What are the taxes and rates of tax to which an individual is subject in respect of income and capital gains and, in relation to those taxes, when does the tax year start and end, and when must tax returns be submitted and tax paid?

Private Client (2nd edition)

Israel Small Flag Israel

With respect to ordinary income, the Israeli income tax system is progressive. For 2018, the highest income tax rate is 47% (national insurance and health tax and additional 3% surtax may also apply), passive income (such as capital gains, dividend and interest) is subject to reduced rates of 15–30%, with the possible imposition of an additional 3% surtax (with respect to income exceeds NIS 641,880 for 2018).

The tax year is the calendar year, except in special circumstances (for example, if a special assessment period was set and approved by the assessing officer). An income tax return should be submitted until April 30 of each year (with respect to the preceding year), with certain exceptions. Tax should be paid with the submission of the annual tax return. Taxpayers with an active income tax file are generally paying advance taxes throughout the year. In addition, interest and linkage differences are added to any tax liability in respect of a given year that is not paid by January 31st of the following year.

An Israeli tax resident that ceases to be a resident of Israel for tax purposes is deemed to have sold their assets on the date preceding the date of termination of their tax residency (i.e. exit tax). However, the obligation to pay tax arising from this deemed disposition event can be deferred to the actual realisation date of the asset.

Ireland Small Flag Ireland

The Irish tax year operates on a calendar year basis, from 1 January to 31 December. The specific tax filing and payment deadlines depend on the nature of the tax being paid.

The standard rate of income tax is 20%; however, for earnings of EUR 35,800 or greater, the rate imposed is 40%. The current rate of CGT is 33%.

Self-assessment applies to all self-employed persons and persons who are receiving income that is not chargeable to tax under PAYE (see Question 3).

By 31 October in any given year, a taxpayer must:

  • Pay preliminary income tax for that year;
  • Pay the balance of their income tax liability for the previous year;
  • File a tax return in respect of their income tax liability and CGT liability for the previous year. CGT liabilities can be declared in an individual’s income tax return.

CGT must be paid on or before:

  • 15 December in any given year for gains arising between 1 January and 30 November in that year.
  • 31 January in any given year for gains arising between 1 December and 31 December in the prior year.

The deadline for filing both income and CGT tax returns is usually extended by approximately two weeks where the individual files online via Revenue’s Online System (“ROS”).

Belgium Small Flag Belgium

An individual’s taxable income is determined by four income categories to each of which specific rules for the calculation of the net income apply:

  1. real estate income
  2. income from movable property (including dividends, interests and royalties)
  3. earned income (including employment income, business income and pensions)
  4. miscellaneous income, i.e. income that does not fall under category i) to iii)

In general, the net real estate income and net earned income is taxable at progressive rates from 25% up to 50% (50% for income exceeding 39.660 EUR (income year 2018). Several exemptions apply, e.g. child allowances. The tax amount is increased with communal tax (7% in average).

In principle, income from movable property is subject to withholding tax if paid in Belgium. Since 1 January 2017 a rate of 30% applies to most dividends and interests. If no withholding tax is levied, the income must be declared in the annual tax return and a tax equal to the withholding tax will be levied.

If a certain income is listed as miscellaneous income, it is taxed separately without adding it to the other income. The most important types of miscellaneous income are:

  • capital gains on the sale of shares, except if realised as part of the normal management of one’s private wealth (33% tax)
  • capital gains realised on the transfer of an important share participation in a Belgian company (more than 25%) to a non-EEA legal entity (16,5% tax)
  • capital gains on the sale of Belgian real estate (other than the family dwelling) within 8 or 5 years after acquisition (16,5% or 33% tax)
  • occasional (non-professional) profits and proceeds with speculative intent (33% tax).

The tax year is the same as the calendar year.

The annual personal income tax return can be filed on paper or electronically via www.taxonweb.be In practice, the paper version of the tax return must generally be filed by the end of June, while taxpayers that file their return electronically are generally granted a couple of weeks more. Tax advisors and accountants that file the tax returns of their clients are generally granted a couple of months more. Special terms apply in case e.g. a taxpayer emigrates during the year.

The tax must be paid within two months upon reception of the tax bill.

United States Small Flag United States

a. Individual Ordinary Income Tax Rates. There are four filing statuses and seven brackets for individual federal ordinary income tax; the brackets are indexed for inflation. The following table shows the anticipated individual income tax rates and brackets for the 2019 tax year.

