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Which jurisdictions tax unrealized capital gains? Asking for a friend so I can avoid passing through.
by takinola 9mo ago
Which jurisdictions tax unrealized capital gains? Asking for a friend so I can avoid passing through.
- rtsang1 9mo agoI don't know if this counts, but I believe Norway taxes unrealized gains (indirectly) via wealth tax. All stock value is on the chopping block come tax time. I doubt this is a common thing. Whereas the other case (dividends tax credit) is far more common. It impacts those of us in Canada. Our government disincentivizes buybacks and encourages dividends instead. Typically, if you're in a low income bracket, and have investments brewing for decades (with high amounts of unrealized gain) in an unregistered account, it is preferable to get dividends over buybacks.
- eru 9mo agoDenmark is one of them. Germany has something similar. But you can ask your friendly neighbourhood LLM for details on the world's jurisdictions to get a complete list.
- lxgr 9mo agoGermany doesn't tax actual unrealized gains. They do tax foreign accumulating ETFs, but those really just dress up dividends to look a bit like unrealized capital gains to brokerages and, in the past, tax authorities.
- eru 9mo agoBtw, I wonder why companies bother with dividends at all, when for most of their shareholders buybacks have tax advantages. (Economically, the two are the same.)
- throw-qqqqq 9mo agoDenmark taxes unrealized gains in accumulating funds, unless they are on the “exception-list” (SKATs positivliste) or you use the tax advantaged “aktiesparekonto”. If you buy regular stocks in a regular brokerage account, you do not incur taxes before selling (with profit). Same for dividend-distributing ETFs.