheritance treaty.

SUPPLEMENTARY VOLUNTARY PENSION INSURANCE (prostovoljno dodatno pokojninsko zavarovanje, PDPZ): contributions are deductible from the personal income tax base up to 5.844% OF GROSS SALARY, capped at approximately EUR 2,900-3,000 per year (indexed to the average wage). Employer contributions within the same limit are exempt from personal income tax and social contributions for the employee and deductible for the employer. Investment returns inside the scheme are untaxed. Benefits taken as a lifetime annuity are taxed at the progressive scale on 50% of the payment; a lump sum is taxed at 25% on the return component. The employer route is the more efficient and is heavily used by Slovenian companies.

LIFE INSURANCE: the return on a life insurance contract is EXEMPT from the 25% schedular tax if the contract has run for at least TEN YEARS and the policyholder and beneficiary are the same person. This is a straightforward and valuable exemption: a ten-year insurance wrapper converts a 25% charge on income and gains into zero. For a Slovenian client with a 10-15 year horizon, it fills the gap before the capital gains schedule reaches 0% at 15 years.

THE PRIMARY STRATEGY IS THE HOLDING-PERIOD SCHEDULE ITSELF, COMBINED WITH INTERGENERATIONAL SUCCESSION OF THE HOLDING PERIOD.

No net wealth tax. Real estate tax at 0.2%-3% of cadastral value depending on the property type and municipality (0.2%-0.6% for residential, with municipal discretion). Cadastral values are well below market.

No securities account tax and no financial transaction tax.

25.5% FLAT ON CAPITAL INCOME — Latvia's 2025 tax reform raised the rate on capital income (including capital gains, dividends and interest) FROM 20% TO 25.5% with effect from 1 January 2025, aligning it with the new first band of the personal income tax scale (25.5% up to EUR 105,300 of annual income and 33% above).

VERIFY WHETHER THE 33% BAND APPLIES TO CAPITAL INCOME for the client in question — the 2025 reform restructured the whole scale and the interaction between capital income and the higher band has been a point of practical difficulty.

NO LONG-TERM/SHORT-TERM DISTINCTION and no indexation.

REPORTING: capital gains are declared quarterly where quarterly gains exceed EUR 1,000, and annually otherwise. This quarterly obligation is unusual and easy to miss.

LOSSES: losses on the disposal of capital assets may be offset against gains on capital assets, and CARRIED FORWARD THREE YEARS — better than Estonia's ordinary regime and than most of Latvia's neighbours, though inferior to Lithuania's indefinite carryforward.

OTHER ASSETS: gains on personal-use movable property are generally outside the charge, but gold, art and collectibles acquired as investments are capital assets taxed at 25.5%. Real estate: exempt if owned more than 60 months AND declared as the taxpayer's residence for at least 12 of the 60 months before sale, or if the proceeds are reinvested in a functionally equivalent property within 12 months.

CRYPTO: capital gains at 25.5%.

25.5% (raised from 20% in 2025). Withheld at source by Latvian payers where applicable; foreign interest self-assessed with a foreign tax credit.

Interest on Latvian and EU/EEA government and municipal bonds, and on debt securities admitted to trading on an EU/EEA regulated market, has historically benefited from exemptions — VERIFY THE CURRENT SCOPE, as these exemptions have been narrowed over successive reforms.

Interest inside an INVESTMENT ACCOUNT (below) is deferred, not exempt.

25.5% in principle, BUT WITH A SIGNIFICANT PARTICIPATION-STYLE EXEMPTION:

Dividends are EXEMPT from Latvian personal income tax where CORPORATE INCOME TAX HAS BEEN PAID on the underlying profits — specifically, where the distributing company is Latvian and has borne Latvian CIT, or where the company is resident in another EU/EEA state or a treaty state and has borne corporate income tax there, or where foreign personal income tax has been withheld at source.

Latvia operates a DISTRIBUTION-BASED CORPORATE TAX (the Estonian model): a Latvian company pays no corporate income tax on retained profits and 20% (on a grossed-up base of 0.8, giving an effective 25%) only when it distributes. The individual-level exemption prevents double taxation of that distribution.

THE SCOPE OF THE EXEMPTION HAS BEEN NARROWED SEVERAL TIMES SINCE 2018 AND IS THE SINGLE MOST IMPORTANT POINT TO VERIFY FOR A LATVIAN CLIENT. Where it applies, foreign portfolio dividends from EU/EEA and treaty-state companies that have borne corporate tax may be exempt at the shareholder level, making dividends MORE favourably treated than interest and capital gains at 25.5%. Where it does not apply (for example distributions from exempt vehicles or low-tax jurisdictions), the full 25.5% applies.

If the exemption is available, THE LATVIAN PORTFOLIO CONCLUSION REVERSES THE NORM: dividends from ordinary taxed corporates may be the most efficient form of return, and accumulating funds — whose distributions may not qualify — may be worse. Model this carefully for each holding.

NO INHERITANCE TAX AND NO ESTATE DUTY. Latvia does not levy any tax on inheritances.

GIFTS: a gift is taxed as INCOME of the recipient at 25.5%, BUT:

• Gifts from a SPOUSE OR A RELATIVE UP TO THE THIRD DEGREE OF KINSHIP (parents, children, grandparents, grandchildren, siblings, aunts/uncles, nieces/nephews, great-grandparents/great-grandchildren) ARE FULLY EXEMPT, without limit.
• Gifts from any other individual are exempt up to EUR 1,425 per year in aggregate; the excess is taxable income.

Latvia is therefore effectively a zero wealth-transfer-tax jurisdiction for family succession, with an unusually wide definition of family (third degree of kinship).

Notarial and land registry fees apply to real estate transfers.

No step-up in basis: heirs take the deceased's acquisition cost, so the latent 25.5% capital gains liability passes with the asset. Given there is no inheritance tax, the planning conclusion is simply to transfer rather than to realise.

UNITED STATES: INCOME TAX TREATY in force (signed 1998, effective 2000 — 5%/15% dividends, 0%/10% interest, with a limitation-on-benefits article).

NO US-LATVIA ESTATE OR GIFT TAX TREATY. Since Latvia levies no inheritance tax there is nothing to credit; a Latvian resident holding US-situs shares faces 40% US estate tax over a $60,000 exemption with no relief. USE IRISH-DOMICILED UCITS ETFs.

SWITZERLAND: INCOME TAX TREATY in force (2002 — 5%/15% dividends, 10% interest). No inheritance treaty.

THE INVESTMENT ACCOUNT (IEGULDIJUMU KONTS) — LATVIA'S FLAGSHIP DEFERRAL VEHICLE, and the reason Latvia belongs in a serious discussion of European tax wrappers.

MECHANICS: an individual designates an account with a licensed investment services provider as an "investment account" and notifies the State Revenue Service. Thereafter:

• ALL contributions to the account are tracked cumulatively.
• ALL income and gains arising INSIDE the account — capital gains, dividends, interest, fund distributions — are NOT TAXED as they arise.
• TAX (25.5%) BECOMES PAYABLE ONLY WHEN CUMULATIVE WITHDRAWALS FROM THE ACCOUNT EXCEED CUMULATIVE CONTRIBUTIONS TO IT, and then only on the excess.
• There is NO CONTRIBUTION LIMIT, NO TIME LIMIT and NO LOCK-UP. Capital can be withdrawn at any time free of tax until the cumulative-contributions threshold is crossed.
• Only qualifying financial instruments may be held (listed securities, funds, deposits); real assets, derivatives in some cases, and unlisted holdings are excluded — verify the eligible-instrument list.

This is the Estonian model, and it delivers COMPLETE, UNLIMITED, INDEFINITE DEFERRAL for a self-directed portfolio, with no insurance wrapper, no product charges and no minimum term. For any Latvian resident running a taxable portfolio, DESIGNATING AN INVESTMENT ACCOUNT SHOULD BE THE DEFAULT AND FIRST STEP.

PRIVATE PENSION FUNDS AND LIFE INSURANCE WITH ACCUMULATION: contributions are deductible from taxable income up to 10% OF GROSS ANNUAL INCOME, capped at EUR 4,000 per year, across pension fund contributions and qualifying life insurance premiums combined (the life insurance contract must have a term of at least 10 years). Investment returns inside the vehicle are untaxed. Pension benefits from the statutory age are exempt; life insurance payouts after the 10-year term are exempt.

No net wealth tax. Land tax is levied on land only (not buildings) at 0.1%-2.5% of assessed value set by municipality, with a 2024 revaluation and transitional caps on annual increases. Very low in absolute terms.

No securities account tax and no financial transaction tax.

Estonia's distinguishing fiscal feature is at the CORPORATE level: a company pays NO income tax on retained or reinvested profits, and tax arises only on distribution. This flows through to individual planning, because an Estonian holding company (OU) is itself a deferral vehicle.

22% FLAT (raised from 20% with effect from 1 January 2025).

THE PLANNED FURTHER INCREASE: a 2% "security tax" was legislated to raise the personal income tax rate to 24% from 1 January 2026. In mid-2025 the coalition decided to ABANDON the personal and corporate income tax elements of the security tax while retaining the VAT increase — SO THE RATE IS EXPECTED TO REMAIN 22% IN 2026. VERIFY THE ENACTED POSITION, as this changed more than once.

NO LONG-TERM/SHORT-TERM DISTINCTION and no indexation.

LOSSES: losses on the disposal of securities may be offset against gains on securities in the same year and CARRIED FORWARD INDEFINITELY, but only against gains on securities. Losses on the disposal of other property may not be carried forward.

OTHER ASSETS: gains on the disposal of PERSONAL-USE movable property are EXEMPT. Gold, art and collectibles held for investment are taxable at 22%. Real estate: exempt where the property was the taxpayer's residence, or where it was acquired by restitution or privatisation; otherwise 22%.

CRYPTO: taxable at 22% on each disposal, computed transaction by transaction with NO netting of losses against gains in the ordinary regime — a genuinely punitive rule. FROM 1 JANUARY 2025 CRYPTO-ASSETS WERE BROUGHT WITHIN THE INVESTMENT ACCOUNT REGIME (below), which solves this entirely by permitting full netting and deferral. Verify.

22% flat. Withheld at source on Estonian deposits; foreign interest self-assessed with a foreign tax credit.

Interest arising INSIDE an investment account is deferred, not exempt.

22% flat at shareholder level, BUT WITH SIGNIFICANT EXEMPTIONS:

• Dividends from an ESTONIAN company are generally EXEMPT at the individual level, because the company has already paid the distribution tax (22/78 of the net distribution, an effective 22% at company level). Where the company applied the reduced 14% rate available for regular distributions, a 7% WITHHOLDING TAX applies to the individual recipient.
• FOREIGN dividends are EXEMPT from Estonian personal income tax where the underlying profits have been subject to income tax abroad, OR where income tax has been WITHHELD at source. In practice this means most portfolio dividends from ordinary taxed foreign corporates are EXEMPT AT THE ESTONIAN INDIVIDUAL LEVEL.

THIS IS A LARGE AND OFTEN-OVERLOOKED BENEFIT. Verify the conditions for each holding, but the general position is that a foreign dividend which has borne any source withholding is not taxed again in Estonia.

CONSEQUENCE: dividends can be MORE favourably treated than capital gains (22%) in Estonia — the opposite of the pattern in most of this table. A dividend-paying portfolio of ordinary taxed foreign corporates may produce a lower effective Estonian tax burden than a growth portfolio, because the dividends escape entirely while the gains are taxed at 22%.

