This guide is for informational purposes only. Reach out to your tax advisor for any consulting or advice.
What taxes do I need to pay?
What you’ll need to pay mainly depends on:
tax laws of the countries you’re a tax resident in
how much money you’ve made or lost across all of your investments
Many countries require you to pay a kind of tax called capital gains tax. This is tax on investment gains you make each year.
The rules are different depending on where you live, so check your local tax authority website to understand what you need to do.
To report your tax in Estonia, you’ll need to submit a personal income tax return (Form A) to Estonian Tax and Customs Board every year.
If you’re still not sure, speak to a tax advisor. Wise can’t give you advice on your personal tax situation.
The following items are important to consider
As an Estonian tax resident, you only have to report the amount of realised gains, i.e. gains derived upon actually selling the shares of the fund you have chosen. You should also report your losses as those will reduce the total amount of annual gains that are going to be taxed. If your losses exceed gains, you can carry forward the excessive losses to next years and offset against future gains. Unrealised gains which reflect the change of the market value of the shares you own but haven’t sold, are not taxable.
If you receive dividends, you should pay attention on whether any income tax has already been withheld on those or not. If no income tax has been withheld, you should report them on your annual income tax return and pay 20% income tax. If income tax has been withheld at source, you still have to report your income but you do not have to pay any tax in Estonia.
If you receive interest, you should also pay attention on withholding tax. If no tax has been withheld at source, you should pay 20% income tax in Estonia. If there is a withholding tax (usually 10-15%), you can credit this against your Estonian tax.