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It's not just the question of capital gains. Dividends mandate a taxable event. Buybacks give you the option to continue holding and not pay taxes. That option
by formercoder 7y ago
It's not just the question of capital gains. Dividends mandate a taxable event. Buybacks give you the option to continue holding and not pay taxes. That option has value.
- scarface74 7y agoYes but if you do sell you still pay a lower capital gains rate in the US.
- markvdb 7y agoStock buybacks versus capital gains makes all the difference for Belgian residents. No capital gains here. Foreign dividends get taxed at >= 40.5%, local dividends at 30%. Which is why accumulating funds are getting rather popular in Belgium...
- bduerst 7y agoBecause it creates a tax loophole? Im not sure if that's something to brag about.
- markvdb 7y agoI just highlighted one aspect of the Belgian tax system relevant to the discussion. Observing a tax avoidance loophole does not in any way correlate to bragging about it. Just to make things absolutely clear, I'll even happily make it explicit: I oppose it.