Hi all, long time futures trader here, but getting tired of paying about 50% tax on my profits every year (I am located in Europe). In my country it is quite the opposite of the USA, here you pay lower tax on profits from stocks than on profits from futures trading (stocks, ETFs 27.5 % fix, but on profits from futures trading you pay your personal income tax rate which can be as high as 55%). Because of this, I would like to switch some of my futures trading (NQ, ES) to ETFs (QQQ, SPY). I have been thinking for a long time about this, but a problem were always the higher commissions I would have to pay in the ETFs compared to the futures. Now that many brokers start to offer commission free trading in stocks and ETFs, I want to have a closer look at this again. I think the brokers that offer commission free trades now are Interactive Brokers Lite, Robinhood, Charles Schwab, Tradestation and Etrade, are there any others ? Which of these brokers would be the best to use for very shortterm scalping ? Do they offer the necessary execution (speed), platform ... ? Thanks and greetings, CALLumbus
Think the issue is going to be opening an account. Believe their all for U.S residents if their commission free.
In your country, is stock trading above a certain threshold (volume, frequency) considered a business and thus taxed at normal (higher) income tax rates? Besides zero tax jurisdictions, I have so far only found one country where that is not the case.
No, I dont think so, as long as you only manage your personal wealth it does not seem to be a problem. Even if it would be considered as a business it would not be a problem, as the applicable corporate tax rate is 25%. Some people I know prefer to pack their private wealth and investments (but in their case mostly real estate) into a corporation, but I prefer to keep all my trading in personal, individual accounts, for several reasons.
Can't you go Spot account, ie Forex then it's classed as gambling and therefore in the UK Tax free, which is a real real bonus!!
Forex is also taxed with the personal income tax rate, otherwise I would do much more in Forex in CFDs.
But on top of the corporate tax rate of 25% would be either dividend tax or capital gains tax, right?
Exactly, when you take a profit out of the company, then it is taxed with a capital gains tax of 27.5 %.