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How is forex trading taxed in your country?

  • #61
  • Jun 11, 2008 1:14pm Jun 11, 2008 1:14pm
Quoting mihali
Yes, tax on forex is much lower in Hungary than in Slovenia. It is only 36%.
Damn, they are really trying to kill us, don't they? Commisions (if you use an ENC broker), volatile markets and 40% taxations... Sounds like a dangerous game to me.
  • #62
  • Jun 11, 2008 1:19pm Jun 11, 2008 1:19pm
Quoting ycomp
Romania (16% but lots of gypsies)
not anymore, they all left for western europe since the borders were opened. If you declare you have investments made for over a year, the tax comes 1%.

Plus, you said you are Hungarian. there are some places were this is the "national" language, and near the western border (with hungary) 50% of persons known hungarian
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
  • #63
  • Jun 11, 2008 1:21pm Jun 11, 2008 1:21pm
TraderKGB and Rabbid, thank you for the clarification! However, it's not as fair as it looks.

If you don't have capital gains and don't play with any deductions you fill out form 1040-EZ and use $8'750 standard deduction (single) or $17'500 (married).
Once you report any capital gains losses (even if the net results is negative or zero!) you must use the regular form 1040 with the deduction of $5350 (single) or $10'700 (married).
That's $3'400 extra taxable income compared to a person who did nothing but earned salary...
"Luxury is one of the basic needs", (c), Don Corleone
  • #64
  • Jun 11, 2008 1:40pm Jun 11, 2008 1:40pm
Quoting semar
not anymore, they all left for western europe since the borders were opened. If you declare you have investments made for over a year, the tax comes 1%.

Plus, you said you are Hungarian. there are some places were this is the "national" language, and near the western border (with hungary) 50% of persons known hungarian
nope, not me... never said I was hungarian.

Not sure if I'm understanding you correctly but "investments made for over a year" doesn't sound like forex trading to me... more like long term investing.
  • #65
  • Jun 11, 2008 2:28pm Jun 11, 2008 2:28pm
Quoting ycomp
Not sure if I'm understanding you correctly but "investments made for over a year" doesn't sound like forex trading to me... more like long term investing.
Not sure about Hungary, but in Russia you invest money in your broker account, and you profit is a net result at the end of the year - i.e. net total increase in your balance. If the brokerage is in a foreign country the profit becomes profit as soon as you transfer money from your broker, not before that. This is what I call fair taxation
"Luxury is one of the basic needs", (c), Don Corleone
  • #66
  • Edited Jun 12, 2008 10:52am Jun 11, 2008 2:32pm | Edited Jun 12, 2008 10:52am
Quoting Firstboss
Not sure about Hungary, but in Russia you invest money in your broker account, and you profit is a net result at the end of the year - i.e. net total increase in your balance. If the brokerage is in a foreign country the profit becomes profit as soon as you transfer money from your broker, not before that. This is what I call fair taxation
man, that's unreal... so a Russian could pay no taxes for 5 years if he didn't remit any back... and then pay only 13%? wow, hey I'm moving to Russia...
  • #67
  • Jun 11, 2008 2:37pm Jun 11, 2008 2:37pm
by the way, it is still 0 tax in slovenia,..it is only a law suggestion, to be pased trou legislation,..so till that happens, and untill its officially declered in some URLS, it is tax free,...so make as much as possible till that happens, then we will figure something out,..like usual,..nothing can stop us, not even 40%,...
its just money
  • #68
  • Jun 11, 2008 2:40pm Jun 11, 2008 2:40pm
Quoting de123
by the way, it is still 0 tax in slovenia,..it is only a law suggestion, to be pased trou legislation,..so till that happens, and untill its officially declered in some URLS, it is tax free,...so make as much as possible till that happens, then we will figure something out,..like usual,..nothing can stop us, not even 40%,...
For such a small country sure seems like there are a lot of Forex Traders there.
  • #69
  • Jun 11, 2008 2:43pm Jun 11, 2008 2:43pm
Quoting Firstboss
Not sure about Hungary, but in Russia you invest money in your broker account, and you profit is a net result at the end of the year - i.e. net total increase in your balance. If the brokerage is in a foreign country the profit becomes profit as soon as you transfer money from your broker, not before that. This is what I call fair taxation
come to think of it... I heard South Africa was like that too. Wonder what other countries allow this?
  • #70
  • Jun 11, 2008 3:56pm Jun 11, 2008 3:56pm
Quoting ycomp
come to think of it... I heard South Africa was like that too. Wonder what other countries allow this?
Cost of Living in Singapore

I could handle that! And I would LOVE to live there. But damn, what a country this is... They will FORCE me to move. Damn again.
  • #71
  • Jun 11, 2008 4:02pm Jun 11, 2008 4:02pm
Quoting hendrix
Cost of Living in Singapore