BUT NOTE: dividends received INSIDE an investment account are treated as account income and are deferred rather than exempt in some formulations — the interaction between the dividend exemption and the investment account regime must be checked, because putting an exempt dividend into a deferral account converts an exemption into a deferral, which is worse.

NO INHERITANCE TAX AND NO GIFT TAX. Estonia levies neither. Inheritances and gifts are simply not taxable income of the recipient.

A notary's fee and state duty apply to the succession procedure, and real estate transfers bear a small state duty.

Estonia is one of the cleanest zero wealth-transfer-tax jurisdictions in the European Union, alongside Sweden, Austria, Slovakia, Cyprus and Malta.

No step-up in basis: heirs take the deceased's acquisition cost, so the latent 22% capital gains liability passes with the asset. There is therefore no reason to realise gains before death and every reason to transfer assets rather than sell them.

Note: an inherited INVESTMENT ACCOUNT can generally be continued by the heir with the contribution history intact — confirm for the specific case, as this preserves the entire deferral position across generations.

UNITED STATES: INCOME TAX TREATY in force (signed 1998, effective 2000 — 5%/15% dividends, 0%/10% interest, with a limitation-on-benefits article).

NO US-ESTONIA ESTATE OR GIFT TAX TREATY. Since Estonia levies no inheritance tax there is nothing to credit; an Estonian resident holding US-situs shares faces 40% US estate tax over a $60,000 exemption with no relief. USE IRISH-DOMICILED UCITS ETFs.

SWITZERLAND: INCOME TAX TREATY in force (2002 — 0%/10% dividends, 0%/10% interest). No inheritance treaty.

THE INVESTMENT ACCOUNT (INVESTEERIMISKONTO) — ESTONIA'S FLAGSHIP, AND THE MODEL LATVIA AND LITHUANIA HAVE COPIED.

MECHANICS: an individual designates one or more bank or brokerage accounts as investment accounts and reports them in the annual return. Thereafter:

• Every CONTRIBUTION to the account is recorded cumulatively.
• Every DISPOSAL, dividend, interest payment and fund distribution occurring INSIDE the account is NOT TAXED as it arises, provided the proceeds remain within the account system.
• TAX (22%) IS PAYABLE ONLY WHEN CUMULATIVE WITHDRAWALS EXCEED CUMULATIVE CONTRIBUTIONS, and then only on the excess.
• NO CONTRIBUTION LIMIT. NO TIME LIMIT. NO LOCK-UP. NO PRODUCT CHARGE.
• Multiple investment accounts may be held and transfers between them are not withdrawals.
• ELIGIBLE ASSETS: publicly traded securities, units in EU/EEA and OECD-regulated funds, deposits, and — from 2025 — CRYPTO-ASSETS. NOT eligible: unlisted shares, real estate, physical gold, and derivatives in most cases. Using an ineligible asset inside the account is treated as a withdrawal.

This is the purest and simplest unlimited-deferral wrapper in the European Union. FOR AN ESTONIAN RESIDENT WITH A TAXABLE PORTFOLIO, DESIGNATING AN INVESTMENT ACCOUNT IS THE SINGLE MOST VALUABLE ACTION AVAILABLE, AND IT COSTS NOTHING.

III PILLAR PENSION (private funded pension): contributions deductible from taxable income up to 15% OF ANNUAL GROSS INCOME, capped at EUR 6,000 per year. Investment returns untaxed inside the fund. From the qualifying age (currently five years before statutory pension age, and from age 55 in some formulations), withdrawals are taxed at a REDUCED 10% RATE, and a lifetime annuity is entirely EXEMPT. Deduction at 22% and withdrawal at 10% is a 12-point permanent arbitrage on every contribution, plus untaxed accumulation.

ESTONIAN HOLDING COMPANY (OU): an Estonian company pays NO corporate income tax on retained or reinvested profits — tax arises only on distribution, at 22/78 of the net amount (an effective 22%), or at a reduced 14/86 rate for regular distributions (with a 7% shareholder withholding). A portfolio held through an OU therefore compounds entirely gross at company level, indefinitely. This is the corporate equivalent of the investment account and is available to non-residents as well — one of the reasons Estonia's e-Residency programme is used for investment holding.

No net wealth tax. The Immovable Property Tax was ABOLISHED with effect from 2017. Local authorities levy small municipal and sewerage charges based on outdated 1980 property values.

No securities account tax and no financial transaction tax.

Cyprus has no annual charge of any kind on a financial portfolio.

THERE IS NO CAPITAL GAINS TAX ON SECURITIES IN CYPRUS.

Under Section 8(22) of the Income Tax Law, gains from the disposal of "TITLES" are FULLY EXEMPT from income tax, for both residents and non-residents, REGARDLESS OF HOLDING PERIOD, FREQUENCY OF TRADING OR AMOUNT.

"TITLES" is defined broadly and, per Tax Circular guidance, includes: ordinary and preference shares, founders' shares, bonds, debentures, options on titles, futures and forwards on titles, swaps on titles, depositary receipts (ADRs/GDRs), rights of claim on bonds and debentures, index participations (where they represent titles), repurchase agreements on titles, units in open-ended and closed-ended collective investment schemes (including UCITS, ICIS, AIFs, mutual funds and investment trusts), and participations in foreign entities that are comparable to companies.

NOT within the definition: commodities and commodity derivatives, foreign exchange and FX derivatives, physical gold, real estate, and crypto-assets (which are not yet expressly addressed — treat crypto as a grey area and take advice; frequent crypto trading risks being characterised as a trading business taxable at 20%-35%).

CAPITAL GAINS TAX AT 20% APPLIES ONLY TO:

• gains on the disposal of IMMOVABLE PROPERTY SITUATED IN CYPRUS, and
• gains on the disposal of shares in companies (wherever incorporated) that own Cyprus immovable property, where the value derives principally from it.

Lifetime exemptions apply (EUR 17,086 general, EUR 85,430 for a principal residence held 5 years, EUR 25,629 for agricultural land).

THERE IS NO "PROFESSIONAL TRADER" RECHARACTERISATION RISK FOR SECURITIES comparable to the Swiss Circular 36 problem — the exemption is unconditional as to frequency. THIS IS THE SINGLE MOST IMPORTANT PRACTICAL DIFFERENCE BETWEEN CYPRUS AND SWITZERLAND FOR AN ACTIVELY MANAGED PORTFOLIO: Cyprus permits unlimited turnover, leverage and derivatives on titles with no tax and no reclassification risk.

PASSIVE INTEREST IS EXEMPT FROM INCOME TAX and instead falls within the SPECIAL DEFENCE CONTRIBUTION (SDC) at 17%.

CRITICALLY, THE SDC APPLIES ONLY TO INDIVIDUALS WHO ARE BOTH TAX-RESIDENT AND CYPRUS-DOMICILED. A tax-resident NON-DOMICILED individual (see below) pays NO SDC AT ALL — so INTEREST IS COMPLETELY TAX-FREE for a Cyprus non-dom.

Interest arising in the ordinary course of business (including interest closely connected to a business) is subject to income tax at the ordinary progressive rates rather than SDC.

GESY (GENERAL HEALTHCARE SYSTEM) CONTRIBUTION: 2.65% on interest, dividends and rents received by Cyprus tax residents, applied to a base capped at EUR 180,000 of total annual income from all sources. THE MAXIMUM ANNUAL GESY CHARGE ON INVESTMENT INCOME IS THEREFORE APPROXIMATELY EUR 4,770 — a flat cap, not a rate, on any portfolio however large. This is the only charge a Cyprus non-dom pays on investment income.

CYPRUS 2026 TAX REFORM: a comprehensive reform package approved during 2025 proposed raising corporate income tax from 12.5% to 15% (OECD Pillar Two alignment), reducing or restructuring SDC on dividends, and extending the non-dom regime beyond 17 years subject to an annual fee. VERIFY THE ENACTED POSITION.

DIVIDENDS ARE EXEMPT FROM INCOME TAX and instead fall within the SPECIAL DEFENCE CONTRIBUTION at 17%.

AGAIN, SDC APPLIES ONLY TO CYPRUS-DOMICILED RESIDENTS. A tax-resident NON-DOMICILED individual pays NO SDC ON DIVIDENDS — SO DIVIDENDS, LIKE INTEREST AND CAPITAL GAINS, ARE COMPLETELY TAX-FREE.

Plus the capped 2.65% GESY contribution described above.

Foreign dividend withholding tax is a real cost and cannot be credited against a nil liability — so a Cyprus non-dom should still prefer ACCUMULATING, IRISH-DOMICILED UCITS ETFs, which suffer only 15% US withholding at fund level and no further leakage, over direct holdings of high-withholding foreign shares.

THE COMPOSITE POSITION FOR A CYPRUS NON-DOMICILED TAX RESIDENT IS: 0% on capital gains on securities (any holding period, any turnover), 0% on dividends, 0% on interest, 0% wealth tax, 0% inheritance tax — with a total annual charge capped at roughly EUR 4,770 of GESY. This is among the most favourable investment tax positions available anywhere in the European Union, and it is the ORDINARY LAW rather than a negotiated or capped special regime.

NO ESTATE, INHERITANCE OR GIFT TAX. Estate duty was abolished with effect from 1 January 2000. Cyprus levies nothing on transfers of wealth at death or during life.

No probate tax and no succession duty. Estate administration fees are nominal.

Real property transfers bear transfer fees (reduced by 50%, or eliminated where VAT was paid), and gifts of Cyprus immovable property between close relatives are exempt from transfer fees.

FORCED HEIRSHIP: Cyprus law reserves a portion of the estate for the spouse and children where the deceased was Cyprus-domiciled. The EU Succession Regulation 650/2012 permits an election of the law of nationality in a will, which is essential for common-law clients and is routinely done.

No step-up issue arises for securities, since gains are exempt in any event.

UNITED STATES: INCOME TAX TREATY in force (signed 1984, effective 1986; a 2019 PROTOCOL updated the exchange of information and limitation-on-benefits provisions and entered into force in September 2019). Dividend withholding 5%/15%, interest 10% with exemptions. The treaty is old but functional and was modernised on the transparency side.

NO US-CYPRUS ESTATE OR GIFT TAX TREATY. Since Cyprus levies no inheritance tax there is nothing to credit; a Cyprus resident holding US-situs shares faces 40% US estate tax over a $60,000 exemption with NO RELIEF WHATSOEVER. GIVEN THAT EVERYTHING ELSE IN CYPRUS IS TAX-FREE, US ESTATE TAX IS THE LARGEST SINGLE TAX EXPOSURE A CYPRUS-RESIDENT INVESTOR FACES. It is entirely avoidable by holding US equity exposure through IRISH-DOMICILED UCITS ETFs, and doing so should be treated as mandatory.

SWITZERLAND: INCOME TAX TREATY in force (signed 2014, effective 2016 — 0%/15% dividends, 0% interest). No inheritance treaty.

Cyprus has over 65 income tax treaties, including an extensive network across CEE, the Middle East and Asia, and participates fully in CRS and DAC.

CYPRUS DOES NOT NEED DEFERRAL VEHICLES, BECAUSE THE ORDINARY RATES ARE ZERO. The planning is about ESTABLISHING AND MAINTAINING THE RIGHT STATUS, not about wrappers.

