{"id":195180,"date":"2016-06-08T14:45:22","date_gmt":"2016-06-08T11:45:22","guid":{"rendered":"https:\/\/www.bondora.com\/blog\/?p=3189"},"modified":"2016-06-08T14:45:22","modified_gmt":"2016-06-08T11:45:22","slug":"bondora-investments-taxed-estonia","status":"publish","type":"post","link":"https:\/\/goandgrow.eu\/en\/blog\/bondora-investments-taxed-estonia\/","title":{"rendered":"How are Bondora investments taxed in Estonia for a private person"},"content":{"rendered":"

We made a query to the Estonian Tax and Custom Board on how to declare your Bondora earnings. Here is a short summary how peer-to-peer lending is taxed in Estonia for a private person (applies only to Estonian residents) and a step-by-step guide on where to find the relevant data on our platform.<\/p>\n

What type of personal income is taxed in Estonia?<\/h2>\n

According to Estonian Income Tax Act chapter 3 Taxation of income of resident natural persons – \u00a7 12. Income of resident natural person – taxable income in Estonia includes income from employment, business income, INTEREST (\u00a7 17)<\/strong><\/a>, rental income and royalties, capital gains, pensions and scholarships, dividends, insurance indemnities and payments from pension funds and income of a legal person located in a low tax rate territory.<\/p>\n

\u00a7 17. Interest<\/strong>
\nIncome tax is charged on all interest accrued from loans, leases and other debt obligations, as well as securities and deposits, including such amount calculated on the debt obligations by which the initial debt obligations are increased. Interest shall also include monetary payments made to unit-holders on account of a contractual investment fund, excluding the payments specified in subsection 15. The fine for delay (late fee) payable in the event of delay in performance of a monetary obligation is not deemed to be interest.<\/p>\n

Read in detail:
\nIncome Tax Act in English<\/a>
\nTulumaksuseadus (TuMS) in Estonian<\/a><\/p>\n

How income in peer-to-peer lending is taxed in Estonia for a private person?<\/h2>\n

The income tax rate in Estonia is 20%. In peer-to-peer lending the yearly declaration consists of:<\/p>\n

    \n
  1. Earned interest<\/strong> (received interest payment from the borrower)<\/li>\n
  2. Earned interest from defaulted loans<\/strong><\/li>\n
  3. Secondary Market capital gains<\/strong> (profit earned from selling and buying loan shares)<\/li>\n<\/ol>\n

    For Bondora investors that means declaring \u201cTotal Interest Received\u201d. This column consists of all earned interest and earned interest from defaulted loans and you\u2019ll find that information from the Cash Flow page. If you read on we\u2019ll show you where and how to find the data you need from Bondora.<\/p>\n

    If your net profit is purely virtual and your strategy is to reinvest all your returns, it doesn\u2019t matter \u2013 you still have to declare the earned interest. If for some reason you haven\u2019t earned any profit in a calendar year, e.g. when the borrower is on payment holiday and no interest has been received, then you have no duty of declaration \u2013 you only pay on actual received interest payments. Keep in mind that you cannot use Investment Account (\u00a7172<\/sup>)<\/a> to invest on Bondora. And when declaring your income as a private person you cannot offset any losses or fees against earned interest and income tax is payable on gross interest received.<\/p>\n

    Is capital gains earned from trading on the Secondary Market also taxed?<\/strong>
    \nYes, you are obliged to declare any capital gains earned from profitable sales on the Secondary Market. Here is an illustrative example: Let\u2019s say you bought a \u20ac5 loan and sold it with a mark-up for \u20ac6 from which you made a profit of \u20ac1 – this \u20ac1 you declare as the Secondary Market capital gain.<\/p>\n

    Step-by-step guide to finding your earned income on Bondora<\/h2>\n

    How to find income earned from interest payments.<\/p>\n

    CASH FLOW \u2013 Account Statement PDF<\/strong><\/p>\n

    \"CashflowPDF\"
    \nGo to the Cash Flow page, choose the period and click on the PDF icon \u2013 the Account Statement report will be created for you immediately. On the Account Statement PDF the most relevant rows for you are \u201cInterest Received\u201d and \u201cInterest Repaid from Loans in Default\u201d that already includes earned interest + earned interest from defaulted loans.<\/p>\n

    REPORTS \u2013 Account Statement or Monthly Overview<\/strong><\/p>\n

    \"cash
    \nThe second option is to go to the Reports page. There you can filter out earned interest + earned interest from defaulted loans to get separate values. Click on \u201cCreate new report\u201d and check \u201cAccount statement\u201d or \u201cMonthly overview\u201d and choose your period. The relevant rows for you are \u201cRepaid Interest\u201d and \u201cRepaid Penalties\u201d.<\/p>\n

    How to find capital gains earned from trading on the Secondary Market.
    \nREPORTS \u2013 Investment List<\/strong><\/p>\n

    \"peer-to-peer
    \nThe \u201cInvestment List\u201d gives you the best overview of your Secondary Market capital gains. These four columns \u2013 Investment Principal, Purchase Price, Sold in Resale Price, Sold in Resale Principal \u2013 help you calculate your capital loss and gain on Bondora.<\/p>\n

     <\/p>\n

    Please note that Bondora does not provide tax, financial or legal advice. We recommend that you consult your financial or tax adviser if you have any questions. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    We made a query to the Estonian Tax and Custom Board on how to declare your Bondora earnings. Here is a short summary how peer-to-peer lending is taxed in Estonia for a private person (applies only to Estonian residents) and a step-by-step guide on where to find the relevant data on our platform. What type of […]<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[117],"tags":[],"class_list":["post-195180","post","type-post","status-publish","format-standard","hentry","category-bondora-news"],"acf":[],"featured_image":null,"categories_names":["News"],"category_name":"News","_links":{"self":[{"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/posts\/195180","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/comments?post=195180"}],"version-history":[{"count":0,"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/posts\/195180\/revisions"}],"wp:attachment":[{"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/media?parent=195180"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/categories?post=195180"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/tags?post=195180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}