Tax Rate

Single

Married filing Jointly and Surviving Spouses

Married Filing Separately

Head of Household

10%

$0—$9,700

$0—$19,400

$0—$9,700

$0—$13,850

12%

$9,701—$39,475

$19,401—$78,950

$9,701—$39,475

$13,851—$52,850

22%

$39,476—$84,200

$78,951—$168,400

$39,476—$84,200

$52,851—$84,200

24%

$84,201—$160,725

$168,401—$321,450

$84,201—$160,725

$84,201—$160,700

32%

$160,726—$204,100

$321,451—$408,200

$160,726—$200,000

$160,701—$204,100

35%

$204,201— $510,300

$408,201—$612,350

$204,100—$306,175

$204,001—$510,300

37%

$510,301 +

$612,351 +

$306,176 +

$510,301 +

b. Capital Gains Rates. For individual taxpayers (i.e., US Persons and nonresidents with US source income), the capital gains rate depends on the individual’s tax bracket, and whether the gains are classified as short-term capital gains or long-term capital gains. Short-term capital gains are gains from the sale or disposal of assets held for one year or less. Individuals pay short-term capital gains at the same rate as their ordinary income tax rate. Long-term capital gains are gains from the sale or disposal of assets held for more than 12 months and they are taxed at 0%, 15% or 20% depending on an individual’s income tax bracket. Long-term capital gains on the sale of collectibles (such as works of art or other tangible personal property) are taxed at 28%. If long-term capital gains raise an individual’s income from one bracket to another, only the portion that is in the higher bracket – not the entire gain – is taxed at the higher rate. It is possible to defer the realization of capital gains on the sale of investment real property by investors through the use of a like-kind exchange of similar investment real property. As a result of the 2017 enactment of the Tax Cuts and Jobs Act (described in the answer to question 28) and the issuance of proposed Treasury regulations, deferral of such gains on the sale of capital assets other than investment real property is unavailable, except to the extent the proceeds of sale are invested in a qualified business or property located within a special “qualified opportunity zone” (i.e., generally, a listed disadvantaged area within the US) for a fixed period of time.

c. Social Security and Medicare Taxes. US Persons who work as employees and nonresidents with US-source salaried income are obligated to pay a social security tax at a rate of 6.2% on compensation up to $132,900, and a Medicare tax at a rate of 1.45% on compensation up to certain thresholds ($125,000 for married taxpayers who file separately, $250,000 for married taxpayers who file jointly, and $200,000 for single and all other taxpayers) and 2.35% on compensation in excess of these thresholds. (These figures are adjusted annually for inflation.) Self-employed US Persons and nonresidents with US-source self-employment income must pay 12.4% of their annual self-employment earnings up to $132,900 toward social security taxes, as well as 2.9% of their self-employment earnings up to the above thresholds and 3.8% of their earnings in excess of these thresholds, toward Medicare taxes.

d. Length of Tax Year; Tax Return Submission; Payment of Tax. The tax year for individuals runs from January 1 to December 31. Individuals are required to file income tax returns reporting their income and capital gains, and pay any tax due, by April 15 of the year following the end of the taxable year to which the return relates. Individuals who cannot file by the due date for their return may request an extension of time to file. An extension of time to file is not an extension of time to pay, however, and individuals may be subject to a late payment penalty on any tax not paid by the original due date of their return.

Cyprus Small Flag Cyprus

For all taxes, the tax year is the calendar year. Spouses are taxed separately.

Income tax

Income tax is payable on taxable income for the year at the following rates:

Income band

Rate

from

to

0

€19,500

0

€19,500

€28,000

20%

€28,000

€36,300

25%

€36,300

and above

30%

Relief is given for donations to approved charities, professional and trade union subscriptions, life insurance premiums and contributions to pension, social insurance and welfare funds.

Several categories of income are exempt from income tax, including:

  • interest and dividends receivable.
  • lump sums received on retirement.
  • capital sums from approved life assurance policies and provident or pension funds.
  • income from employment services provided abroad to a non-resident employer or an overseas permanent establishment of a resident employer for a period exceeding 90 days in the tax year.
  • profit from the sale of shares.
  • certain pensions such as widow’s pension).
  • salaries of officers and crew of ships owned by a Cyprus shipping company that sail under the Cyprus flag and operate in international waters.
  • income from a qualifying scholarship, exhibition, bursary or similar educational endowment.

For income tax purposes a 20% deduction is allowed from rental income received.

The taxpayer may opt from year to year for any foreign pension either to be taxed on the standard basis or on an alternative basis in which the first €3,420 per annum is free of tax and the excess over that amount is taxed at 5%.

There is a separate system of taxation for companies or individuals engaged in operation or management of ships engaged in international trade, based on the tonnage of the vessels concerned.

