{"id":6469,"date":"2017-02-17T17:17:26","date_gmt":"2017-02-17T15:17:26","guid":{"rendered":"https:\/\/www.bondora.com\/blog\/?p=6469"},"modified":"2017-02-17T17:17:26","modified_gmt":"2017-02-17T15:17:26","slug":"taxation-of-p2p-investments-in-estonia","status":"publish","type":"post","link":"https:\/\/goandgrow.eu\/en\/blog\/taxation-of-p2p-investments-in-estonia\/","title":{"rendered":"Taxation of P2P investments in Estonia"},"content":{"rendered":"<p align=\"left\">Tax filing season has once again started in Estonia and many investors have been asking about declaring the earnings from their Bondora investments. To answer this question we gathered the relevant information and provided a step-by-step guide on where to get it on Bondora. The information has been collected with the help of Estonian Tax and Custom Board.<\/p>\n<p align=\"left\">Below we have provided:<\/p>\n<ol>\n<li>A short summary on how peer-to-peer lending is taxed for Estonian residents and,<\/li>\n<li>A step-by-step guide on where to find the relevant data on our platform.<\/li>\n<\/ol>\n<h3>Summary: How P2P Lending is Taxed for Estonian Residents<\/h3>\n<p align=\"left\"><strong>What type of personal income is taxed in Estonia?<\/strong><\/p>\n<p align=\"left\">Taxable income in Estonia includes income from:<\/p>\n<ul>\n<li>Employment,<\/li>\n<li>Business income,<\/li>\n<li><a href=\"https:\/\/www.riigiteataja.ee\/en\/eli\/529022016001\/consolide#para17\" target=\"_blank\" rel=\"noopener\">Interest (\u00a7 17)<\/a>,<\/li>\n<li>ental income and royalties,<\/li>\n<li>Capital gains,<\/li>\n<li>Pensions and scholarships,<\/li>\n<li>Dividends,<\/li>\n<li>Insurance indemnities and payments from pension funds<\/li>\n<li>Income of a legal person located in a low tax rate territory.[i]<\/li>\n<\/ul>\n<p align=\"left\"><strong>Charging income tax from interest (\u00a7 17. Interest of the Income Tax Act)<\/strong><\/p>\n<p align=\"left\">Income 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.<\/p>\n<p align=\"left\">Interest also includes 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. Find more detail in <a href=\"https:\/\/www.riigiteataja.ee\/en\/eli\/529022016001\/consolide\" target=\"_blank\" rel=\"noopener\">English<\/a> or in <a href=\"https:\/\/www.riigiteataja.ee\/akt\/123122013023\" target=\"_blank\" rel=\"noopener\">Estonian<\/a>:<\/p>\n<p align=\"left\"><strong>How income in peer-to-peer lending is taxed in Estonia for a private person?<\/strong><\/p>\n<p align=\"left\">The income tax rate in Estonia is 20%. <a href=\"https:\/\/www.goandgrow.eu\/en\/peer-to-peer-lending\">In peer-to-peer lending<\/a> the yearly declaration consists of:<\/p>\n<ol>\n<li><strong>Earned interest<\/strong> (received interest payment from the borrower)<\/li>\n<li><strong>Earned interest from defaulted loans<\/strong><\/li>\n<li><strong>Secondary Market capital gains<\/strong> (profit earned from selling and buying loan shares)<\/li>\n<\/ol>\n<p align=\"left\">For Bondora investors that means declaring \u201cTotal Interest Received\u201d. This column consists of all earned interest and earned interest from defaulted loans. This information is on the <a href=\"https:\/\/www.goandgrow.eu\/cashflow\" target=\"_blank\" rel=\"noopener\">Cash Flow page<\/a>. Read on to learn where and how to find the data from Bondora.<\/p>\n<p align=\"left\">Citizens must still declare the earned interest even if your net profit are purely virtual and your strategy is to reinvest all your returns.<\/p>\n<p align=\"left\">If for some reason you haven\u2019t earned any profit in a calendar year, then you have no duty of declaration \u2013 you only pay on actual received interest payments.