THE NON-DOMICILED REGIME — THE CENTRAL FEATURE. An individual is "domiciled in Cyprus" for SDC purposes if they have a Cypriot domicile of origin under the Wills and Succession Law, OR have been Cyprus tax-resident for at least 17 OF THE LAST 20 YEARS. Anyone else who becomes Cyprus tax-resident is a NON-DOM and is exempt from SDC on dividends, interest and rents — for up to 17 YEARS. The 2025-2026 reform proposed extending this beyond 17 years subject to an annual fee; verify.

No minimum investment, no application fee, no negotiated ruling. It applies automatically on becoming resident.

THE 60-DAY TAX RESIDENCY RULE — an unusually accessible route to residence. An individual becomes Cyprus tax-resident in a year if they:

• (i) spend AT LEAST 60 DAYS in Cyprus in the tax year;
• (ii) do NOT spend more than 183 days in any other single state;
• (iii) are NOT tax-resident in any other state;
• (iv) carry on a business in Cyprus, are employed in Cyprus, or hold an office in a Cyprus tax-resident company at any time in the year; AND
• (v) maintain a permanent residence in Cyprus (owned or rented).

For a genuinely mobile investor with no other centre of vital interests, THE 60-DAY RULE PLUS NON-DOM STATUS IS THE MOST ACCESSIBLE ZERO-TAX INVESTMENT RESIDENCE IN THE EUROPEAN UNION.

EMPLOYMENT INCOME RELIEFS: a 50% exemption on Cyprus employment income exceeding EUR 55,000 per year for individuals not resident in the 15 years before employment began, for 17 years (Article 8(23A)); or a 20% exemption capped at EUR 8,550 for others.

CYPRUS HOLDING COMPANY (for the business-owning client): 12.5% corporate income tax (proposed to rise to 15%), a full participation exemption on dividends received and on gains from the disposal of titles, no withholding tax on dividends, interest or royalties paid to non-residents, notional interest deduction on new equity, and an IP box with an effective rate of 2.5%.

PROVIDENT FUNDS AND LIFE INSURANCE: contributions to approved provident funds, life insurance premiums, and social insurance and GESY contributions are deductible up to 1/5 of taxable income in aggregate — relevant only to those with employment income, since investment income is untaxed anyway.

No net wealth tax, no annual property tax and no municipal rates on property. Malta is one of the very few developed countries with NO recurrent tax on immovable property at all.

No securities account tax and no financial transaction tax.

Malta instead raises transfer-related revenue through DUTY ON DOCUMENTS AND TRANSFERS (see Estate column) and through property transfer taxes on disposals.

MALTA HAS NO SEPARATE CAPITAL GAINS TAX REGIME. Capital gains are taxed as ordinary income at the progressive scale (0% to 35%), BUT ONLY WHERE THE ASSET FALLS WITHIN A CLOSED LIST IN ARTICLE 5 OF THE INCOME TAX ACT:

• immovable property
• securities (shares and stocks), business goodwill, business permits, copyright, patents, trademarks and trade names
• a beneficial interest in a trust
• interests in a partnership
• value shifting arrangements

ANY ASSET NOT ON THAT LIST IS OUTSIDE THE CHARGE ENTIRELY. Gains on PHYSICAL GOLD, ART, ANTIQUES, CLASSIC CARS, WINE, COLLECTIBLES, COMMODITIES AND CRYPTO-ASSETS (where held as a store of value rather than traded as a business) ARE NOT TAXABLE. This is a genuine and unusual structural exemption.

EXEMPT EVEN WITHIN THE LIST: gains on the transfer of SHARES LISTED ON THE MALTA STOCK EXCHANGE (other than in a property company) are EXEMPT. Gains on units in collective investment schemes are generally outside the securities definition or exempt.

THE DECISIVE FEATURE FOR INTERNATIONALLY MOBILE CLIENTS — THE MALTESE REMITTANCE BASIS:

An individual who is RESIDENT BUT NOT DOMICILED in Malta is taxed on:

• (i) Maltese-source income and gains, in full;
• (ii) FOREIGN-SOURCE INCOME, ONLY IF AND WHEN REMITTED to Malta;
• (iii) FOREIGN-SOURCE CAPITAL GAINS — NEVER. FOREIGN CAPITAL GAINS ARE NOT TAXABLE IN MALTA EVEN IF REMITTED.

THAT LAST POINT IS UNIQUE AMONG REMITTANCE-BASIS JURISDICTIONS AND IS THE SINGLE MOST VALUABLE FEATURE OF THE MALTESE SYSTEM. The UK taxed remitted foreign gains until it abolished the regime in 2025; Ireland taxes remitted foreign gains. Malta does not tax them at all. A Malta-resident non-dom can realise unlimited foreign capital gains, bring the proceeds into Malta, and pay nothing.

A MINIMUM TAX of EUR 5,000 per year applies to resident non-doms with at least EUR 35,000 of annual foreign income (whether remitted or not), creditable against actual Maltese tax paid.

LOSSES: capital losses on chargeable assets may be offset against capital gains and carried forward indefinitely; they cannot offset ordinary income.

MALTESE-SOURCE INTEREST: a 15% FINAL WITHHOLDING TAX, deducted at source by the paying agent and requiring no declaration. Alternatively the taxpayer may elect to declare it and be taxed at progressive rates (relevant only for low-income taxpayers).

FOREIGN-SOURCE INTEREST: for a resident non-dom, taxable ONLY ON REMITTANCE. If remitted, the taxpayer may elect a 15% FLAT RATE on foreign investment income under Article 56(19) of the Income Tax Act, rather than progressive rates up to 35%.

If NOT remitted, it is not taxed at all (subject to the EUR 5,000 minimum tax).

So for a Malta-resident non-dom, foreign interest is either 0% (not remitted) or 15% (remitted, with the election).

MALTESE-SOURCE DIVIDENDS: Malta operates a FULL IMPUTATION SYSTEM — the only remaining full imputation system in the European Union. A Maltese company pays 35% corporate income tax, and the shareholder receives an imputation credit for the full 35%. Since the individual's top rate is also 35%, THERE IS NO FURTHER TAX ON A MALTESE DIVIDEND, and a shareholder taxed at a lower rate receives a REFUND of the excess credit. Non-resident and certain resident shareholders of Maltese trading companies can also claim the 6/7ths, 5/7ths or 2/3rds refunds of the company's tax, reducing the effective corporate rate to as little as 5%.

FOREIGN-SOURCE DIVIDENDS: for a resident non-dom, taxable ONLY ON REMITTANCE, and then at progressive rates up to 35% OR at the elective 15% FLAT RATE on foreign investment income.

If NOT remitted, not taxed (subject to the EUR 5,000 minimum tax).

PRACTICAL CONCLUSION: a Malta-resident non-dom holding an offshore portfolio pays 0% on foreign capital gains (always), 0% on unremitted foreign dividends and interest, and 15% on remitted foreign investment income. Remittance planning — segregating clean capital, using pre-arrival capital for Maltese living expenses, and remitting foreign CAPITAL GAINS (which are never taxed) rather than foreign income — is the whole discipline.

MALTA-SOURCE PORTFOLIO CONSTRUCTION NOTE: because foreign gains are never taxed but foreign income is taxed on remittance, THE MALTESE NON-DOM SHOULD BUILD A TOTAL-RETURN, ACCUMULATING PORTFOLIO AND FUND LIVING EXPENSES FROM CAPITAL GAINS RATHER THAN FROM DIVIDENDS AND INTEREST. This is a rare case where the tax system rewards funding consumption out of gains.

NO INHERITANCE TAX, NO ESTATE DUTY AND NO GIFT TAX. Malta abolished death duties in 1992.

INSTEAD: DUTY ON DOCUMENTS AND TRANSFERS (stamp duty), levied on the transferee:

• 5% on transfers of MALTESE IMMOVABLE PROPERTY (2% for property in Gozo; reduced rates and exemptions for first-time buyers and for property in urban conservation areas). Duty is charged on transfers causa mortis as well as inter vivos.
• 2% on transfers of SHARES IN MALTESE COMPANIES; 5% where the company is a "property company" (more than 75% of its assets are Maltese immovable property).
• EXEMPTION: no duty is chargeable on shares in a company that has more than 90% of its business interests OUTSIDE Malta, or on shares in a collective investment scheme. Most internationally-facing Maltese holding companies therefore transfer duty-free.
• There is NO duty on the transfer of FOREIGN assets, foreign securities, or cash.

So a Malta resident holding an offshore portfolio and foreign real estate passes it to heirs at ZERO Maltese cost. Only Maltese property and Maltese property companies attract the 5%.

Reduced duty rates apply on transfers of family businesses between close relatives (1.5%).

FORCED HEIRSHIP: Maltese civil law reserves a portion for the spouse and children. The EU Succession Regulation permits an election of the law of nationality in a will — routinely used.

UNITED STATES: INCOME TAX TREATY in force (signed 2008, effective 2011 — 5%/15% dividends, 10% interest, with a comprehensive limitation-on-benefits article).

NOTE THE 2021 COMPETENT AUTHORITY ARRANGEMENT: the US and Malta agreed that a "Maltese personal retirement scheme" funded with non-employment-related contributions and permitting tax-free distributions is NOT a "pension fund" for treaty purposes, shutting down the so-called "Malta pension plan" arrangement that had been marketed to US persons. The IRS included it in the 2021 "Dirty Dozen" list. DO NOT USE MALTESE RETIREMENT SCHEMES FOR US PERSONS.

NO US-MALTA ESTATE OR GIFT TAX TREATY. A Malta resident holding US-situs shares faces 40% US estate tax over a $60,000 exemption with no relief. USE IRISH-DOMICILED UCITS ETFs.

SWITZERLAND: INCOME TAX TREATY in force (signed 2011, effective 2012 — 0%/15% dividends, 0% interest). No inheritance treaty.

Malta has around 80 income tax treaties and participates fully in CRS and DAC.

MALTA'S PLANNING IS BUILT ON RESIDENCE STATUS AND REMITTANCE DISCIPLINE, NOT ON DEFERRAL PRODUCTS.

THE ORDINARY RESIDENT NON-DOM POSITION (described above) is available simply by becoming resident without acquiring a Maltese domicile — no programme, no application, no minimum tax beyond the EUR 5,000 floor where foreign income exceeds EUR 35,000.

FORMAL RESIDENCE PROGRAMMES, each giving a 15% FLAT RATE on FOREIGN INCOME REMITTED to Malta (with foreign capital gains untaxed in every case):

• THE RESIDENCE PROGRAMME (TRP) — for EU/EEA/Swiss nationals. Minimum annual tax EUR 15,000. Property requirement (purchase or rent above stated thresholds).
• THE GLOBAL RESIDENCE PROGRAMME (GRP) — for third-country nationals. Minimum annual tax EUR 15,000. Same property requirements.
• THE MALTA RETIREMENT PROGRAMME (MRP) — for pensioners receiving a foreign pension remitted to Malta; 15% on the pension, minimum EUR 7,500 plus EUR 500 per dependant.
• THE MALTA PERMANENT RESIDENCE PROGRAMME (MPRP) — a residence-by-investment route (not a tax programme as such), requiring property, a government contribution and a philanthropic donation.
• HIGHLY QUALIFIED PERSONS RULES — 15% flat on employment income above a threshold for senior roles in financial services, gaming, aviation and other designated sectors.

