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01 May 2010

Capital Gains Tax Rates Around The World

CG:  Capital Gains
CGT:  Capital Gains Tax(es)
CGR:  Capital Gains Rate

1.  Argentina:  No specific CGT.

2.  Australia:  See CGT laws and 52 events that are exempt.

3. Barbados:  No CGT.

4. Belgium:  CGs realised by a Belgian resident company on shares in a Belgian or foreign company are fully-exempt from corporate income tax; provided, that the dividends on the shares qualify for the participation exemption.  Other CGs are taxed at the ordinary rate.

5.  Belize:   No CGT.

6. Brasil: CGR is 15% and only paid on realised gains.

7.  Bulgaria:  The corporate tax rate is 10% and the personal tax rate is flat at 10%.  There is no CGT on equity instruments traded on regulated markets within the European Union.

8.  Canada:  CGR is 10%.

9. Cayman Islands:   No CGT.

10. China:  Tax-resident enterprises will be taxed at 20% in accordance with the Enterprise Income Tax Law. Non-resident enterprises will be taxed at 10% on CGs, in accordance with the Implementing Regulations to the Enterprise Income Tax Law.

11.  Czech Republic:   CGs are taxed as incomes for companies and individuals and subject to the flat 15% individual income tax or the 19% corporate tax.  CGs from the sale of shares by a company owning 10% or more is entitled to participation exemption under certain terms. For an individual, gain from sale of a main private dwelling, held for at least 2 years, is tax exempt. Or, when not used as a main residence, if held for more than 5 years.

12.  Denmark:  Dividends and realised CGs are charged at 28% to individuals of gains up to DKK 48,300 and at 42% of gains above that.  Individuals' interest income from bank deposits and bonds, realised gains on property and other CGs are taxed up to 59%; however, several exemptions occur, such as on selling one's principal private residence or on gains on selling bonds.  Companies are taxed at 25%. Share dividends are taxed at 28%.

13.  Ecuador:   No CGT.

14.  Egypt:   No CGT.

15.  Estonia:  There is no separate CGT.  All earned income from CGs is taxed the same as regular income, the rate of which currently stands at 21%.

16.  Finland:  The CGR is 30% on realised capital income and 32%, if the realised capital income is over 50,000 euros; however, CGs from the sale of residential homes is tax-free after two years of residence, with certain limitations.

17.  France:  The CGR on the sale of financial instruments is a flat 32.3%, which includes 12.3% for social security taxes. If shares are held in a special account (called a PEA), the gain is subject only to social security taxes; provided, that the PEA is held for at least five years. The maximum amount that can be deposited in the PEA is €132,000.  The gain realised on the sale of a principal residence is not taxable.

18.  Germany:   The German CGR is 25% for individuals.  CGT only applies to financial instruments that have been bought after 31 December 2008.  Real estate continues to be exempt from CGT, if it has been held for more than ten years.   For corporations, the CGR is 15%, but 95% of the CG from the sale of shares in a foreign subsidiary or German company is exempt when received by a company taxable in Germany.  The corporate tax rate is 15%.

19.  Hong Kong:   No CGT.

20:  Hungary:  Since 1 January 2011 there is one flat tax rate (16%) on capital income. This includes: selling stocks, bonds, mutual funds shares and also interests from bank deposits. Since January 2010, Hungarian citizens can open special "long-term" accounts. The tax rate on CGs from securities held in such an account is 10% after a 3 year holding period, and 0% after the account's maximum 5 years period is expired.

21.  Iceland:  Capital gains rate is 20%.

22.  India:  The tax rate on short-term CG from equities (held for less than one year) is 15%.  Equities held for more than one year are considered long-term and are not taxed when sold if sold through a recognised stock exchange and a Securities Transaction Tax is paid.  Currently in India, the STT is between 0.017% and 0.125% of the total amount received on the sale of securities.

23.  Iran:   No CGT.

24.   Ireland:  There is a 25% tax on CGs, with several exclusions and deductions (e.g. agricultural land, primary residence, transfers between spouses).  The tax rate is 23% on certain investment policies.  Gains made where the asset was originally purchased before 2003 attract indexation relief.