There is a self-assessment system for income tax, under which taxpayers must submit an estimated tax return part-way through the tax year accompanied by payment of half the estimated liability, and the balance of the estimated liability at by the end of the tax year. The final tax return is submitted after the end of the tax year, together with payment of any final balance. The tax return must be based on audited financial statements if the taxpayer has an income of more than €70,000 from trading or professional activities. Individuals must submit a provisional estimate of profits and tax payable for the year by 31 July of the tax year, together with a remittance of half the estimated tax payable. The estimates may be revised at any time before 31 December of the tax year, and the balance of the estimated tax payable must be paid by then. A penalty may be imposed in the event of an excessive difference between the first and the final estimate.

Individuals who are exempt from the requirement to provide audited financial statements are required to submit their final tax return for the year, with a remittance for any tax payable, by 30 September following the end of the tax year. Tax returns must be submitted electronically via the official TAXISNET system.

Special contribution for defence (“SDC tax”)

Investment income (passive interest, dividends and rents) received by individuals who are both resident and domiciled in Cyprus for the tax year concerned is subject to SDC tax at 30 percent on interest, 17 percent on dividends and 2.25 percent on rents. If the individual is resident but not domiciled in Cyprus there is no liability to SCD. Given that interest and dividends are exempt from income tax, this means that interest and dividend income of resident non-domiciled individuals is exempt from all forms of Cyprus taxation, and in many cases exempt from overseas tax.

Taxpayers receiving rents, interest or dividends from which SDC tax has not been deducted must submit semi-annual returns together with payment of the amount due.

Capital gains tax

The only gains subject to capital gains tax, which is charged at 20 percent, are gains from the disposal of immovable property in Cyprus and shares in companies (but not companies listed on a recognised stock exchange) directly or indirectly owning immovable property in Cyprus, to the extent that the gain is derived from an appreciation in value of the immovable property.

Gains on disposal of any other kind of asset are entirely free of capital gains tax.

Taxpayers must report any capital gains as they arise and pay the tax. However, as capital gains tax only applies to a very limited range of assets this is not an issue that affects most taxpayers.

Austria Small Flag Austria

Austrian income tax is levied by way of a progressive income tax rate ranging from 25% to 55% (for taxable income in excess of EUR 1 Mio). With respect to specific investment income, including inter alia capital gains from investments, a special flat income tax rate of 27.5% may apply. In addition, income from the sale of real estate is subject to a flat income tax rate of 30%.

Bulgaria Small Flag Bulgaria

Generally, individuals are taxed on their income and capital gains at a flat 10 % rate regardless of income. Special rates apply to some types of income, for example:

  • interest on bank accounts – 8%;
  • dividends – 5%.

The taxable year in Bulgaria is the calendar year starting on 1 January and ending on 31 December. The annual income tax return has to be submitted by 30 April of the following year. The tax has to be paid by the same deadline.

Individuals can benefit from a 5% tax credit reducing the tax due provided that they submit their tax return online before 31 January of the following year and pay the tax due by the same deadline. The tax credit is limited to BGN 500 in total.

Where an individual’s only source of income are wages from a business operating in Bulgaria, such individual is not required to file an annual tax return since the employer is obligated to deduct and pay the income tax along with applicable social security contributions on a monthly basis.

Argentina Small Flag Argentina

At national level, individuals deemed Argentine residents for income tax purposes (as seen in Question 1 above) are subject to personal income tax (Ganancias Personas Físicas) applicable on their worldwide income. There is no capital gains tax for individuals in Argentina as such, due to the fact that it is income tax at a different rate as seen below.

ITL establishes a progressive rate which is composed of two concepts: one flat tax amount and another variable rate (ranging from 9% to 35%). However, ITL sets a differential treatment with rates of 5%, 7% or 15% in case of gains derived from the sale of bonds, shares, other securities, real property (residential property is exempt from taxation), and income derived from dividends distributed by entities.

Income tax is an annual tax and in the case of individuals the Fiscal Period begins on January 1st of each year and ends on December 31st. Argentine residents must submit their income tax return and pay the corresponding tax balance in mid-June of the year following the given Fiscal Period, except for individuals that earn only employment income from which tax is withheld by the employer (five prepayments of tax must be made at bimonthly intervals, beginning in July of the Fiscal Period).

At provincial level individual’s income is subject to Gross Revenue Tax (Impuesto a los Ingresos Brutos). It is regulated by each province and the Autonomous City of Buenos Aires, through their respective Tax Codes (Código Fiscal, hereinafter “CF”), where it is specifically defined the kind of activities to which it applies, who are deemed taxpayers and the rates which apply. The Gross Revenue Tax is a monthly tax. In general, the submission of the tax return and the payment of the respective balance must be done in the first 15 days of the following month.