Each programme was revised in the 2024-2025 legislative updates — VERIFY CURRENT MINIMUM TAX, PROPERTY AND CONTRIBUTION THRESHOLDS.

INSURANCE WRAPPERS, TRUSTS AND FOUNDATIONS: Malta is an established structuring centre with a full trust law (a civil law jurisdiction that has adopted the trust) and a foundations regime. A Maltese trust with no Maltese-resident beneficiaries and no Maltese-source income is transparent or exempt; a Malta-resident settlor's trust is taxed by reference to the beneficiaries. These are used for succession and asset protection rather than for tax deferral, since the underlying rates are already low.

No net wealth tax. Council tax on residential property is banded on 1991 values in England and Scotland (2003 in Wales) and is highly regressive at the top — a GBP 20m London house pays roughly the same as a GBP 1m one.

HIGH VALUE COUNCIL TAX SURCHARGE ("mansion tax"): announced in the Autumn Budget of 26 November 2025, a new annual surcharge on residential properties valued above GBP 2,000,000, to take effect from APRIL 2028, with banded charges rising for higher values. This is the first recurrent value-based wealth charge on UK property in modern times. VERIFY THE ENACTED BANDS AND THRESHOLDS.

Stamp Duty Land Tax on purchase reaches 12% (17% with the additional-property and non-resident surcharges) — a very heavy transaction tax on property, but not a recurrent wealth tax.

The UK has repeatedly considered and rejected a general wealth tax (the Wealth Tax Commission reported in 2020 recommending a one-off charge); none has been enacted.

RATES (following the Autumn Budget of 30 October 2024, which aligned all assets):

• 18% for gains falling within the basic rate band
• 24% for gains above it

These apply to shares, funds, bonds outside the exempt categories, gold, art, crypto and residential property alike. The former 10%/20% rates for non-property assets were abolished for disposals on or after 30 October 2024.

• CARRIED INTEREST: 32% from 6 April 2025, moving into the income tax regime (with a 72.5% multiplier) from 6 April 2026.
• BUSINESS ASSET DISPOSAL RELIEF: 10% until 5 April 2025, 14% from 6 April 2025, and 18% FROM 6 APRIL 2026 — the relief is being phased into alignment. GBP 1,000,000 lifetime limit. Investors' Relief lifetime limit cut from GBP 10m to GBP 1m.

ANNUAL EXEMPT AMOUNT: GBP 3,000 per person (reduced from GBP 12,300 in 2022/23), not transferable, use-it-or-lose-it. A married couple has GBP 6,000.

NO LONG-TERM/SHORT-TERM DISTINCTION and no indexation (frozen at April 1998 for individuals, abolished 2008).

MATCHING AND POOLING RULES — more restrictive than the US:

• Same-day acquisitions are matched first;
• Then acquisitions in the NEXT 30 DAYS (the "bed and breakfast" rule);
• Then the SECTION 104 POOL (an average-cost pool of all remaining holdings).

There is no specific identification and no lot-level selection. The standard workarounds are "BED AND ISA" (sell in a taxable account, repurchase inside an ISA), "BED AND SIPP", "BED AND SPOUSE" (sell and have the spouse repurchase — spousal transfers are on a no-gain-no-loss basis), and "bed and similar" (repurchase a different but economically similar fund).

ASSET-CLASS EXEMPTIONS — GENUINELY IMPORTANT AND OFTEN OVERLOOKED:

• UK GILTS (government bonds) ARE COMPLETELY EXEMPT FROM CGT. So is any "qualifying corporate bond". This is the basis of the LOW-COUPON GILT STRATEGY: a higher- or additional-rate taxpayer buys a deeply discounted short-dated gilt (e.g. a 0.125% coupon gilt trading at 92), receives a tiny taxable coupon, and takes the entire pull-to-par as a TAX-FREE capital gain. For a 45% taxpayer this converts a taxable 4.5% yield into an effectively tax-free one.
• UK GOLD SOVEREIGNS AND BRITANNIAS are legal tender and therefore EXEMPT FROM CGT. Gold bars and foreign coins are NOT.
• SPREAD BETS are exempt (not chargeable assets); CFDs and futures are chargeable. A genuine and legal distinction for short-term directional positions.
• Cars, and chattels sold for GBP 6,000 or less, are exempt (marginal relief above GBP 6,000); wasting chattels (with a predictable life under 50 years) are generally exempt.
• Premium Bond prizes, lottery and betting winnings: exempt.

OFFSHORE FUNDS: gains on funds WITHOUT UK "REPORTING FUND" STATUS are taxed as OFFSHORE INCOME GAINS at INCOME TAX RATES up to 45%, not at CGT rates, with no annual exempt amount. ALWAYS CONFIRM UK REPORTING FUND STATUS before buying a fund for a UK resident — the HMRC list is published, and most major Irish and Luxembourg UCITS classes have it, but many US-domiciled funds and some share classes do not.

LOSSES: allowable losses must be set against gains of the same year first (mandatory), with the excess carried forward INDEFINITELY (but must be CLAIMED within 4 years of the end of the tax year in which they arose — an easily missed formality). Carried-forward losses can be restricted so as to preserve the annual exempt amount. Negligible value claims allow a loss to be crystallised on a worthless holding without a disposal.

INCOME TAX at 20% / 40% / 45% (England, Wales and Northern Ireland). SCOTLAND'S separate rates (up to 48%) apply to non-savings, non-dividend income only — savings and dividend income use the UK-wide rates even for Scottish taxpayers.

PERSONAL SAVINGS ALLOWANCE: GBP 1,000 for basic-rate taxpayers, GBP 500 for higher-rate, GBP 0 for additional-rate. A STARTING RATE FOR SAVINGS of GBP 5,000 at 0% is available where non-savings income is low.

AUTUMN BUDGET 2025 (26 NOVEMBER 2025): the rates on SAVINGS INCOME were announced to RISE BY 2 PERCENTAGE POINTS FROM APRIL 2027, to 22% / 42% / 47%. Property income rates rise by the same 2 points from April 2027. VERIFY THE ENACTED LEGISLATION AND COMMENCEMENT.

The 45% (soon 47%) rate on interest against 24% on capital gains is a 21-23 point spread. Combined with the CGT exemption for gilts, this makes the low-coupon gilt trade one of the most valuable and least-used strategies available to UK taxable investors.

DIVIDEND ALLOWANCE: GBP 500 per person (cut from GBP 2,000 in 2022/23 and GBP 1,000 in 2023/24).

RATES (2025/26): 8.75% (basic) / 33.75% (higher) / 39.35% (additional).

AUTUMN BUDGET 2025: the ORDINARY and UPPER dividend rates rise BY 2 PERCENTAGE POINTS FROM APRIL 2026, to 10.75% and 35.75%; the additional rate was announced to remain at 39.35%. VERIFY THE ENACTED FIGURES.

PREFERENTIAL VERSUS INTEREST: yes — 39.35% versus 45% at the top, and 33.75% versus 40% for higher-rate taxpayers. A 5-6 point preference, widening to roughly 11 points from April 2027 when savings rates reach 47% while the additional dividend rate stays at 39.35%.

VERSUS CAPITAL GAINS at 24%: dividends are taxed 15 points worse for an additional-rate taxpayer. THE UK THEREFORE HAS A CLEAR HIERARCHY: CAPITAL GAINS (24%) < DIVIDENDS (39.35%) < INTEREST (45%, rising to 47%). Build taxable portfolios accordingly — accumulation and buybacks over dividends, and gilts over corporate bonds and cash.

Note that ACCUMULATION units of a UK reporting fund do NOT avoid dividend tax: the reported "excess reportable income" is taxable as it arises, and it increases the base cost. Accumulation helps administratively, not fiscally.

INHERITANCE TAX at 40% above the NIL RATE BAND of GBP 325,000 (frozen until 5 April 2031), plus a RESIDENCE NIL RATE BAND of GBP 175,000 where a home passes to direct descendants (tapered away by GBP 1 for every GBP 2 of estate above GBP 2,000,000). Both bands are transferable between spouses, giving a couple up to GBP 1,000,000.

• 36% reduced rate where at least 10% of the net estate passes to charity.
• Unlimited spouse exemption where the recipient spouse is UK-domiciled or a "long-term resident"; otherwise limited to GBP 325,000 unless an election is made.

LIFETIME GIFTS: a POTENTIALLY EXEMPT TRANSFER becomes fully exempt if the donor SURVIVES SEVEN YEARS. Taper relief reduces the TAX (not the value) on gifts between 3 and 7 years old, from 40% to 32%/24%/16%/8%. Gifts with reservation of benefit are ineffective.

ANNUAL EXEMPTIONS: GBP 3,000 per donor per year (one year's carry-forward), GBP 250 small gifts to any number of people, GBP 5,000/2,500/1,000 on marriage.

NORMAL EXPENDITURE OUT OF INCOME (s.21 IHTA 1984): gifts made regularly out of SURPLUS INCOME, which leave the donor able to maintain their usual standard of living, are IMMEDIATELY AND ENTIRELY EXEMPT with no seven-year wait and NO UPPER LIMIT. For a client with large investment income this is the most powerful and most under-used relief in the UK code. Contemporaneous records of income and expenditure are essential.

MAJOR CHANGES IN TRAIN:

• FROM 6 APRIL 2026: Business Property Relief and Agricultural Property Relief at 100% are CAPPED AT GBP 1,000,000 COMBINED, with 50% relief above (an effective 20% rate). AIM shares drop to 50% relief (effective 20%) with no GBP 1m allowance.
• FROM 6 APRIL 2027: UNUSED PENSION FUNDS AND DEATH BENEFITS BECOME SUBJECT TO INHERITANCE TAX. This reverses a decade of planning in which the pension was the preferred IHT-exempt wrapper, and it is the most consequential UK estate tax change in a generation. Combined with income tax on the beneficiary's drawdown where death occurs after 75, the effective combined rate can approach 67%. Pension drawdown strategy for over-70s must be revisited for every UK client.

THE END OF DOMICILE — FROM 6 APRIL 2025: IHT scope is now determined by LONG-TERM RESIDENCE, not domicile. An individual is within the scope of IHT on WORLDWIDE assets once UK-resident for 10 OF THE PREVIOUS 20 TAX YEARS, and remains so for a "tail" of between 3 and 10 years after leaving (3 years for 10-13 years of residence, rising by one year for each additional year of residence up to 10). EXCLUDED PROPERTY TRUSTS settled by a non-domiciliary lose their protection once the settlor becomes long-term resident. This is a fundamental restructuring and every trust established under the old rules needs review.

UNITED STATES: INCOME TAX TREATY in force (2001, effective 2003 — 0% withholding on dividends to 80%+ corporate holders and to pension funds, 5%/15% otherwise, 0% interest, mandatory arbitration, and a comprehensive limitation-on-benefits article). Note that the treaty does NOT recognise the ISA — a US person resident in the UK receives no US relief on ISA income and gains, and an ISA holding non-reporting funds creates PFIC problems.

US-UK ESTATE AND GIFT TAX TREATY in force (1978) — one of the most important, containing a DOMICILE TIE-BREAKER, situs rules, and credit provisions. The 2025 move from domicile to long-term residence for UK IHT creates real interpretive questions about how the treaty's domicile-based tie-breaker interacts with the new domestic test; TAKE SPECIALIST ADVICE FOR ANY US-UK ESTATE.

