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?

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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 2017. Social contributions are also due at the rate of 8.2% for 2017.

    They will increase to 9.9 % as from January 1st 2018.

  • Real estate income is also subject to the same progressive tax scale with a marginal tax rate of 45% for 2017. Social contributions are due at the rate of 15.50% for 2017.

    They will increase to 17.2% as from January 1st 2018.

  • Investment income is subject to the same progressive tax scale with a marginal tax rate of 45% for 2017. Social contributions are due at the rate of 15.50% for 2017.
  • As from January 1st 2018, investment income will be 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 15.50%. 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%.

    As from January 1st 2018 social contributions will increase to 17.20%.

  • 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).
  • Capital gains on securities and shares are currently subject to same progressive scale rates with a marginal rate of 45% for 2017. Social contributions are due at the rate of 15.50% for 2017. Some rebates depending on the duration of ownership apply for the determination of the taxable gains.

    As from January 1st 2018, capital gains on securities and shares will be subject to a flat tax of 30% including income tax at the rate of 12.80% and social contributions at the rate of 17.20%. 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.
  • Dividends distributed in 2017 are subject to a 30% withholding tax. The rate is reduced to 21% if dividends are paid to an individual resident in a member State of the European Economic Area.

    As from January 1st 2018 dividends will be subject to a 12.8% withholding tax whatever the country of residence of the shareholders.

  • Interest 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%.

    As from January 1st 2018 social contributions will increase to 17.20%.

  • 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 15.50% (for 2017). 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%.

    As from January 1st 2018 social contributions will increase to 17.20%.

  • Capital gains on securities and shares are only taxable in France if the participation of the family members (including the spouse, ascendants, descendants, their spouses) exceeds 25% of the voting rights of the sold company at any time during the five-year period preceding the sale. The income tax regime applying in 2017 is the same for resident and non- resident taxpayers. However, social contributions do not apply to the latter.

    As from January 1st 2018, capital gains on securities and shares will be subject to a flat tax of 12.80%. Rebates for the duration of ownership will not apply any longer.

The rate of withholding taxes may also be 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.

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 by the 16th of June and 30th of November) and the payment of the balance, which must be usually made by the 16th of June of the following year.

Israel Small Flag Israel

Individuals are subject to tax on their worldwide income from the following sources: (i) business and vocation; (ii) employment (iii) dividends and interest; (iv) pensions and annuities; (v) rental income; (vi) gains or profits derived from agriculture; (vii) patent and copyright (viii) capital gains; (ix) earnings or profit from gambling, lotteries or prizes; and any other source not excluded under tax law.

Non-Israeli residents are taxed on specific income derived from Israeli sources. The taxation may vary according to the applicable Tax Treaty.

While regular income is subject to progressive tax rates depending on the extent of the individual's personal income (i.e., earned income from employment or self-employment are taxable according to tax brackets in the range between 10%–47%), capital gains are generally subject to a fixed rate of 25% or 30% for an individual who is a substantial shareholder (i.e., a shareholder holding 10% or more on one of the means of control of the company paying the dividend) ("Substantial Shareholder").

An additional 3% will be added for every individual taxpayer whose aggregated income, from all sources, exceeds NIS 640,000, with respect to the part of income exceeding NIS 640,000.

Israel also imposes indirect municipal taxes which are not imposed on income or gains, but paid directly to the municipal authorities.

An exit tax is payable by individuals who cease to be Israeli residents based on a deemed sale of their worldwide assets one day before they cease to be a resident. At the taxpayer's discretion, the tax can be paid either when the individual leaves Israel or when the asset is sold, at which time the tax will be calculated on a linear basis on the appreciation while resident in Israel.

Individuals are not invariably required to file a tax return in Israel; however Individuals receiving income which exceed the amounts under the tax regulations are required to submit an annual return. Other circumstances can subject an individual to filing requirements. For example, holding 10% or more in a corporation, holding foreign bank accounts which exceed a certain balance, or holding foreign securities.

The tax year is concurrent with the calendar year, commencing on 1 January and ending on 31 December each year. The filing deadline for tax returns is usually:

  • 31 May the following year for individuals filing returns online.
  • 30 April the following year for others.

Extensions for filing can be requested from the ITA.

National insurance (social security) rates
are currently as follows:

  • Resident employees: 3.5%-12%.
  • Employers of resident employees: 3.45%-7.5%.
  • Non-resident employees: 0.04%-0.87%.
  • Employers of non-resident employees: 0.49%-2.55%.

Greece Small Flag Greece

The types of income are generally taxed as follows:

  • Employment and pensions income [to be reduced from 1.1.2018 if Greece meets certain fiscal and monetary criteria]

    0-20k: 22%, 20k-30k: 29%, 30k-40k: 37%, above 40k: 45, applied progressively.

  • Investment income

    (i) Dividends: 15% [usually withheld at source]

    (ii) Interest: 15% [usually withheld at source]. Greek State bonds and other –related to the Greek sovereign debt restructuring scheme- type of securities are generally tax exempted.

    (iii) Royalties: 20% [usually withheld at source]

    (iv) Property leases: 0-12k: 15%, 12k-35k: 35%, above 35k: 45%, applied progressively.

  • Business income: 29% [to be reduced from 1.1.2018 if Greece meets certain fiscal and monetary criteria]
  • Capital gains

    (i) Real estate [subject to conditions; it is also worth noting that at the time this paper was drafted, real estate capital gains tax was suspended until Dec 31st 2017]: 15%

    (ii) Securities [shares, bonds etc]: 15%. It is worth noting that, subject to conditions, individuals holding listed shares constituting less than 0,5% of the entity’s share capital are tax exempted when selling, provided the individual has acquired these after January 1st 2009 [shares acquired earlier are generally exempted, subject to conditions].

Tax years’ start and end coincide with the calendar.

Tax returns are generally filed by the 30th of June of the year following the income’s generation year.

Non-withheld tax can be paid either in full -following clearance- or in equal installments [e.g. 31.7.2017, 29.9.2011 and 30.11.2017].

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).

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 38.830 EUR (income year 2017). 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.

British Virgin Islands Small Flag British Virgin Islands

N/A.

UAE Small Flag UAE

N/A.

New Zealand Small Flag New Zealand

The current income tax rates for the 2017/18 income year applicable to NZTR individuals are:

Taxable income

Tax on this income

NZD0 - NZD14,000

10.5%

NZD14,001 - NZD48,000

17.5%

NZD48,001 - NZD70,000

30.0%

Over NZD70,000

33.0%

There are no estate taxes, CGTs or inheritance taxes in New Zealand. Unless a landowner is dealing in or subdividing land, gains on an increase in land value are not taxable in New Zealand.

Employment income, if earned by way of salary, wages or bonus is taxable at the recipient’s marginal tax rate. Employers must deduct pay as you earn (“PAYE”) tax at the employees’ tax rate to the Inland Revenue Department (“IRD”). The individual is responsible for filing their annual tax return.

Stock options are non-taxable, unless they are deemed to be part of income under an employment contract.

Monaco Small Flag Monaco

None. See Question 1.

Updated: December 8, 2017