In the Autonomous City of Buenos Aires, the applicable rates range from 0.48% to 15%. In the case of services, a general rate of 3% is established when the annual gross income in the previous fiscal year is equal to or less than fifty-five million ($ 55,000,000) and 5% when the annual gross income in the fiscal year previous fiscal exceeds fifty-five million ($ 55,000,000). Also, the law establishes differential rates for certain services, among the main ones are:

Services

Rates

Building Services

3%

Financial and other similar Services

5,5%

Brokerage and other similar services

7%

Real estate services performed on their own, with own or leased property

1,5%

In Buenos Aires Province, the applicable rates range from 0.1% to 15%. In the case of services the law established a general rate of 3, 50%.

As general rule, a non-resident (Beneficiario del Exterior) receiving any Argentine sourced income will be subject to a withholding tax. The tax rate will vary according to the source of the income as explained in Question 3 below.

Monaco Small Flag Monaco

None. See Question 1.

Italy Small Flag Italy

For individuals the tax year coincides with the calendar year. The total taxable income is subject to progressive tax rates up to 43% (plus local surcharges). However, income and gains from financial assets are generally subject to final withholding taxes at flat rates (see 3) and are not computed in the total taxable income. The deadline for the filing of the income tax return is usually the 30th of September of the following year. Taxes are paid through two advance payments during the year (usually in June and November) and the payment of the balance, which must be usually made in June of the following year.

Bermuda Small Flag Bermuda

The financial year runs 1 April to 31 March, but for private clients there are no relevant tax payment dates or deadlines because there is no income or profits tax, capital gains tax, capital transfer taxes, withholding tax or inheritance tax in Bermuda.

United Kingdom Small Flag United Kingdom

2.1 Subject to the territorial limits and the reliefs mentioned in §1 and subject to the availability of the remittance basis (§10), income tax is generally charged on the total income of an individual for each tax year (§2.13). In relation to rental and trading income, expenditure incurred exclusively for the purposes of the rental business or (as the case may be) trade is generally deducted in computing this total, but there is a restriction on the deductibility of interest paid by landlords of let residential property.

2.2 Of the individual's total income for the tax year (§2.13) ending 5 April 2019, income falling within his personal allowance (§2.3) suffers no income tax (§2.1), the next £34,500 suffers income tax at 20% (or 7.5% for dividends), the next £115,500 suffers income tax at 40% (or 32.5% for dividends), and the balance suffers income tax at 45% (or 38.1% for dividends). Of the individual's total income for the tax year ending 5 April 2020, income falling within his personal allowance suffers no income tax, the next £37,500 suffers income tax at 20% (or 7.5% for dividends), the next £112,500 suffers income tax at 40% (or 32.5% for dividends), and the balance suffers income tax at 45% (or 38.1% for dividends). In the application of these rates and bands to an individual's income, dividends are treated as the top slice of that income. Different rates and bands apply to Scottish taxpayers. Scottish taxpayers include those UK-resident individuals whose main or only home is in Scotland, and those UK-resident individuals who do not have their main or only home in any part of the UK but spend more midnights in Scotland than in any other part of the UK (i.e. England, Wales or Northern Ireland).

2.3 An individual's personal allowance is normally £11,850 for the tax year (§2.13) ending 5 April 2019 and £12,500 for the tax year ending 5 April 2020, but is reduced by £1 for every £2 by which his total income for that tax year exceeds £100,000. No personal allowance is available to an individual who claims the remittance basis (§10) for the relevant tax year. The personal allowance is only available to certain non UK resident individuals (e.g. residents of the Channel Islands and the Isle of Man, EEA nationals, and individuals benefiting from particular kinds of double tax treaty with the UK).

2.4 In addition, an individual may receive £2,000 of dividends in each tax year (§2.13) without any charge to income tax (§2.1), and modest annual tax-free allowances are generally available for interest of individuals whose total income for the relevant tax year does not bring them into the 45% income tax rate band.

2.5 Subject to territorial limits broadly similar to those described in §1 in relation to income tax (§2.1), individuals with income from an employment or self-employment must also pay national insurance contributions on that income. For the tax year (§2.13) ending 5 April 2019, an employee whose income exceeds £8,424 pays national insurance contributions at 12% on the excess up to £46,350, and at 2% on the excess over £46,350. For the tax year ending 5 April 2020, an employee whose income exceeds £8,632 pays national insurance contributions at 12% on the excess up to £50,000, and at 2% on the excess over £50,000. Different rates apply to the self-employed. There is a link between eventual entitlement to state pension and the number of tax years for which national insurance contributions have been paid.