25.  Isle of Man:   No CGT.

26.  Israel:   CGT is a flat rate of 25%. The taxed gains are inflation adjusted.

27.  Italy:  Corporate CGR is 27.5%.  Individual CGR is 20%.

28.  Jamaica:   No CGT.

29.  Japan: 10% flat tax on CGs.

30.  Kenya:   No CGT.

31.  Latvia:   CGs are taxed at a 15%. Dividends are taxed at a 10% rate.

32. Lithuania:  CGT from the disposal of securities and from sale of real estate is 15%.  Gains from sale of real estate are exempt if the property is owned for more than 3 years before sale.

33.   Malaysia:   No CGT.

34.  Mexico:   No CGT.

35.  Moldova:   The CGR is 50% of the income tax rate.  For individuals, the income tax rate is 18%; thus, individuals pay 9% on CGs.  Currently, the CGR is 0% -- it was cut in 2008 to attract foreign investment -- thus, corporations pay NO CGTs.  It is expected that corporations will pay a flat 10% on income and CGs beginning in 2013.

36.  Netherlands:   No CGT.

37.  New Zealand:  No CGT.

38.  Norway:  The individual CGR is 28%. In most cases, there is no CGT on profits from sale of your principal home. 

39.   The Philippines:   There is a 6% CGR and a 1.5% Documentary Stamps on the disposal of real estate. 

40.  Poland:   CGR is a flat 19%.

41.  Portugal:  All CGs on stock above €500 are taxed at 20%.  Investment funds, banks and corporations are exempted from paying CGTs. There is a CGT on sale of home and property.  Any CG arising is taxable as income. For residents, this is on a sliding scale from 12-40%; however, the taxable gain is reduced by 50%.

42.  Russia:   There is no separate tax on CGs; rather, gains or gross receipt from sale of assets are absorbed into income tax base.  If owned for more than 3 years, individuals pay no CGs.  If owned for less than 3 years, residents pay 13% on CGs and non-residents pay 30%.  Resident corporations do not pay CGTs.  Such income is taxed as ordinary business profits at the common rate of 20% with deductions.  Small businesses pay taxes on gross receipts at 6% or 15%.  Dividends are taxed at 9% for residents and 15% for non-residents.

43:  Singapore:  No CGT.

44.  South Africa:  For legal persons, 50% of their net profit will attract CGT and 25% for natural persons. This portion of the net gain will be taxed at their marginal tax rate. As an effective tax rate this means a maximum effective rate of 10% is payable and for corporate taxpayers a maximum of 15%. For example, for natural persons the maximum marginal tax rate is 40%. Assuming the aggregate CG for the year of assessment is R50 000, 25% of R50 000 is R12 500, which is taxed at 40%, therefore R5 000 is payable. The R5 000 as a percentage of the original profit made is 10%.

45.  South Korea:   Individuals holding less than 3% of a listed company pay a 0.3% trade tax on sales of shares.  Exchange-traded funds are exempt from trade taxes.  For shareholders owning more than 3% of listed companies and for sales of shares of unlisted companies, the CGR is 11% for tax residents when the shares involved have to do with small- and medium-sized companies.  Rates of 22% and 33% apply in certain other situations.  If you have been a resident for less than 5 years, you are exempt from CGTs on foreign assets.

46.  Spain:  The CGRs are staggered.  The first €6,000 is taxed at 21%.  From €6,001 to €24,000, the tax is 25%.  Gains above €24,000 are taxed at 27%.  Companies do not pay CGT.  CGs are taxed as regular income, which means it is taxed between 25% and 30% depending upon the size of the company.

47.  Sri Lanka:  No CGT. 

48.  Sweden:  30% on realised capital income. 

49.  Switzerland:  No CGT.  Corporate CGs are taxed as ordinary income.

50.  Thailand:  No CGT.

51.  Turkey:  No CGT.

52.  United Kingdom:  CGR is 18%.  For people paying more than the basic rate of income tax, this increases to 28%.  There are exceptions such as for principal private residences, holdings in ISAs or gilts. Certain other gains are allowed to be rolled over upon re-investment. Investments in some start-up enterprises are also exempt from CGT. Entrepreneurs' Relief allows a lower rate of CGT (10%) to be paid by people who have been involved for a year with a company and have a 5% or more shareholding.  Every individual has an annual CGs tax allowance: gains below the allowance are exempt from tax, and capital losses can be set against CGs in other holdings before taxation. All individuals are exempt from tax up to a specified amount of CGs per year. For the 2011/12 tax year this "annual exemption" is £10,600.