SWITZERLAND: INCOME TAX TREATY in force (1977, extensively amended, most recently 2017 — 0%/15% dividends, 0% interest). UK-SWITZERLAND ESTATE TAX TREATY in force (1993). The UK-Swiss "Rubik" withholding agreement was terminated in 2017 on the introduction of the Common Reporting Standard.

The UK has estate/inheritance tax treaties with France, India, Ireland, Italy, the Netherlands, Pakistan, South Africa, Sweden, Switzerland and the US.

ISA (Individual Savings Account): GBP 20,000 per person per tax year. NO tax on income, dividends, interest or capital gains, ever, and no reporting. Junior ISA GBP 9,000. Lifetime ISA GBP 4,000 (within the GBP 20,000) with a 25% government bonus for first-home purchase or from age 60.

AUTUMN BUDGET 2025: from APRIL 2027, the CASH ISA subscription limit is reduced to GBP 12,000 for those under 65, with the overall GBP 20,000 allowance retained and the balance available for stocks and shares. VERIFY.

A couple contributing GBP 40,000 per year for 25 years at 7% accumulates roughly GBP 2,700,000 entirely free of a 24% CGT and a 39.35% dividend tax.

PENSIONS (SIPP / occupational): annual allowance GBP 60,000, TAPERED to GBP 10,000 for those with adjusted income above GBP 260,000; three years of CARRY-FORWARD of unused allowance; Money Purchase Annual Allowance GBP 10,000 once flexibly accessed. Relief at the marginal rate (up to 45%, and an effective 60% between GBP 100,000 and GBP 125,140 where the personal allowance is being withdrawn — the single highest-return contribution in the UK system). The Lifetime Allowance was abolished in April 2024 and replaced by a Lump Sum Allowance of GBP 268,275 and a Lump Sum and Death Benefit Allowance of GBP 1,073,100. GROSS ROLL-UP INSIDE. NOTE THE APRIL 2027 IHT CHANGE ABOVE.

VCT: 30% income tax relief on up to GBP 200,000 per year, tax-free dividends, CGT-free disposals; 5-year holding period.

EIS: 30% income tax relief on up to GBP 1,000,000 per year (GBP 2,000,000 if at least GBP 1,000,000 is in knowledge-intensive companies); CGT-FREE after 3 years; CGT DEFERRAL RELIEF on any gain reinvested (unlimited amount, deferred until the EIS shares are sold); IHT business property relief after 2 years (subject to the 2026 GBP 1m cap); and loss relief against income at the marginal rate, which caps the downside at roughly 38.5% of the investment for a 45% taxpayer.

SEIS: 50% income tax relief on up to GBP 200,000, plus 50% CGT reinvestment relief.

OFFSHORE AND ONSHORE INVESTMENT BONDS: gross roll-up (offshore) with the "5% RULE" permitting withdrawals of 5% of the original premium per year for 20 years with NO immediate tax charge, TOP-SLICING RELIEF to spread the eventual chargeable event gain over the years held, and — critically — the ability to ASSIGN SEGMENTS TO A LOWER-RATE SPOUSE OR ADULT CHILD BEFORE ENCASHMENT, so that the gain is taxed at their rate rather than the donor's. A powerful and legitimate rate-shifting tool.

FAMILY INVESTMENT COMPANIES (FICs): a company holding the portfolio, paying 25% corporation tax with the dividend exemption on most equity income (so UK and most foreign dividends are effectively untaxed at company level), growth accruing to the next generation's shares, and the founder retaining control through voting shares. The standard replacement for trusts since the 2006 IHT changes made lifetime trusts expensive.

DISCOUNTED GIFT TRUSTS and LOAN TRUSTS: immediate or gradual IHT reduction while retaining an income stream or access to capital.

No net wealth tax. State LAND TAX applies to investment property (not the principal residence) at progressive rates up to about 2.75% of unimproved land value, with thresholds varying by state and surcharges for foreign owners.

DIVISION 296 — THE "$3 MILLION SUPER TAX": a proposed additional 15% tax on earnings attributable to superannuation balances above A$3,000,000. The original 2023 design taxed UNREALISED gains and did not index the threshold, and attracted sustained criticism. IN OCTOBER 2025 THE GOVERNMENT ANNOUNCED A SUBSTANTIALLY REVISED MEASURE: taxing REALISED earnings only, INDEXING the thresholds, adding a SECOND TIER at A$10,000,000 (an additional 25%, for a total of 40%), and DEFERRING COMMENCEMENT TO 1 JULY 2026. VERIFY THE ENACTED LEGISLATION — this has been amended more than once and is the most significant open item in Australian investment tax.

If enacted as revised, it is a targeted 30%/40% earnings tax on large super balances rather than a wealth tax, but it materially changes the calculus of holding assets inside versus outside superannuation for balances above A$3m.

AUSTRALIA HAS NO SEPARATE CAPITAL GAINS TAX. Net capital gains are INCLUDED IN ASSESSABLE INCOME and taxed at marginal rates:

• Nil to A$18,200: 0%
• A$18,201 to A$45,000: 16% (falling to 15% from 1 July 2026 and 14% from 1 July 2027 under the 2025 Budget measures)
• A$45,001 to A$135,000: 30%
• A$135,001 to A$190,000: 37%
• Above A$190,000: 45%

PLUS the 2% Medicare levy => TOP MARGINAL RATE 47%.

THE 50% CGT DISCOUNT — THE DEFINING FEATURE: an individual (or a trust) who has held an asset for MORE THAN 12 MONTHS includes only HALF the capital gain in assessable income. A complying superannuation fund gets a 33.33% discount (so a 15% rate becomes 10% effective).

EFFECTIVE TOP RATES: 23.5% on a discounted (long-term) gain versus 47% on an undiscounted (short-term) gain. THE TWELVE-MONTH ANNIVERSARY IS WORTH 23.5 PERCENTAGE POINTS — one of the cleanest and largest long-term holding incentives in this table.

LOSSES: capital losses may be offset ONLY against capital gains, never against ordinary income. They are carried forward INDEFINITELY with no time limit and no carryback.

THE CRITICAL TECHNICAL POINT: CAPITAL LOSSES ARE APPLIED BEFORE THE 50% DISCOUNT. A dollar of loss therefore shelters a full dollar of undiscounted gain but only fifty cents of the taxable portion of a discounted gain. THE OPTIMAL ORDER IS TO APPLY LOSSES AGAINST UNDISCOUNTED (SHORT-TERM) GAINS FIRST, then against discounted gains. Getting this wrong halves the value of every harvested loss, and it is frequently mishandled.

ASSET-CLASS RULES:

• COLLECTABLES (art, jewellery, antiques, coins, stamps, rare manuscripts): EXEMPT if acquired for A$500 or less. Losses on collectables are QUARANTINED — deductible only against collectable gains, carried forward indefinitely.
• PERSONAL USE ASSETS (boats, furniture, non-collectable personal items): exempt if acquired for A$10,000 or less; LOSSES ARE ENTIRELY DISREGARDED.
• GOLD BULLION: an ordinary CGT asset; the 50% discount is available. Not a collectable.
• CRYPTO: an ordinary CGT asset; the 50% discount is available after 12 months. Crypto-to-crypto swaps are disposals.
• MAIN RESIDENCE: fully exempt (with a 6-year absence rule).
• Pre-CGT assets (acquired before 20 September 1985): exempt, and they receive a market-value cost base on death.

FOREIGN RESIDENTS: only "TAXABLE AUSTRALIAN PROPERTY" (real property and indirect interests in land-rich entities) remains within the Australian CGT net after ceasing residence. Portfolio SHARES fall out of the net entirely. BUT CGT EVENT I1 deems a disposal of non-taxable-Australian-property assets on ceasing residence — UNLESS the individual ELECTS to defer, treating the assets as taxable Australian property until actually sold or until residence resumes. THE ELECTION IS CRITICAL FOR ANY DEPARTING AUSTRALIAN: electing to defer avoids an immediate tax bill but keeps the assets in the Australian net; not electing crystallises the gain now but frees future growth entirely. Foreign residents also LOSE the 50% discount for periods of foreign residence after 8 May 2012.

Fully assessable at marginal rates, top 47% including the Medicare levy. No exemption, no allowance and no discount.

Interest is the most heavily taxed form of investment return in Australia — 47% versus 23.5% on a discounted capital gain, a 23.5-point spread.

Non-residents receive Australian-source interest subject to a 10% final withholding tax.

DIVIDEND IMPUTATION (FRANKING CREDITS) — THE MOST DISTINCTIVE FEATURE OF THE AUSTRALIAN SYSTEM, AND THE ONE THAT DOMINATES DOMESTIC PORTFOLIO CONSTRUCTION.

An Australian company that has paid 30% corporate tax (25% for a "base rate entity") attaches FRANKING CREDITS to its dividends. The shareholder GROSSES UP the cash dividend by the credit, includes the grossed-up amount in assessable income, and then claims the credit against their tax liability. CRUCIALLY, THE CREDIT IS FULLY REFUNDABLE IN CASH if it exceeds the shareholder's tax.

WORKED MECHANICS: a company earns A$100, pays A$30 of tax, and distributes A$70 fully franked.

• A 47% shareholder: assessable income A$100, tax A$47, less A$30 credit = A$17 net tax on A$70 of cash — an EFFECTIVE 17% RATE (versus 47% on interest).
• A 30% shareholder: A$30 tax less A$30 credit = A$0 NET TAX.
• A superannuation fund in ACCUMULATION phase (15%): A$15 tax less A$30 credit = A$15 CASH REFUND, an effective NEGATIVE tax rate.
• A superannuation fund in PENSION phase (0%) or a retiree below the tax-free threshold: A$30 CASH REFUND. The A$70 dividend becomes A$100 in the hand.

THIS IS WHY AUSTRALIAN RETIREES AND SUPERANNUATION FUNDS ARE STRUCTURALLY OVERWEIGHT DOMESTIC HIGH-YIELDING BANKS AND MINERS, AND IT IS A LEGITIMATE, LARGE AND PERSISTENT AFTER-TAX EDGE.

THE 45-DAY HOLDING RULE: franking credits are denied unless the shares are held AT RISK for at least 45 days (90 for preference shares), excluding the days of acquisition and disposal, and disregarding periods when the position is materially hedged (a delta of 30% or less). A A$5,000 small shareholder exemption applies where total franking credits for the year are under A$5,000.

UNFRANKED AND FOREIGN DIVIDENDS: fully assessable at marginal rates up to 47%, with a Foreign Income Tax Offset for foreign withholding tax (capped, and subject to a A$1,000 de minimis). NO franking credit is available on foreign dividends.

THE ASYMMETRY IS THEREFORE VERY LARGE: a fully franked Australian dividend costs a top-rate investor 17%; the same cash dividend from a US or European company costs 47% less the foreign tax offset — roughly 32% net. THE 15-POINT GAP DRIVES THE HOME BIAS OF AUSTRALIAN PORTFOLIOS AND IS A REAL, NOT BEHAVIOURAL, EFFECT.

NO INHERITANCE TAX, NO ESTATE DUTY AND NO GIFT TAX. Federal estate duty was abolished in 1979 and the states followed by 1984. Australia has levied nothing on wealth transfer for four decades.

