Box 3, haha, you are dutch You are right on with the primary or sole income source.. Everything can change now though with the new 'Kabinet', though I bespoke with my accountant who lol about the fact BD could facilitate that change in tax within 2y. But who knows?
Cyprus may define trading income as personal income and pay personal income tax... up to 35%,NL seems good
I did some research through the internet and some countries will charge income tax since the speculative profits are my only income, and the tax rates seem to be much lower in BG and HU since they have a very low income tax cap.
Capital gains – Capital Gains from disposals of shares, bonds, debentures and other corporate titles or other legal persons incorporated in Cyprus or abroad and options thereon are exempt. There is a capital gains tax of 20% levied on gains arising from the disposal of immovable property situated in Cyprus or the disposal of shares in companies that own Cyprus-situated immovable property. Shares listed on any recognized stock exchange are excluded from capital gains tax.
So the tax is applied just to real estate, may the property be held privately or within a corporate shell.
I'm reviving an old thread, but I've been comparing different options lately. For some reason, Germany is never mentioned, but if online sources are correct, active trading in Germany is taxed at the capital gains rate, which is around 26% (someone from Germany can confirm this?). No wealth tax, and cost of living among the lowest in high-standard countries. Now I'm wondering why Germany isn't mentioned as a trader's heaven?
Is active trading in Germany, when exceeding certain thresholds—such as trade frequency, volume, professional expertise, or the use of hedging strategies—subject to taxation as business income, as is commonly practiced in many other countries? ChatGBT: In Germany, the classification of trading income depends on whether the activity is considered private investment or a commercial business. Generally, income from private investment, including capital gains from securities trading, is subject to a flat capital gains tax (Abgeltungsteuer) of 25%, plus a 5.5% solidarity surcharge, resulting in an effective tax rate of approximately 26.375%. However, if trading activities exhibit characteristics typical of a commercial enterprise—such as high frequency of trades, significant volume, professional expertise, systematic approach, and the use of hedging strategies—the tax authorities may reclassify the activity as a business. In such cases, trading income would no longer be subject to the flat capital gains tax but would instead be taxed as business income, which entails: Corporate income tax of 15%, plus a 5.5% solidarity surcharge (totaling 15.825%). Trade tax (Gewerbesteuer), which varies by municipality but typically ranges between 7% and 21%, averaging around 14%. There is no specific statutory threshold in terms of the number of trades, volume, or other criteria that automatically triggers the reclassification of trading activities from private to business. Instead, the determination is made based on an overall assessment of individual circumstances by the tax authorities. If a trader's activities are found to resemble those of a professional or institutional investor rather than a private individual, they may be required to register as a business and comply with the relevant tax obligations. Therefore, traders with substantial activity should consult a tax advisor to ensure compliance with German tax regulations.
Well, I was browsing German trading forums and it seems to me that everybody who actively trades is paying the capital gains rate, although I'm not sure if they are doing it professionally as their only source of income. I don't really understand why Chatgpt would be a reliable source in this matter - can it even access information in a foreign language? Edit: I browsed some more and indeed it is mentioned at least in one place that if you're making a living from day trading, then other taxes may be applied. So I guess Germany is just another example of treating trading profits as income, which is taxed at a high rate.
Sweden is one of the few countries where the capital gains tax applies irrespective of volume, frequency, education, professional experience etc. (Then of course there are the zero tax havens.)