2.6 Subject to the territorial limits and reliefs mentioned in §1, capital gains tax is generally charged on the total chargeable gains (§2.7) of an individual for each tax year (§2.13), after deducting allowable losses (§2.10) and the annual exempt amount (§2.10).

2.7 Broadly, chargeable gains are capital gains on the disposal (§2.8) of most kinds of assets, with exceptions including the main or only residence of an individual (subject to a number of conditions) (§8.3), cars, chattels with a predictable life of less than 50 years, and chattels for which the consideration does not exceed £6,000 (subject to special rules for collections of chattels).

2.8 The disposal of an asset includes the sale or gift of the asset, certain other occasions on which a capital sum is derived from an asset, and events deemed to involve a disposal, such as the appropriation of an asset to trading stock.

2.9 To compute the chargeable gain (§2.7) on the disposal of an asset, the individual should normally take the consideration or deemed consideration (§5.10) for the disposal of the asset and deduct expenditure incurred on the acquisition, enhancement or disposal of the asset.

2.10 The allowable losses that may be deducted are capital losses (computed in the same way as chargeable gains §2.9) realised in the relevant tax year (§2.13) and, if unused, in previous tax years. The annual exempt amount is £11,700 for the tax year ending 5 April 2019 and £12,000 for the tax year ending 5 April 2020, but is not available to an individual who claims the remittance basis (§10).

2.11 Once the total of the individual's chargeable gains has been determined for the tax year (§2.13), and the allowable losses and the annual exempt amount (§2.10) have been deducted, the resulting figure is charged to capital gains tax at the relevant rate. The top rate of capital gains tax is 20%, except for capital gains on the disposal of residential property or carried interest, where it is 28%. Generally, these rates may be reduced to 10% and 18% respectively in the case of an individual who does not pay income tax at 40% (or 32.5% for dividends), but the amount of the chargeable gains of such an individual is brought into account in determining whether the higher capital gains tax rates apply to him.

2.12 Individuals are entitled to invest up to an annual limit (£20,000 for the tax year (§2.13) ending 5 April 2019) in an individual savings account ("ISA") consisting of cash or shares, and can achieve shelter from income tax (§2.1) on the interest and dividends, and from capital gains tax (§2.6) on the capital gains, realised in that account. In addition, individuals can achieve shelter from income tax and capital gains tax by making contributions (subject to annual and lifetime limits) to a registered pension scheme, but the funds so contributed can only be used to provide retirement benefits which (apart from a 25% tax-free lump sum) will normally fall within the scope of income tax when paid. Other reliefs from income tax and capital gains tax exist to encourage business investment by individuals.

2.13 The tax year begins each 6 April and ends on the following 5 April. In some circumstances an individual may split a tax year into a period of residence and a period of non residence, with income and capital gains arising during the period of non residence not charged to UK tax. For example, a tax year may be split if an individual with no previous connections with the UK comes to live in the UK and arrives part of the way through that tax year.

2.14 Individuals who have to submit a tax return must do so, and pay any income tax or capital gains tax that is due, by 31 January following the end of the relevant tax year (§2.13). In some circumstances, six monthly advance payments of tax (known as "payments on account") must be made, and these fall due on 31 January during the relevant tax year and 31 July following the end of the relevant tax year.

Colombia Small Flag Colombia

The fiscal year in Colombia is the same as the calendar year. The Colombian fiscal year starts on January 1st and ends December 31st of each year.

  • Non-residents:

    Non-residents are subject to tax at a 35% rate on Colombian sourced income and at 10% rate on Colombian sourced capital gains if the assets have been held for 2 years or more. They are only required to report assets located in Colombia.

  • Residents:

    Individual tax rates depends on income baskets and residence status. As of January 1st, 2019, the rates for each type of income are the following:

    Labour income, Capital Income and Non-labour income

    Pensions

    Dividends

    • 0% to 39% for residents.
    • 35% for non-residents.
    • 0% to 39% for residents.
    • 35% for non- residents.
    • 0%-15% for dividends paid out of taxed profits at the corporate level (for residents).
    • 7.5% for dividends paid out of taxed profits at the corporate level (for non-residents).
    • 33% for FY 2019, 32% for FY 2020, 31% for FY 2021, 30% as of FY 2022 plus 15% (for residents) or 7.5% (for non-residents) on the distributed net dividend (net of the 33%, 32%, 31% or 30% initial tax) if not taxed at the corporate level.

    The following exemptions, reliefs or deductions are available:

     

    Revenues not considered as income

    Mandatory health and pension contributions made by employees.

