When you turn on Interest or Stocks, you’re investing in units in a fund. If you’re a Luxembourg tax resident, this means you may need to pay income tax and capital gains tax.
Capital gains tax can become due when you dispose of units in the fund and you realise a gain. In other words, when you spend, send, convert or move money to another account. When you do this, you’ll either generate a ‘short-term gain’ if you held the money for no more than 6 months or a ‘long-term gain’ if you held it for more than this. Both types of gains are considered miscellaneous income from a Luxembourg tax perspective, but the distinction between short-term and long-term gains will determine the rate at which you may pay tax.
Given the complexity, and in particular if you were to top up your account multiple times while spending, we would suggest seeking support from a tax advisor when completing your tax return.
Filing a tax return
Luxembourg tax residents are required to report short-term gains and losses on their tax return.
You can read more about how to submit your tax return to the Luxembourg tax authorities.
If you're a sole trader using Interest or Stocks passively, the guidance above also applies to you. In other cases, we’d advise speaking to your own tax advisers.