Support

When it comes to investment income, it is important to understand the tax implications of your investments. In general, most countries tax investment income, such as interests and dividends, at the source. This means that any investment-related distributions to investors are subject to income tax, and this tax is withheld by the project owner at the moment of the payout.

In the context of crowdfunding projects, the applicable income tax rate is established by the project owner’s country of domiciliation. For example, Italian project owners follow Italian tax regulations, and Portuguese project owners follow Portuguese tax regulations.

If the investor is a tax resident of one country and the project owner is a resident of another country, the investment income earned by the investor may be subject to reduced withholding tax if there is a double-taxation avoidance treaty concluded between those two countries and the investor has uploaded a proper tax residency certificate. This is especially important in cases where the project owner country’s income tax rate is higher than the investor country’s tax rate.

Please note that tax laws and regulations can be complex and vary by country. It is always advisable to consult with a tax professional to ensure that you comply with all applicable tax laws and regulations.

Estonian investment opportunities: No tax is being held on your account. Please do your taxes according to your country's tax regulations. In case you are unaware of the requirements, we advise consulting your country's tax advisor.

Other investment opportunities: Tax is being withheld from the interest paid out. 

Read more about it here: https://blog.crowdestate.eu/en/2020/withholding-tax-and-interest-rates/

If the withholding income tax rate is lower than the investor’s domestic income tax rate, the investor would need to declare the non-taxed part of the income and, if necessary, pay additional income tax.

You will find the materials necessary for the income tax return by clicking on ‘Overview’ – ‘Reports’. There you can draw up an interest statement as well as a balance statement.

Investors with Estonian tax residency:

Estonian investment opportunities: Only private accounts are subject to income tax.

Other investment opportunities: Same as above.

In Estonia the short answer: no

Explanation by the Tax and Customs Board: income tax liability can be postponed by investing in financial assets (e.g. exchange-traded shares, fund units, etc.) openly traded in EEA states or OECD member countries by using an investment account system. An investment account system does not extend to loan-based activities (e.g. through Crowdestate).

Interest or interest on arrears on a loan are subject to income tax on a gross basis and tax liability for interest income from a loan relationship cannot be postponed through an investment account (reinvesting is not tax-exempt.

Untaxed interest or interest on arrears must be declared in the income tax return and income tax must be paid on the basis of the income tax return. If income tax has been immediately withheld by a bank in Estonia, it will be reflected in your pre-filled tax return.

Please do your taxes according to your country's tax regulations. In case you are unaware of the requirements, we advise consulting your country's tax advisor.

In Estonia: Income from the sale and purchase of Crowdestate shares is declared in row 5.6 – Other taxable income not listed above on which income tax has not been withheld.

Please do your taxes according to your country's tax regulations. In case you are unaware of the requirements, we advise consulting your country's tax advisor.

Crowdestate does not declare income – Sponsors of projects do.

In Estonia: The relevant data is available at 5.1 – Salary and other remuneration.

In the case of foreign projects, you must declare income yourself.

Please do your taxes according to your country's tax regulations. In case you are unaware of the requirements, we advise consulting your country's tax advisor.

In Estonia: The refunding of income tax depends on the income tax return for a natural person. If the annual taxable income is less than 6000 euros, the overpaid amount of income tax is returned.

Taxes are calculated in chronological order on all investment accounts and not on each account separately. See table 6.5 for payments to or from your accounts.

Here is an example of Estonian tax residency document and an Italian tax residency document, to get a better understanding of what it should look like. You can get this document from your country's tax office.

Tax residency certificates are issued by the tax department of your country of residence. In most European countries, you can download the certificate yourself from the tax department’s website.

However, if you are unable to download the certificate yourself, you can contact your country’s tax office to obtain the necessary document.

Uploading a tax residency certificate is not mandatory to open an investment account and invest with Crowdestate.

However, we strongly recommend that you obtain and upload your tax residency certificate to enjoy potential financial benefits arising from the avoidance of double taxation of your investment income.