    Voluntary contributions to the individual savings scheme provided that:

    • The income does not annually exceed 2500 Tax Value Units (Approximately USD 26.000); or
    • The contributions do not annually exceed 25% of the annual labour income.

     

     

    Deductions

    Payments of interests derived from loans destined to housing purchase.

    Payment of pre-paid health services and health insurance payments.

    10% of all labour payments made to individuals who are dependent from the taxpayer (i.e., children who have not reached legal age, children who have reached legal age but are being financed in a recognised educational institution and children older than 23 years old who are dependent due to physical or psychological incapability).

    Exempt income

    Voluntary contributions to pension funds and AFC accounts (savings accounts for housing purchase) provided that:

    • The Income does not annually exceed 3.800 Tax Value Units (Approximately USD 41.600); or
    • The contributions do not annually exceed 30% of the annual labour income.

    The abovementioned tax benefits may be applied as long as they do not exceed 40% of the total income received or 5,040 tax value units (Approx. USD 60,000).

  • Capital gains

    For Colombian tax purposes, capital gains are those that are not obtained by a taxpayer as a result of the activities that she or he ordinar¬ily carries out. The activities that trigger capital gains are specifically listed in the Colombian Tax Code:

    • Capital gains from the sale of fixed assets that have been owned by the taxpayer for a term of two or more years;
    • Profits obtained in the liquidation of legal entities, and that do not correspond to undistributed profits or reserves;
    • Gains resulting from estates, legacies and donations (gifts);
    • Prizes, awards, lotteries and gambling earnings; and
    • As from FY 2019, life insurance indemnities are taxed as capital gains, only on the amount that exceeds 12.500 Tax Value Units (Approx. USD 136.000).

Cayman Islands Small Flag Cayman Islands

N/A

Germany Small Flag Germany

Income and gains are generally taxed at a progressive income tax rate, ranging from 14 to 45%. In addition, a solidarity surcharge of 5.5% of the tax due is levied, which is payable to finance German reunification. However, income and gains from privately held capital investments are subject to a flat rate of 25% plus the solidarity surcharge. The tax year for individuals is the calendar year. Tax returns must be filed by the end of July of the following year (a prolongation of the term is possible) and the tax becomes due one month after its assessment by the fiscal authority. However, a withholding tax may apply or income tax retainer payments may be assed which may become due in instalments over the year (e.g. with respect to income from self-employment). It should be noted that shareholdings of at least 1% in corporations (German or other) which are held by individuals who have been resident in Germany for more than 10 years may be subject to a deemed disposal at market value if the individual gives up his or her German residence or if the potential German taxation right with respect to a share sale will be infringed by another event, e.g. a transfer of the relevant shares to a non-German resident on death (exit taxation).

Singapore Small Flag Singapore

As set out at Question 1, Singapore does not tax capital gains.

An individual resident in Singapore for tax purposes is subject to income tax at progressive rates between 2% to 22%. For non-resident individuals, different rates of tax apply to different categories of income - e.g. employment income is taxed at 15% or progressive resident rates, whichever is higher; director fees are taxed at 22%. If in the course of employment the taxpayer is granted rights to acquire shares (i.e. an employee stock option or share ownership plan) in the employer, the rights are deemed employment income and subject to tax at the time of grant, exercise or vesting (where applicable).

Income is taxed on a preceding year basis – individual income tax is filed annually between March and April in relation to income earned from 1 January to 31 December of the preceding year. Generally, individuals can enjoy up to 12 months interest-free instalments to pay up their income tax bills.

A Singapore Citizen or Permanent Resident employed in Singapore is required to pay monthly contribution to the Central Provident Fund – a compulsory comprehensive social security system. The rates of contribution by the employee are between 5% to 20% of wage, depending on his / her age.

Portugal Small Flag Portugal

Income subject to Portuguese PIT is divided by categories. In general, employment and related income (including pension income) is taxed at progressive and marginal tax rates that go as high as 48% (plus a solidarity surcharge of 2,5% to 5%). On the other hand, capital gains and rental income is taxed at a special fixed 28% tax rate (existing the possibility of the individual choosing to aggregate this types of income and subject them to the progressive and marginal tax rates). Please note that income from tax havens is usually taxed at an aggravated 35% tax rate.

The Portuguese tax year runs from January 1st to December 31st.

Individuals who are subject to PIT in Portugal are obliged to submit a PIT return between April 1st and June 30th of the year following the one to which the income relates to.

France Small Flag France

Income/capital gains earned by individuals are taxable, as a general rule, on a cash basis.

The French tax year begins on January 1st of each year for individual income tax purposes.

