Capital Gains Taxes for Traders

Discussion in 'Taxes and Accounting' started by euCartier, Dec 30, 2010.

  1. euCartier


    I have spent a fair amount of time searching the internet and ET website, but haven't been able to find much information on how trading gains are taxed outside of the United States for non-U.S. citizens (because if you are a U.S. citizen, you're taxed no matter where you live). There are a lot of locations that have a different rate for capital gains (sometimes 0 and sometimes distinguishing between short-term and long-term), but does that apply to what many of us do here (in and out of positions several times during the trading day)?

    For example, Singapore has 0% capital gains taxes, but they appear to treat gains from "trading" the Singapore markets as ordinary income.

    On their government website it says "When is it taxable:
    To determine whether an individual is trading, factors such as the frequency and volume of transactions, the interval between the purchase and sale, and the manner of financing the purchase of shares, will be taken into consideration.
    The three circumstances factors above alone do not determine whether the gains are taxable."

    That doesn't inspire a lot of confidence as a trader.

    I'd be interested in hearing from traders with experience or insight on how we traders get taxed in different countries? Again, I'm curious from the standpoint of a non-U.S. citizen. I'd be interested in hearing about all options (that are legal) like foreign corporations too.

    Thanks and Happy New Year
  2. heech


    What are the specifics of your question? The laws are different in just about every country/jurisdiction, depending on your citizenship, residency, legal structure.
  3. euCartier


    I left it ambiguous precisely because "The laws are different in just about every country/jurisdiction, depending on your citizenship, residency, legal structure." Like I said, finding information on tax rates, residency requirements, etc. is easy. What isn't easy to find is how traders are taxed in different countries.

    For example, I am a citizen of France, but a resident of Switzerland. Switzerland has 0% capital gains tax, but as a trader (making a living on short-term trades, often bought and sold on the same day) the gains would be taxed as ordinary income. So I have a foreign corporation in Panama where the gains are untaxed.