I could handle that! And I would LOVE to live there. But damn, what a country this is... They will FORCE me to move. Damn again.
Singapore sounds interesting... lots of good food probably but I'd have a problem trading at night (which I would be doing if I'm in Asian time zones)... but who knows, I heard Nick Leeson did well for himself there
  • #72
  • Jun 11, 2008 4:05pm Jun 11, 2008 4:05pm
Quoting hendrix
Cost of Living in Singapore

I could handle that! And I would LOVE to live there. But damn, what a country this is... They will FORCE me to move. Damn again.
Btw, I still haven't finished studying, but I hope I would be able to find work over there. I'd still like to have a fixed income job, if something goes wrong. Hm, I better google it up. But yeah, this is a very likely scenario after a couple of years.
  • #73
  • Jun 11, 2008 4:07pm Jun 11, 2008 4:07pm
no taxes here in belgium!
  • #74
  • Jun 11, 2008 4:14pm Jun 11, 2008 4:14pm
Quoting ycomp
Singapore sounds interesting... lots of good food probably but I'd have a problem trading at night (which I would be doing if I'm in Asian time zones)... but who knows, I heard Nick Leeson did well for himself there
You would get used to it, or you could trade on a bit longer time frames (e.g. having your buy orders predetermined). Either way, 0 taxes and a very nice city to live in would probably be good enough reason to try it.

Well... Why not. I will play with this idea a little longer. It's definitely a good motivation to finish school ASAP and to hone my trading skills in the meantime. Yeah, I like the idea.
  • #75
  • Jun 11, 2008 5:19pm Jun 11, 2008 5:19pm
ok, this is going to make you sick, but...

If you use spreadbetting to trade the forex in the UK, there is zero tax to pay.
If it's too good to be true, it probably is.
  • #76
  • Jun 11, 2008 6:14pm Jun 11, 2008 6:14pm
Quoting Firstboss
TraderKGB and Rabbid, thank you for the clarification! However, it's not as fair as it looks.

If you don't have capital gains and don't play with any deductions you fill out form 1040-EZ and use $8'750 standard deduction (single) or $17'500 (married).
Once you report any capital gains losses (even if the net results is negative or zero!) you must use the regular form 1040 with the deduction of $5350 (single) or $10'700 (married).
That's $3'400 extra taxable income compared to a person who did nothing but earned salary...
You really need to hire an accountant..

The $8750 on the EZ lumps together the two deductions on the 1040 and 1040A - the $5350 standard deduction and the $3400 personal exemption. There's no deduction difference, or benefit, of filing the EZ vs the 1040s separately.
  • #77
  • Jun 11, 2008 6:19pm Jun 11, 2008 6:19pm
No TAX in Malaysia....
There is no bad decisions, its only didn't work out.
  • #78
  • Jun 11, 2008 6:53pm Jun 11, 2008 6:53pm
Quote
Once you report any capital gains losses (even if the net results is negative or zero!) you must use the regular form 1040 with the deduction of $5350 (single) or $10'700 (married). That's $3'400 extra taxable income compared to a person who did nothing but earned salary...

No. The $8750 is not just a deduction, it's also 1 standard exemption for people with under 117k income (those that don't qualify for the AMT). In the 1040A it's handled differently, but the deduction is still there. You get 1 standard deduction and then X exemptions, 1 being yourself, and then each additional dependant. Check line 42 on the 1040A.

You may also qualify for EIC or other credits as well to supplement this.

Quote
If you use spreadbetting to trade the forex in the UK, there is zero tax to pay.

I don't really know anything about spread betting. Is this merely a technical declaration or does it effect your trading habits? Are spread betting firms subject to any kind of oversight? Are you trading broker quality for taxes? Is this a substantive difference or merely a loophole, like can get UK broker get declared as a spread betting firm?
  • #79
  • Jun 12, 2008 12:13am Jun 12, 2008 12:13am
Quoting Rabid
I don't really know anything about spread betting. Is this merely a technical declaration or does it effect your trading habits? Are spread betting firms subject to any kind of oversight? Are you trading broker quality for taxes? Is this a substantive difference or merely a loophole, like can get UK broker get declared as a spread betting firm?

Still, you have to live in UK, I suppose. I LOVE my broker, they are super nice and everything, but I will have to pay taxes here in Slovenia - until I move.
  • #80
  • Jun 12, 2008 2:59am Jun 12, 2008 2:59am
Quoting Rabid
I don't really know anything about spread betting. Is this merely a technical declaration or does it effect your trading habits? Are spread betting firms subject to any kind of oversight? Are you trading broker quality for taxes? Is this a substantive difference or merely a loophole, like can get UK broker get declared as a spread betting firm?
A spreadbetting firm allows you to take an FX position without actually buying/selling the underlying currency. The platform is exactly the same as any broker, but you dont own any currency when you enter into a trade, so you wont pay/receive interest either.

The UK government puts spreadbetting in the same category as gambling, so there is no tax to pay. If we had to pay tax on gambling, the government would be out of pocket as we would be able to claim back our losses too
If it's too good to be true, it probably is.
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