By way of exception to this general rule, the transfer of residence abroad entails the payment of an exit tax on latent capital gains incurred by financial assets owned by an individual who has been resident of France for more than six years during the last ten years.

The death of the taxpayer does not entail the payment of capital gains on assets he/she owned but gives rise to inheritance tax as explained in § 5.1.

The tax treatment is different depending on whether the individual is resident (see §2.1) or non-resident (see § 2.2.) of France and on the nature of the income/capital gains received.

2.1. Income/capital gains tax regime applying to French resident taxpayers

  • Wages and salaries are subject to a progressive tax scale with a marginal tax rate of 45 % for 2018. Social contributions are also due at the rate of 9.7 % for 2018.
  • Real estate income is also subject to the same progressive tax scale with a marginal tax rate of 45% for 2018. Social contributions are due at the rate of 17.2% for 2018.
  • Since January 1st 2018, investment income are subject to a flat tax of 30% including income tax at the rate of 12.8% and social contributions at the rate of 17.2%. Nevertheless, if more favourable the taxpayer may elect for the application of the progressive scale rates.
  • Capital gains on real estate are subject to tax at the flat rate of 19% and social contributions at the rate of 17.2%. Rebates for duration of ownership apply allowing a total exemption of income tax after 22 years of ownership and a total exemption of social contributions after 30 years of ownership. An additional tax applies on capital gains exceeding 50,000 € varying from 2% to 6%.
  • Capital gains on the sale of pass through entities’ shares owning French real estate are subject to tax under similar conditions than those applying upon the sale of French real estate properties (see just before).
  • Since January 1st 2018, capital gains on securities and shares are subject to a flat tax of 30% including income tax at the rate of 12.8% and social contributions at the rate of 17.2%. Rebates for the duration of ownership will not apply any longer. Once again, the taxpayer may elect for the application of the progressive scale rates.

A supplementary contribution also applies amounting to 3% for the fraction of income between 250,000 € and 500,000 € for a single (500,000 € and 1,000,000 € for a couple) and to 4% for the fraction exceeding 500,000 € for a single (1,000,000 € for a couple).

2.2. Income/capital gains tax regime applying to non-French resident taxpayers

  • The tax regimes applying to Wages and salaries and real estate income as described in § 2.1 on residents also apply to non-resident taxpayers. However, a minimum tax rate of 20% is due by the latter (30% as from 2020, under theFinance Act for 2019).
  • Dividends distributed in 2018 are subject to a 12.8% withholding tax.
  • Interests benefit from an exemption under certain conditions.
  • Royalties are subject to a 33.33% withholding tax.
  • Capital gains on real estate are subject to the same tax regime than those which applies to resident taxpayers. Rebates for duration of ownership applies allowing a total exemption of income tax after 22 years of ownership and a total exemption of social contributions after 30 years of ownership. An additional tax applies on capital gains exceeding 50,000 € varying from 2% to 6%.
  • Capital gains on securities and shares of companies owning real estate properties located in France having a market value exceeding those of other assets they own are subject to tax at the rate of 19% and social contributions at the rate of 17.2%. Rebates for duration of ownership applies allowing a total exemption of income tax after 22 years of ownership and a total exemption of social contributions after 30 years of ownership. An additional tax applies on capital gains exceeding 50,000 € varying from 2% to 6%.
  • Capital gains on securities and shares are only taxable in France if the participation of the family members (including the spouse, ascendants, descendants and their spouses) exceeds 25% of the voting rights of the sold company at any time during the five-year period preceding the sale. Since January 1st 2018, capital gains on securities and shares are subject to a flat tax of 12.8% (in that case, rebates for duration of ownership do not apply any longer). However, if more favourable the taxpayer may elect for the application of the progressive scale rates with application of rebates for duration of ownership.

The rate of withholding taxes may also amount to 75% when payments are made to individuals resident in non-cooperative states or territories.

The supplementary contribution amounting to 3% and 4% also applies to non-resident taxpayers.

The tax regime described in this paragraph may be altered when a tax treaty applies.

Liechtenstein Small Flag Liechtenstein

Tax rates are different for singles and married couples and are increasing depending on income. Maximum rates for resident individuals are between 20% and 22.4% depending on the commune in which they live. Maximum rates for non-residents and for property capital gains are 24%.

The tax year is the calendar year. In case one is relocating to Liechtenstein, the liability starts and that date and ends at year end. Tax returns must be submitted between April and September of the following year.

Mexico Small Flag Mexico

Individuals are obliged to pay income tax over all their income, regardless it is obtained in cash, goods, credit and in its case accrual or services.