BUT — AND THIS IS THE POINT ADVISERS MISS — THERE IS NO STEP-UP IN BASIS EITHER. On death, assets pass to the legal personal representative and then to beneficiaries under a CGT ROLLOVER: the beneficiary inherits the DECEASED'S COST BASE and acquisition date. The latent capital gains tax is DEFERRED, not forgiven. When the beneficiary eventually sells, the full gain since the deceased's original acquisition is taxable (with the 50% discount, and the deceased's holding period counted).

EXCEPTIONS: pre-CGT assets (acquired before 20 September 1985) receive a MARKET-VALUE cost base at death — genuinely forgiven. And the main residence retains its exemption if sold within two years of death.

THE REAL "DEATH TAX" IS ON SUPERANNUATION: a superannuation death benefit paid to a NON-DEPENDANT (which for tax purposes includes an ADULT CHILD who is not financially dependent) is taxed at 15% plus the 2% Medicare levy on the TAXABLE COMPONENT, and 30% plus Medicare on any untaxed element. A A$2,000,000 super balance that is 80% taxable component leaves A$272,000 of tax on the way to adult children.

THE STANDARD RESPONSES: (i) the RECONTRIBUTION STRATEGY — withdraw a tax-free lump sum after age 60 and recontribute it as a non-concessional contribution, converting taxable component into tax-free component; and (ii) a WITHDRAWAL BEFORE DEATH under an enduring power of attorney where death is imminent, since a benefit paid to the member (rather than to the estate) while alive is tax-free after 60. Both are entirely legitimate and routinely used.

Testamentary trusts established under a will are widely used: they permit income splitting to minor beneficiaries at ADULT marginal rates (an exception to the punitive minor-beneficiary rules), giving each grandchild an effective tax-free threshold.

UNITED STATES: INCOME TAX TREATY in force (1982; 2001 Protocol — 0% withholding on dividends to 80%+ corporate holders, 5%/15% otherwise, 10% interest, and a limitation-on-benefits article). Note the treaty does NOT protect Australian superannuation from US taxation for US persons — a well-known and unresolved problem for US citizens resident in Australia.

US-AUSTRALIA ESTATE TAX TREATY in force (1953). Australia levies no estate tax, so its practical effect is to relieve US estate tax on US-situs assets held by Australian residents — where it remains valuable.

SWITZERLAND: INCOME TAX TREATY in force (2013, replacing the 1980 treaty — 0%/5%/15% dividends, 0%/10% interest, with mandatory arbitration). No estate tax treaty with Switzerland.

SUPERANNUATION — THE CENTRAL AUSTRALIAN STRATEGY, AND ONE OF THE MOST GENEROUS RETIREMENT SYSTEMS IN THE DEVELOPED WORLD.

• CONCESSIONAL (pre-tax) CONTRIBUTIONS: A$30,000 per year (2024-25 and 2025-26), taxed at 15% on entry (30% under Division 293 for those with income above A$250,000). Employer Superannuation Guarantee contributions count towards this.
• CARRY-FORWARD: unused concessional cap from the previous FIVE financial years may be used in a single year, provided the total superannuation balance was under A$500,000 at the previous 30 June. A one-off catch-up of up to A$150,000 is therefore possible — extremely valuable in a year with a large capital gain.
• NON-CONCESSIONAL (after-tax) CONTRIBUTIONS: A$120,000 per year, or A$360,000 using the three-year BRING-FORWARD rule, subject to the total superannuation balance test.
• EARNINGS INSIDE: taxed at 15% in ACCUMULATION phase (and 10% effective on discounted capital gains), and at ZERO in RETIREMENT (pension) phase up to the TRANSFER BALANCE CAP of A$2,000,000 (from 1 July 2025, indexed).
• Benefits after age 60 are entirely TAX-FREE.

A A$2,000,000 pension-phase balance receiving fully franked dividends pays no tax AND receives cash refunds of the franking credits — an effective NEGATIVE tax rate on Australian equity income.

NEGATIVE GEARING: interest and holding costs on an income-producing investment (property or shares) are deductible against ALL income, including salary, without quarantine. Combined with the 50% CGT discount, this converts fully deductible ordinary expenses into concessionally taxed capital gains — the arithmetic underpinning much of Australian property investment. Politically contested but currently intact.

FAMILY (DISCRETIONARY) TRUSTS: permit annual discretionary distribution of income and capital gains among family beneficiaries, streaming franked dividends and discounted capital gains to the members with the lowest marginal rates. Note the punitive minor-beneficiary rates (up to 66% above A$416) which testamentary trusts avoid, and section 100A which the ATO has applied aggressively since 2022 to "reimbursement agreements" where the presently entitled beneficiary does not actually receive the benefit.

INVESTMENT (INSURANCE) BONDS: a life company pays tax on earnings at 30% internally. After TEN YEARS the proceeds are received entirely TAX-FREE by the investor, with no assessable income at all — so for a 47% taxpayer the effective rate on the whole return is 30%, and for a 45%+ investor who would otherwise pay 47% on income, this is a 17-point saving with no annual reporting. The "125% rule" permits contributions of up to 125% of the previous year's without restarting the ten-year clock.

SMALL BUSINESS CGT CONCESSIONS: the 15-year exemption, the 50% active asset reduction, the retirement exemption (A$500,000 lifetime) and the rollover — collectively capable of eliminating tax on a business sale entirely, and permitting a A$1,780,000 CGT cap contribution to superannuation outside the ordinary caps.

No net wealth tax at federal or provincial level. Municipal property taxes range from roughly 0.3% (Vancouver) to 1.3% (Winnipeg, Halifax) of assessed value.

Additional property-specific levies: the federal Underused Housing Tax (1% on vacant or underused residential property owned by non-residents and certain entities), the BC Speculation and Vacancy Tax (0.5%-2%), the Vancouver Empty Homes Tax (3%) and the Toronto Vacant Home Tax (3%). These target vacancy and foreign ownership rather than wealth generally.

A federal wealth tax has been proposed by the NDP (1% above C$10m; 3% above C$10m in later versions) but has never been enacted by any government.

THE INCLUSION RATE IS 50%. Only ONE HALF of a capital gain is included in income and taxed at ordinary marginal rates. Only one half of a capital loss is an "allowable capital loss".

THE 2024-2025 SAGA — RESOLVED: Budget 2024 proposed raising the inclusion rate to 66.67% on gains above C$250,000 for individuals (and on all gains for corporations and most trusts), effective 25 June 2024. Implementation was deferred to 1 January 2026 in January 2025, and THE MEASURE WAS CANCELLED OUTRIGHT IN MARCH 2025. THE INCLUSION RATE REMAINS 50%. Confirm no successor proposal is live before relying on this.

COMBINED TOP MARGINAL RATES (federal 33% above roughly C$253,000 plus provincial) and the resulting EFFECTIVE CAPITAL GAINS RATES:

• Alberta 48.0% => 24.0%
• British Columbia 53.5% => 26.75%
• Ontario 53.53% => 26.76%
• Quebec 53.31% => 26.65%
• Nova Scotia 54.0% => 27.0%
• Newfoundland & Labrador 54.8% => 27.4%

(Note the lowest federal rate fell from 15% to 14% with effect from 1 July 2025.)

NO LONG-TERM/SHORT-TERM DISTINCTION and no indexation (abolished 1971 with the introduction of CGT). Basis is the ADJUSTED COST BASE, computed as a WEIGHTED AVERAGE across all identical properties — no specific identification and no FIFO election.

LOSSES: allowable capital losses may be offset ONLY against taxable capital gains, never against ordinary income. Carried BACK THREE YEARS and forward INDEFINITELY. The three-year carryback is genuinely valuable and is often overlooked — a loss realised now can generate a refund of tax paid up to three years ago.

THE SUPERFICIAL LOSS RULE — STRICTER THAN THE US WASH SALE RULE: a loss is DENIED (and added to the ACB of the replacement property) where identical property is acquired in the period from 30 DAYS BEFORE to 30 DAYS AFTER the disposal, by the taxpayer OR BY AN "AFFILIATED PERSON" — which includes the SPOUSE OR COMMON-LAW PARTNER, a corporation controlled by the taxpayer or spouse, and — critically — THE TAXPAYER'S OWN RRSP OR TFSA. Selling a stock at a loss in a taxable account and buying it in a TFSA within 30 days DENIES THE LOSS PERMANENTLY (it is added to the TFSA property's ACB, which is worthless since the TFSA is tax-exempt). This trap catches Canadian investors constantly.

ASSET-CLASS RULES:

• LISTED PERSONAL PROPERTY (art, jewellery, rare folios and manuscripts, stamps, coins): a C$1,000 DEEMED MINIMUM for both proceeds and ACB, so small gains disappear. LPP losses may only be applied against LPP gains, carried back 3 years and forward SEVEN.
• PERSONAL-USE PROPERTY: same C$1,000 rule; LOSSES ARE ENTIRELY DENIED.
• GOLD BULLION: ordinary capital property, 50% inclusion.
• FOREIGN EXCHANGE gains and losses on personal transactions: the first C$200 of net annual gain is exempt.
• OPTIONS AND FUTURES: capital or income depending on the facts. The SECTION 39(4) ELECTION allows a taxpayer to have ALL dispositions of "Canadian securities" treated as capital — it is irrevocable and does NOT cover derivatives, foreign securities or commodities.
• PRINCIPAL RESIDENCE EXEMPTION: full exemption on one property per family per year, with a mandatory reporting requirement.
• DONATIONS OF PUBLICLY LISTED SECURITIES IN KIND: THE CAPITAL GAINS INCLUSION RATE IS REDUCED TO ZERO. See Deferral.

FULLY TAXABLE AT MARGINAL RATES — up to 54.8%. No allowance, no exemption, no preference of any kind. Interest is the most heavily taxed form of investment return in Canada.

ACCRUAL REQUIREMENT: interest on compound-interest instruments (strip bonds, GICs with deferred payment, prescribed debt obligations) must be accrued and reported ANNUALLY on each anniversary date, even though no cash is received. This is a serious cash-flow trap for zero-coupon holdings in taxable accounts.

The spread between interest (54.8%) and capital gains (27.4%) is 27.4 points, and between interest and eligible dividends (39.3% in Ontario) is 15.5 points. FIXED INCOME BELONGS IN AN RRSP OR TFSA, ALWAYS.

CANADA OPERATES A GROSS-UP AND DIVIDEND TAX CREDIT SYSTEM, AND THE DISTINCTION BETWEEN CANADIAN AND FOREIGN DIVIDENDS IS THE LARGEST ASSET-LOCATION FACT IN THE COUNTRY.

ELIGIBLE DIVIDENDS (from Canadian public companies and CCPCs paying the general corporate rate): grossed up by 38%, with a federal dividend tax credit of 15.0198% of the grossed-up amount plus a provincial credit. TOP COMBINED EFFECTIVE RATES: Alberta 34.31%, British Columbia 36.54%, Ontario 39.34%, Quebec 40.11%.

NON-ELIGIBLE DIVIDENDS (from the small-business-rate income of a CCPC): grossed up by 15%, smaller credit. Top effective rates roughly 42%-48%.

FOREIGN DIVIDENDS RECEIVE NO GROSS-UP AND NO DIVIDEND TAX CREDIT. They are taxed as ORDINARY INCOME at up to 54.8%, with only a foreign tax credit for withholding tax actually suffered (capped at the Canadian tax on that income).

