Generally in most countries, any profit investor make on the sale of a stock is taxable at the rate between 15 percent to 20 percent, if you held the shares for a year or less. Also, dividends you receive from a stock are usually taxable
At the end of each year, investors receive an account statement of your shareholdings and the paid dividends for taxation purposes. Capital gains on the sale of shares are taxed as capital income. In Finland for instance, the tax rate on capital gains is 30 percent for capital income of up to 30,000 EURO per year. For the part exceeding 30,000 euros, the tax rate is 34 percent.
Investors can deduct acquisition expenses, such as brokerage and service fees, from the selling price of the shares.
A private person’s dividend income is capital income that is partly subject to tax and partly tax-exempt. From dividends paid to a private person, 85 percent is taxed as capital income and 15 percent is exempt from tax.
Do You Pay Tax If You lose Money?
If your net losses in your taxable investment accounts exceed your net gains for the year, you will have no reportable income from your security sales. You may then write off up to 3,000 EURO worth of net losses against other forms of income such as wages or taxable dividends and interest for the year.
Ways to Avoid Capital Gains Taxes on Stocks
- Invest for the Long Term
- Contribute to Your Retirement Accounts
- Pick Your Cost Basis
- Lower Your Tax Bracket
- Harvest Losses to Offset Gains
- Move to a Tax-Friendly State or Country