The income tax of individuals is calculated in a schedular way, separating the different types of income that an individual can receive. Each of the regulated taxable income has its own calculation and deduction system, and each individual has to calculate the income obtained by each of the regimes and has to add the result to the general total income.

Among the different regimes regulated by our Law, there are the following: income from salaries; income from business and professional activities; income from leases; income from the sale of goods; income from the acquisition of assets; income from interests; income from obtaining prizes; and income from dividends and from profits distributed by a legal entity.

Once the individual calculates the tax base in accordance with the particular regime of each income (with their own deductions, if applicable), all income obtained during the year shall be added, regardless of their source of origin. The resulting amount can be reduced by personal deductions (deductions that can be made by all individuals), and the total amount will be the general tax base.
The rate imposed to the income of individuals is a progressive fee, contemplated on the article 152 of the Mexican Income Tax Law. The tax rates can go from the 1.92% up to 35% on the individual´s total income, depending on its amount.

Regarding the tax year, in accordance with article 11 of the Mexican Federal Tax Code, tax year equals the calendar year, so it starts on January 1 and ends on December 31. The annual tax return shall be presented before April 30 of the immediately following calendar year to the year in which such incomes were obtained.

Notwithstanding the foregoing, throughout the tax year individuals shall execute advance payments over the income tax. Such payments shall be credited by the tax payer from the annual income tax calculation at the end of the tax year.

Brazil Small Flag Brazil

Income tax is levied on the income of taxpayers resident in Brazil. It has progressive rates according to the amount of income earned by taxpayers, so that those of lower income are not reached by taxation or by a lower tax rate.

Annual income tax basis (R$)

Tax rate (%)

Portion to be deducted from Personal Income Tax  (R$)

Up to R$22.847,76

-

-

From  R$22.847,77 to R$33.919,80

7,50%

 R$                          1.713,58

From R$33.919,81 to R$45.012,60

15,00%

 R$                          4.257,57

From R$45.012,61 to R$55.976,16

22,50%

 R$                          7.633,51

Above R$55.976,16

27,50%

 R$                        10.432,32

Income tax is withheld when paid to individual by legal entities or is due up to the last business day of the following month when the income is paid by another individual.

For non-residents the tax rate is flat at 15% for non low tax jurisdictions and at 25% for low tax jurisdictions and is due at the date the funds are paid. Please consider low tax jurisdictions countries that do not tax income or tax it at a rate lower than twenty percent (20%), or whose domestic legislation does not allow access to information related to the ownership or ownership of legal entities. Normative Instruction no. 1.037/2010 brings the list of jurisdictions considered in Brazil as ‘low tax’.

Capital gains tax is levied on gains (i.e. positive difference between selling price and cost of acquisition) earned by residents and non-residents (if assets located in Brazil are the object of the transaction), in the following operations:

I - alienation, in any way, of goods or rights or assignment or promise of assignment of rights to its acquisition, such as those made by purchase and sale, exchange, award, payment in kind, own promise, promise to buy and sell, assignment of rights or promise of assignment of rights and related contracts;

II - transfer to heirs and legatees in succession, to grantees in donation, including in advancement of the forced estate, or assignment to ex-spouse or ex-cohabitant, in the dissolution of the conjugal society or stable union of goods and rights for a value greater than that declared in the Tax Return of the deceased, the donor, the former spouse or former cohabitant who transferred them.

For the sale of assets and rights of any kind made from January 1, 2017, the capital gain perceived by the individual will be subject to the following tax rates:

I - 15% on the portion of the gains not exceeding R$ 5,000,000.00;

II - 17.5% on the portion of the gains that exceeds R$ 5,000,000.00 and does not exceed
R$ 10,000,000.00;

III - 20% on the portion of the gains that exceeds R$ 10,000,000.00 and does not exceed
R$ 30,000,000.00; and

IV - 22.5% on the portion of the gains that exceed R$ 30,000,000.00.

In case of sale in parts of the same good or right, as from the second operation, provided that it is carried out until the end of the calendar year following the first operation, the calculation must add to the gains earned in previous transactions, for the purpose of determining the appropriate tax rate and total tax due.

For non-residents in Brazil and residents on low tax jurisdictions, the withholding tax rate on capital gain is flat at 25%.

In all the cases, income tax on capital gain is due up the last business day of the following month of payment and is proportional to each instalment in cases of a deferred payment.

The fiscal year in Brazil begins on January 1st and ends on December 31st. Individuals resident in the country must file their tax return annually, until April 30th of the following calendar year. Therefore, income and capital gains earned during 2018 will be declared in the Tax Return of 2019.

Updated: May 30, 2019