THE COMPARISON IS STARK: a C$100 eligible Canadian dividend costs an Ontario top-rate investor C$39.34; a C$100 US dividend costs C$53.53 less a C$15 foreign tax credit on the withholding = an all-in burden of roughly C$53.53 including the withholding. THE GAP IS ROUGHLY 14 POINTS.

THE RRSP US-DIVIDEND EXEMPTION — ONE OF THE MOST VALUABLE ASSET-LOCATION RULES ANYWHERE: under Article XXI of the Canada-US tax treaty, US withholding tax on dividends paid to a CANADIAN RRSP OR RRIF IS ZERO, provided the US securities are held DIRECTLY (or through a US-listed ETF), not through a Canadian-listed ETF or mutual fund that itself holds US securities.

• US stocks or a US-LISTED US-equity ETF inside an RRSP: 0% US withholding.
• The same exposure in a TFSA or a taxable account: 15% US withholding (and in a TFSA the withholding is NOT recoverable and NOT creditable — a permanent loss).
• A CANADIAN-LISTED ETF holding US stocks, inside an RRSP: 15% withholding at the fund level, NOT recoverable.

THE CORRECT CANADIAN ASSET LOCATION IS THEREFORE: US equities (held directly or via US-listed ETFs) in the RRSP; Canadian dividend payers in the taxable account (to use the dividend tax credit); high-growth, low-yield assets in the TFSA; and bonds in the RRSP.

NO ESTATE TAX, NO INHERITANCE TAX AND NO GIFT TAX. Canada has levied none since 1972.

INSTEAD: A DEEMED DISPOSITION AT DEATH. Immediately before death the taxpayer is deemed to have disposed of all capital property at FAIR MARKET VALUE, triggering capital gains on the FINAL (terminal) RETURN. The estate's beneficiaries then receive the assets with a stepped-up cost base.

• SPOUSAL ROLLOVER: property passing to a spouse, common-law partner, or a qualifying spousal trust rolls over at cost — deferring all tax until the survivor's death or an earlier disposition. An election to opt out on specific assets is available where realising a gain (or a loss) on the first death is advantageous.
• RRSPs AND RRIFs: the ENTIRE FAIR MARKET VALUE is included in income on the final return, at rates up to 54.8% — UNLESS rolled over to a spouse, a financially dependent minor or infirm child, or a registered disability savings plan. FOR MANY CANADIANS THIS IS THE SINGLE LARGEST TAX BILL OF THEIR LIVES: a C$1,500,000 RRIF passing to adult children generates roughly C$800,000 of tax.
• TFSAs: pass tax-free; a spouse may be named successor holder and absorb the entire account into their own TFSA without using contribution room.
• PRINCIPAL RESIDENCE: exempt.

PROVINCIAL PROBATE / ESTATE ADMINISTRATION TAX: Ontario 1.5% of the estate value above C$50,000; British Columbia roughly 1.4%; Nova Scotia ~1.7%; ALBERTA CAPS IT AT C$525 REGARDLESS OF ESTATE SIZE; Quebec has no probate fee for notarial wills. Standard mitigation: multiple wills (Ontario, separating shares in private companies), joint ownership with right of survivorship (with attribution and intention risks), named beneficiaries on registered plans and insurance, and alter ego / joint partner trusts for those 65+.

DEPARTURE TAX: ceasing Canadian residence triggers a deemed disposition of most property at fair market value (excluding Canadian real property, RRSPs, TFSAs and certain pension rights). Tax may be DEFERRED without interest by posting acceptable security until the property is actually sold — a routine and important election for departing Canadians.

UNITED STATES: INCOME TAX TREATY in force (1980, with FIVE protocols; the Fifth Protocol of 2007 is the most significant). Key features for investors:

• ARTICLE XXI: US-source dividends and interest paid to a Canadian RRSP or RRIF are EXEMPT from US withholding tax — the single most valuable treaty provision for Canadian portfolios (see Dividends).
• ARTICLE XVIII(7): elective deferral of US taxation on income accruing in an RRSP/RRIF for US persons — essential for US citizens in Canada.
• ARTICLE XXIX B: ESTATE TAX RELIEF DELIVERED THROUGH THE INCOME TREATY RATHER THAN A SEPARATE ESTATE TREATY. It provides (i) a PRO-RATED US UNIFIED CREDIT for Canadian residents (the full US exemption multiplied by the ratio of US-situs assets to worldwide assets, instead of the US$60,000 non-resident exemption), (ii) a MARITAL CREDIT effectively doubling the exemption for property passing to a spouse, and (iii) a credit against Canadian tax for US estate tax paid. THERE IS NO SEPARATE US-CANADA ESTATE TAX TREATY — this is it, and it is generous.

PRACTICAL EFFECT: a Canadian with a C$20m worldwide estate including C$4m of US-situs shares gets a unified credit of 20% of the full US$15m exemption = US$3m of exemption, so no US estate tax arises. A Canadian with a C$100m estate and C$20m of US shares gets 20% of US$15m = US$3m, leaving US$17m exposed at 40%.

• Withholding: 15% portfolio dividends, 5% for 10%+ corporate holders, 0% interest.

SWITZERLAND: INCOME TAX TREATY in force (1997; 2010 Protocol — 5%/15% dividends, 0%/10% interest). No estate tax treaty with Switzerland.

RRSP (Registered Retirement Savings Plan): contributions of 18% of prior-year earned income, capped at approximately C$32,490 (2025) and C$33,810 (2026), deductible at the marginal rate (up to 54.8%). Unused room carries forward indefinitely. Gross roll-up; withdrawals fully taxable at marginal rates; conversion to a RRIF by 31 December of the year the holder turns 71, with minimum withdrawals thereafter. SPOUSAL RRSPs permit income splitting in retirement (subject to a three-year attribution rule).

THE US-DIVIDEND EXEMPTION (Article XXI) makes the RRSP the correct home for US equities held directly or via US-listed ETFs.

TFSA (Tax-Free Savings Account): C$7,000 for 2025 (indexed); CUMULATIVE ROOM of C$102,000 by 2025 for anyone eligible since 2009, rising to roughly C$109,000 for 2026. NO deduction on contribution, but ALL growth, dividends, interest and withdrawals are COMPLETELY TAX-FREE, and withdrawn amounts are re-added to contribution room the following calendar year. Not counted for income-tested benefits (OAS clawback, GIS). THE HIGHEST-EXPECTED-RETURN ASSETS BELONG HERE. Note: US withholding on US dividends is NOT recoverable in a TFSA.

FHSA (First Home Savings Account): C$8,000 per year, C$40,000 lifetime — deductible like an RRSP AND tax-free on qualifying withdrawal like a TFSA. Uniquely double-advantaged.

RESP: C$50,000 lifetime per beneficiary, attracting the Canada Education Savings Grant at 20% of the first C$2,500 per year (C$500 annually, C$7,200 lifetime) — a guaranteed 20% return.

RDSP: for disabled beneficiaries, with grants and bonds of up to C$70,000 and C$20,000 respectively.

DONATION OF APPRECIATED PUBLICLY LISTED SECURITIES IN KIND — THE BEST CHARITABLE STRUCTURE IN THE WORLD: donating listed securities directly to a registered charity reduces the CAPITAL GAINS INCLUSION RATE TO ZERO, while still generating a donation tax credit on the FULL fair market value. Selling and donating cash triggers the gain; donating in kind does not.

PRESCRIBED RATE LOAN TO A SPOUSE OR FAMILY TRUST: lend capital at the CRA prescribed rate (which fell from 6% to 4% during 2024 and to 3% during 2025 — verify the current quarter's rate), with interest paid annually by 30 January. Income and gains above the prescribed rate accrue to the lower-income spouse or to the trust beneficiaries, permanently escaping the attribution rules. THE LOWER THE PRESCRIBED RATE, THE MORE VALUABLE THIS IS — and a loan locks in the rate in force when it is made, FOR THE LIFE OF THE LOAN.

ESTATE FREEZE (section 85 or 86 rollover): exchange common shares of a private company for fixed-value preferred shares, and issue new common shares to a family trust. All future growth accrues to the next generation, capping the freezor's deemed disposition at death. Combined with multiple lifetime capital gains exemptions (C$1,250,000 per person on qualified small business corporation shares, indexed) this can shelter several million dollars of business value.

INDIVIDUAL PENSION PLAN (IPP): a defined-benefit plan for an owner-manager aged 40+, permitting deductible contributions well above the RRSP limit, plus deductible past-service funding and terminal funding.

EXEMPT LIFE INSURANCE: tax-free internal growth and a tax-free death benefit; corporate-owned policies generate a CAPITAL DIVIDEND ACCOUNT credit allowing the proceeds to be paid to shareholders TAX-FREE — the standard solution for funding the deemed-disposition tax on a private company at death.

No net wealth tax. The Davis Tax Committee examined one in 2018 and found the data and administrative base inadequate; it has been repeatedly proposed by COSATU and others but never enacted. Estate duty and donations tax (below) serve the wealth-transfer function.

Municipal property rates apply on market value, typically 0.5%-1.5% per year with a statutory first R15,000 of value exempt and further municipal reductions.

EXCHANGE CONTROL (now the "capital flow management" framework) is a genuine constraint that has no analogue elsewhere in this table:

• SINGLE DISCRETIONARY ALLOWANCE: R1,000,000 per adult per calendar year, transferable offshore with no tax clearance.
• FOREIGN INVESTMENT ALLOWANCE: a further R10,000,000 per adult per calendar year, requiring an Approval for International Transfer (AIT) tax compliance status PIN from SARS — which since 2023 requires disclosure of the source of funds AND, for amounts above R10m, a full statement of assets and liabilities for the preceding three years.
• "LOOP STRUCTURES" (a South African resident owning an offshore entity that in turn holds South African assets) were liberalised in 2021 up to 100%, subject to reporting.

Practically, a couple can externalise R22,000,000 per year. Beyond that, SARB approval is required. THIS SHAPES PORTFOLIO CONSTRUCTION: many South African investors gain offshore exposure through RAND-DENOMINATED, JSE-LISTED FEEDER FUNDS AND ETFs (which do not use the allowances) rather than by physically externalising capital.

CAPITAL GAINS TAX IS NOT A SEPARATE TAX — a portion of the net capital gain is included in taxable income and taxed at marginal rates.

INCLUSION RATES:

• INDIVIDUALS AND SPECIAL TRUSTS: 40%. With a top marginal rate of 45%, the EFFECTIVE MAXIMUM CGT RATE IS 18%.
• COMPANIES: 80% inclusion at 27% => 21.6% effective.
• ORDINARY TRUSTS: 80% inclusion at 45% => 36% effective — which is why gains are almost always distributed to beneficiaries under the section 25B conduit principle rather than retained in a trust.

ANNUAL EXCLUSION: R40,000 of net capital gain per individual per year (R300,000 IN THE YEAR OF DEATH). PRIMARY RESIDENCE EXCLUSION: R2,000,000 of gain.

NO LONG-TERM/SHORT-TERM RATE DISTINCTION — BUT THERE IS A DECISIVE CAPITAL-VERSUS-REVENUE DISTINCTION:

SECTION 9C SAFE HARBOUR: the proceeds from the disposal of EQUITY SHARES (listed or unlisted) HELD FOR A CONTINUOUS PERIOD OF AT LEAST THREE YEARS ARE DEEMED TO BE OF A CAPITAL NATURE. This converts what might otherwise be revenue (taxed at up to 45%) into capital (18%). The corollary is that a loss on a share held under three years may be a REVENUE loss deductible at 45% — sometimes advantageous.

