In a report published on Tuesday 12 March, the Tax Foundation think-tank has highlighted the major differences in capital gains tax rates across Europe.
On average, EU Member States tax capital gains on the sale of listed shares at 18.6%. Denmark tops the list, with a tax rate of 42%. It is followed by Finland and France, with 34% each. At the other end of the scale are Bulgaria and Romania, with rates of 6% and 10% respectively.
However, a number of European countries do not levy capital gains tax at all on the sale of long-held shares: Belgium, the Czech Republic, Luxembourg, Malta, Slovakia and Slovenia.
In many countries, investment income, such as dividends and capital gains, is taxed at a different rate to earned income (see EUROPE 13237/11). Tax Foundation believes that these capital gains taxes create a bias against saving, which leads to a fall in national income by encouraging current consumption at the expense of investment. Higher taxes also encourage investors to sell their assets less often, which reduces the amount of tax they have to pay. This is known as the realisation or lock-in effect.
Read the report: https://aeur.eu/f/bal (Original version in French by Anne Damiani)