<\/p>\n<p align=\"left\">Keep in mind that you cannot use <a href=\"https:\/\/www.riigiteataja.ee\/en\/eli\/529022016001\/consolide#para17b2\" target=\"_blank\" rel=\"noopener\">Investment Account (\u00a717-2)<\/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<p align=\"left\"><strong>Are capital gains earned from trading on the Secondary Market also taxed?<\/strong><\/p>\n<p align=\"left\">Yes, 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 \u2013 this \u20ac1 you declare as the Secondary Market capital gain.<\/p>\n<h3>Step-By-Step Guide: Finding Your Earned Income on Bondora<\/h3>\n<p align=\"left\"><strong>REPORTS\u00a0\u2013 Tax Report\u00a0PDF<\/strong><\/p>\n<p align=\"left\">Go to the Reports\u00a0page, choose the period and click on the PDF icon. The Tax\u00a0Report will be created for you immediately. On the Tax Report\u00a0PDF the most relevant rows are \u201cInterest Received\u201d and \u201cInterest Repaid from Loans in Default\u201d. Total interest received is the sum of\u00a0the two.<\/p>\n<p align=\"left\">If you want to know the earned capital gains from Secondary Market trading, the relevant values to look at are &#8220;Profit from secondary market sales&#8221;, &#8220;Profit from secondary market purchases&#8221;, &#8220;Losses from secondary market sales&#8221; and &#8220;Losses from secondary market purchases&#8221;.<\/p>\n<p align=\"center\"><img decoding=\"async\" class=\"aligncenter size-full wp-image-6495\" src=\"https:\/\/www.goandgrow.eu\/blog\/wp-content\/uploads\/tax-report-e1487342389107.png\" alt=\"Bondora Tax Report\" width=\"600\" \/><\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-6507\" src=\"https:\/\/www.goandgrow.eu\/blog\/wp-content\/uploads\/tax-report-income-statement.png\" alt=\"Tax Report - Income Statement\" width=\"482\" height=\"361\" \/><\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-6509\" src=\"https:\/\/www.goandgrow.eu\/blog\/wp-content\/uploads\/tax-report-account-statement.png\" alt=\"Tax Report - Account Statement\" width=\"498\" height=\"335\" \/><\/p>\n<p align=\"left\"><strong>REPORTS \u2013 Monthly Overview<\/strong><\/p>\n<p align=\"left\">The second option is look at the Monthly Overview report in\u00a0the Reports page. Click on \u201cCreate new report\u201d and check \u201cMonthly overview\u201d and choose your period. The relevant rows for you are \u201cRepaid Interest\u201d, \u201cRepaid Penalties\u201d, &#8220;WriteOffInterest&#8221; and &#8220;DebtServicingCostInterest&#8221;.<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-6501 size-full\" src=\"https:\/\/www.goandgrow.eu\/blog\/wp-content\/uploads\/monthly-report-2016-1.png\" alt=\"taxation of P2P investments\" width=\"942\" height=\"555\" \/><\/p>\n<p>&#8212;&#8212;<\/p>\n<p align=\"left\">[i] According to Estonian Income Tax Act chapter 3 Taxation of income of resident natural persons \u2013 \u00a7 12.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tax filing season has once again started in Estonia and many investors have been asking about declaring the earnings from their Bondora investments. To answer this question we gathered the relevant information and provided a step-by-step guide on where to get it on Bondora. The information has been collected with the help of Estonian Tax [&hellip;]<\/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-6469","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\/6469","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=6469"}],"version-history":[{"count":0,"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/posts\/6469\/revisions"}],"wp:attachment":[{"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/media?parent=6469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/categories?post=6469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goandgrow.eu\/en\/wp-json\/wp\/v2\/tags?post=6469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}