SHARES HELD FOR LESS THAN THREE YEARS are assessed on ordinary common-law principles (intention, frequency, holding period, manner of financing). A frequent trader is taxed on REVENUE ACCOUNT at up to 45%, with no annual exclusion. THE THREE-YEAR RULE IS THEREFORE THE SOUTH AFRICAN EQUIVALENT OF THE SWISS CIRCULAR 36 SAFE HARBOUR, AND IT IS WORTH 27 PERCENTAGE POINTS.

Section 9C does not apply to non-equity instruments — bonds, derivatives, commodities and crypto have no safe harbour and are assessed on intention.

LOSSES: an assessed capital loss is RING-FENCED and may be set off only against capital gains, carried forward indefinitely. Capital losses on disposals to connected persons are ring-fenced to gains on disposals to that same person.

ASSET-CLASS RULES:

• PERSONAL-USE ASSETS (art, furniture, private motor vehicles, boats under 10m, aircraft under 450kg) are EXCLUDED from CGT — and so are losses on them.
• CRITICAL EXCEPTION: COINS MADE MAINLY FROM GOLD OR PLATINUM (Krugerrands) ARE NOT personal-use assets, and are fully within CGT. Gold bullion likewise. So art is outside the net and Krugerrands are inside it.
• CRYPTO: SARS treats it as an intangible asset; capital or revenue depending on intention, with frequent trading taxed at 45%.
• Derivatives and futures: generally revenue account unless clearly hedging a capital asset.

DEEMED DISPOSAL ON EMIGRATION: ceasing South African tax residence triggers a deemed disposal of worldwide assets (excluding SA immovable property and certain others) at market value — the "exit charge". Combined with the three-year financial emigration process and the AIT regime, departure planning is complex and should start early.

FULLY TAXABLE AT MARGINAL RATES up to 45%, BUT WITH A GENUINE ANNUAL EXEMPTION:

• R23,800 per year for individuals UNDER 65
• R34,500 per year for individuals 65 AND OVER

The exemption applies to SOUTH AFRICAN-SOURCE interest only. FOREIGN INTEREST IS FULLY TAXABLE FROM THE FIRST RAND with no exemption.

At current money-market rates the exemption shelters roughly R280,000-R400,000 of capital for a person under 65 — meaningful for smaller portfolios, immaterial for large ones.

Interest at 45% versus capital gains at 18% is a 27-point spread, and versus dividends at 20% a 25-point spread. FIXED INCOME IS THE MOST HEAVILY TAXED ASSET CLASS IN SOUTH AFRICA and belongs inside a retirement fund or an endowment.

DIVIDENDS TAX: a 20% FINAL WITHHOLDING TAX on dividends paid by South African resident companies (and on dividends on JSE-listed foreign shares). The recipient is EXEMPT from normal income tax on the dividend. Withheld and paid over by the company or the regulated intermediary.

FOREIGN DIVIDENDS: taxed under section 10B, which exempts a fraction of the dividend so as to produce a MAXIMUM EFFECTIVE RATE OF 20% for individuals — specifically, 25/45ths of the foreign dividend is exempt, so 20/45ths is taxed at 45% = 20% effective. A credit is available for foreign withholding tax, but only against the tax on the taxable portion, so foreign withholding above 20% is partly wasted.

Dividends from a company in which the shareholder holds at least 10% are fully exempt (the participation exemption).

REIT DISTRIBUTIONS ARE THE MAJOR EXCEPTION: distributions from a South African REIT are NOT dividends for this purpose. They are FULLY TAXABLE AS ORDINARY INCOME at up to 45%, with no dividends tax. A JSE-listed property portfolio yielding 8% therefore costs a top-rate investor 45%, not 20% — a 25-point difference that is regularly overlooked in South African income portfolios. (Correspondingly, REIT distributions to a RETIREMENT FUND are entirely tax-free, which is why property is the classic retirement-fund holding.)

PREFERENCE VERSUS INTEREST: yes, and it is large — 20% on dividends versus up to 45% on interest, a 25-point advantage. Combined with 18% on capital gains, the South African hierarchy is: CAPITAL GAINS (18%) < DIVIDENDS (20%) < REIT DISTRIBUTIONS AND INTEREST (45%).

SOUTH AFRICA HAS BOTH AN ESTATE DUTY AND A DONATIONS TAX, AND ALSO TREATS DEATH AS A DEEMED DISPOSAL FOR CGT — SO THREE CHARGES CAN INTERACT.

ESTATE DUTY: 20% on the dutiable estate up to R30,000,000, and 25% ON THE EXCESS ABOVE R30,000,000.

• SECTION 4A ABATEMENT: R3,500,000 per estate, PORTABLE between spouses — so a surviving spouse's estate has a R7,000,000 abatement.
• SECTION 4(q): bequests to a SURVIVING SPOUSE ARE FULLY EXEMPT, deferring all duty to the second death.
• Retirement fund benefits (pension, provident, preservation and retirement annuity funds) are EXCLUDED from the dutiable estate — the single most valuable estate duty exclusion in South African law.
• Proceeds of domestic life policies are generally included unless they meet specific exemptions (buy-and-sell and keyperson policies, and policies ceded to a spouse or child in terms of an antenuptial contract).

DONATIONS TAX: 20% on cumulative donations up to R30,000,000, 25% above. Payable by the DONOR.

• ANNUAL EXEMPTION: R100,000 per donor per year.
• DONATIONS BETWEEN SPOUSES ARE FULLY EXEMPT — unlimited.
• Donations to public benefit organisations are exempt.

CGT ON DEATH: death is a deemed disposal at market value of all assets, with an R300,000 annual exclusion in the year of death. The resulting CGT is a liability of the estate and IS DEDUCTIBLE in computing the dutiable estate — mitigating but not eliminating the double charge. Assets bequeathed to a surviving spouse roll over at base cost.

COMBINED EFFECT: on a large estate, CGT at 18% followed by estate duty at 20%-25% on the net gives a combined effective rate of roughly 34%-38% on appreciated assets.

SECTION 7C — THE INTEREST-FREE LOAN RULE: where a natural person makes an interest-free or low-interest loan to a TRUST (or to a company owned by a trust) in which they or a connected person has an interest, the FOREGONE INTEREST (measured against the "official rate", currently around 8.75%-9.25% — verify) is DEEMED TO BE AN ONGOING ANNUAL DONATION, subject to 20% donations tax each year. This provision, introduced in 2017 and tightened since, destroyed the classic South African estate freeze (sell assets to a trust on an interest-free loan account and let the growth accrue outside the estate). The standard responses are to charge interest at the official rate (creating taxable interest income for the lender), to progressively waive R100,000 of loan per year using the annual donations exemption, or to distribute trust assets and unwind the loan.

OFFSHORE TRUSTS: subject to the section 7 and section 25B attribution rules (income attributed back to a resident donor), the section 7(8) and paragraph 72 rules for foreign trusts, and section 25BC. They are heavily policed and rarely achieve income tax deferral for a South African resident, though they remain useful for succession and for assets already offshore.

UNITED STATES: INCOME TAX TREATY in force (signed 1997, effective 1998 — 5%/15% dividends, 0% interest, with a limitation-on-benefits article).

US-SOUTH AFRICA ESTATE TAX TREATY IN FORCE (1947) — South Africa is one of only about fifteen countries with a US estate tax treaty, and this is easily missed. It provides situs rules and credit relief, so a South African resident holding US-situs assets is NOT limited to the US$60,000 non-resident exemption in the way a Spanish, Portuguese or Cypriot resident would be. VERIFY THE TREATY'S OPERATION FOR A SPECIFIC ESTATE, as the 1947 treaty is drafted very differently from the modern situs-and-credit model.

SWITZERLAND: INCOME TAX TREATY in force (signed 2007, effective 2009 — 5%/15% dividends, 0%/5% interest). No estate tax treaty with Switzerland.

UNITED KINGDOM: South Africa also has an ESTATE DUTY treaty with the UK (1979) — relevant for the very large SA-UK expatriate population.

South Africa has around 80 income tax treaties and participates fully in CRS.

RETIREMENT FUNDS — THE MOST POWERFUL VEHICLE IN THE SOUTH AFRICAN SYSTEM, AND MORE GENEROUS THAN MOST OF ITS INTERNATIONAL PEERS:

• CONTRIBUTIONS: deductible up to 27.5% OF THE GREATER OF REMUNERATION OR TAXABLE INCOME, CAPPED AT R350,000 PER YEAR. Excess contributions carry forward indefinitely and reduce the tax on the eventual lump sum or annuity.
• INSIDE THE FUND: NO TAX AT ALL. No income tax on interest, no dividends tax on dividends (retirement funds are exempt), no tax on REIT distributions, and NO CAPITAL GAINS TAX. This is a COMPLETE exemption, not a reduced rate — better than the Danish PAL at 15.3%, the Australian 15%, or the UK's gross roll-up (which still suffers irrecoverable foreign withholding).
• AT RETIREMENT: up to one third may be taken as a lump sum, of which the first R550,000 is TAX-FREE (cumulative over a lifetime), then 18%/27%/36%. The balance must purchase an annuity, taxed as income at marginal rates.
• RETIREMENT FUND ASSETS FALL OUTSIDE THE DUTIABLE ESTATE — no estate duty at 20%-25%.
• REGULATION 28 constrains asset allocation: a maximum of 45% offshore (raised from 30% in 2022), 75% equities, 25% property.
• TWO-POT SYSTEM from 1 September 2024: contributions split one third to a "savings component" (accessible once per tax year, taxed at marginal rates) and two thirds to a "retirement component" (preserved until retirement).

TAX-FREE SAVINGS ACCOUNT (TFSA): R36,000 per year and R500,000 lifetime. NO tax on interest, dividends or capital gains, and no tax on withdrawal. Withdrawals do NOT restore contribution room — so the TFSA should be funded early and never drawn. Penalty of 40% on excess contributions. Over a lifetime this is a large shelter: R500,000 contributed and compounding for 40 years at 10% reaches roughly R6,000,000, entirely tax-free.

ENDOWMENT POLICIES (SINKING FUNDS): a life insurer taxes the policyholder's fund on the "four funds" basis at a FLAT 30% ON INTEREST AND RENTAL INCOME and an effective 12% ON CAPITAL GAINS (a 40% inclusion at 30%), with dividends untaxed.

FOR A TAXPAYER ON THE 45% MARGINAL RATE THIS IS A 15-POINT SAVING ON INTEREST AND A 6-POINT SAVING ON CAPITAL GAINS, with no annual tax return disclosure. The policy has a five-year restriction period (one loan and one surrender permitted), and beneficiaries can be nominated — so the proceeds bypass the executor (saving executor's fees of up to 3.5% plus VAT) though they remain in the dutiable estate. An OFFSHORE endowment additionally provides hard-currency exposure and situs planning.

The endowment is the standard South African answer for a high-rate taxpayer's interest-bearing and actively-traded assets.

SECTION 12J VENTURE CAPITAL COMPANIES: THE SUNSET CLAUSE TOOK EFFECT ON 30 JUNE 2021 AND NO NEW SECTION 12J INVESTMENTS QUALIFY. Existing investments remain subject to the five-year holding requirement and a full CGT recoupment on exit. DO NOT RECOMMEND IT; it is still frequently and wrongly cited.