Welcome back dear Financial Empires readers, we are always very pleased to have you here with us. Today in our daily article we will talk about online trading, specifically, we will deal with Etoro tax return, we will see how to pay eToro taxes, why it is convenient to do it and how to make the tax return.
With our comprehensive guide you won’t have any problems in the future. Follow carefully to the end, please, and you will avoid any misunderstandings with the taxman.
What is eToro?
Let’s start by understanding what eToro taxes is, it is a brokerage company for social investing, which boasts branches all over the world, including:
- United States
This online trading platform offers various investment possibilities, both manual and social, and is available both on the desktop version of eToro and on the online application (eToro app Google Play, eToro app Apple).
Investments on eToro
With regard to manual investment, the company provides a wide range of stocks, currencies, commodities, cryptocurrencies and ETFs, through the use of its platform and using the specific tools and analyzes of eToro payment of taxes.
In addition, clients can choose from a wide range of financial assets and decide which ones to invest in.
And to make this possible, the eToro platform guarantees full transparency, making available to its customers:
- Specific data
- The percentages of earnings eToro taxes
- The risk score
- The composition of your portfolio
Ideal for long-term investment, called eToro Smart Portfolios, which are prepackaged investment portfolios, which include:
- The best investments of the platform
- A set of financial assets, designed specifically for each client
How do taxes work on eToro?
Now let’s go into the specifics and try to understand how to pay taxes on eToro, let’s see what are the tax regimes dedicated to traders, to allow them to pay taxes on their online trading earnings.
First of all, we need to make some clarifications, talking about trading taxes is not correct, considering that what you pay on these online transactions are taxes and not taxes.
But what exactly is it about?
Precisely, taxes are all those taxes that are related to online trading, and therefore on financial transactions, of buying and selling financial instruments through platforms or online sites for trading.
So, how to pay taxes on eToro?
Now through our article we will try to give you the appropriate instructions to fill out the tax return, so as to avoid future problems.
Since the operations of eToro, trading taxes must be declared, both for capital gains, or gains on eToro, and for losses.
EToro capital gains declaration
As far as capital gains are concerned, it is compulsory to declare them; while it is advisable for capital losses.
Because on the profits eToro must be declared, the taxes that must be paid are calculated.
But a complete statement of all trading transactions on eToro must still be submitted.
How not to pay trading taxes?
If there are no earnings with eToro you will not pay anything, even if for transparency reasons you must allow access to your eToro account statement in euros.
Obviously, this is the account statement of the eToro platform and not the bank statement.
Do you pay taxes on online trading?
So let’s see now, if you pay taxes on your eToro account.
Specifically, the capital gains deriving from trading must be paid, it is in fact mandatory to declare your account to the tax authorities, providing the account statement for tax control, even if it is not sure if this happens.
What must be done is to download the eToro account statement and declare it in the Single Tax Debt Certificate, which is a collateral form to the classic 730 and if it presents a capital gain, the taxes to be paid will have to be calculated on the latter, for the annual capital gain.
From a tax point of view, the company in question fully complies with all applicable legal and regulatory requirements, and is subject to the CRS (Common Reporting Standard).
On capital losses, on the other hand, no taxes should be paid, although we would like to advise you to declare the account statement anyway, to give the idea of continuity of trading activity, for any fiscal monitoring.
Precisely because the taxman is always enabled to control money laundering operations.
When to declare trading earnings?
It is always better to declare the statement of account, especially if you have open positions and have not closed yet.
Basically, how taxes work on eToro refer to the tax return which includes capital gains, so whether you withdraw or not, nothing changes for tax purposes, it is up to the user to decide whether to leave the money in the eToro account or not.
The Italian tax authorities care that capital gains are declared, consequently, the account statement to be able to verify them.
EToro 730 in Italy
Now let’s see what to do regarding eToro tax return on online trading.
To do this, you must use the Single Tax Debt Certificate, more simply CUD or debt model which is a separate form, which must be attached to the 730 form.
How to pay taxes on eToro?
Now let’s analyze in a practical way how to pay trading taxes, carried out through eToro.
Consider the calendar year, from January 1 to December 31, if you have done online trading on eToro, you must be in good standing.
Therefore, you will have to retrieve the account statement directly on the platform and download the data of the last year.
In this case there are two alternatives, a profit has been recorded or the opposite, that is, we have lost money.
In the first case, it will be useful to find the item concerning the overall profit, to calculate taxes.
The rate of 26% must be applied to the overall capital gain, in order to understand when it will eventually have to be paid to the tax authorities.
In the second case, however, it will be sufficient to declare the eToro account statement, where it will be seen that there have been no profits.
As we said earlier, however, it is always better to declare, since tax checks are useful to understand if someone is handling much more money than what they claim, or for anti-money laundering control issues.
EToro withholding agent
Another aspect to take into consideration is that eToro does not work as a withholding agent.
Therefore, all revenues are before taxes, which obviously will have to be paid, because this trading platform works all over the world and, therefore, must comply with the laws and regulations of each state.
Not being a withholding agent, it is the end user who must calculate the income taxes, based on the tax laws in force in the area in which he is located and acts.
Well dear readers of Financial Empires, thanks to our guide you know how to make eToro tax return, so as not to run into nasty surprises with the taxman.
Financial Empires, The Editorial Staff
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