Taxation of equity savings accounts
In Finland private investors have received an access to equity savings account at the beginning of 2020. Equity savings account (in Finnish, osakesäästötili) is a type of investment account with the postponed tax liability, which allows to accumulate assets more effectively as a result of compound interest effect. Within an equity savings account it is possible to trade stocks of both Finnish and foreign companies listed on a stock exchange without needing to pay tax between separate trades.
In addition, the dividends and interest income are not taxed when they arrive at the equity savings account and, as a result, account holder could reinvest received profits to buy more shares. The profit is only taxed at the time of withdrawing funds from the equity savings account.
- It is possible to invest up to EUR 50 000 to the equity savings account.
- Shares that you already own cannot be transferred to this account.
- There can be both money and shares on this account at the same time, but it has separate accounts for the money and the shares.
- You can withdraw funds at any time from the account.
- You can claim the loss deductions from your capital income only in the year when you close the account.
- In case of funds withdrawn, they are divided into profit (taxable income) and capital (tax-exempt). Tax is 30% of the profit.
- You may have only one equity savings account.
- Partial tax-exemption of dividends and taxation according to the deemed acquisition cost cannot be used at this account. All profit is taxable. The tax rate on capital income is 30% up to EUR 30,000 and 34% for the part over that amount.
More information on taxation of equity savings accounts can be found at Finnish Tax Administration website.