Taxation of investments.

More precisely, we'll be discussing the taxation of profits earned from investments, that is, the interest you accrue for using your money.

It goes without saying that taxation is quite important, as concealing income is punishable by harsh penalties, and tax authorities have many ways to detect undeclared income.

Therefore, it's important to know where and how much to pay, or at least how to make your investment profits legal.

The first thing to consider is what is taxable. Anything earning more than 9% per annum in foreign currency and more than 12.5% ​​in rubles. The latter is variable and calculated using the formula: the ruble interest rate + 5%; currently, it's 7.5% + 5% = 12.5%.

This means you should consider the currency you invested in and the profit you received for the year, as the year is the reporting period for filing your tax return.

So, if you invested in a hedge fund in early December and earned a 5% profit in just one month, you won't have to pay anything. It's

a different story if your profit exceeds the established limits of 9% and 12.5%.

Index Top 20 investment program as an example . Last year, investors earned 103% per annum.

103 - 9 = 94% of the profit is taxable.

So, if you invested $10,000 and received $10,300 in profit, you only pay taxes on $9,400.

Now comes the most unpleasant part: the tax rate for Russian residents is 35%, so in our case, we'd have to pay $9,400 * 35/100 = $3,290.

The question immediately arises: how to pay less?

1. Don't report investment income in your tax return at all. Problems could arise if you make large purchases totaling $15,000-20,000 and can't prove the source of your income. Investment companies themselves don't report their clients to tax authorities without a proper request.

2. Reduce the tax amount - there is a practice whereby you can pay less tax by including items such as medical treatment, education, charity, etc. in your expenses when filing your tax return.

3. Optimize your withdrawals - there are many options, including withdrawals to an investment fund's plastic card, withdrawals to electronic payment systems with subsequent cashing, or withdrawals to foreign bank accounts.

Investment taxation has another important aspect: if interest is accrued monthly, taxes must also be paid every month; interest at the end of the term - taxes at the end of the contract term.