pääomatuloveroa

Pääomatuloveroa, or capital gains tax in English, is a tax levied on profits made from the sale of assets such as stocks, bonds, real estate, and other investments. In Finland, this tax applies to capital income, which is defined as income derived from wealth rather than from labor. This includes not only capital gains but also rental income, dividends, and interest.

The Finnish tax system distinguishes between earned income and capital income, applying different tax rates to each. Earned income is taxed progressively, meaning the tax rate increases with higher income. Capital income, however, is subject to a proportional tax rate, which has historically been set at 30% for income up to 30,000 euros per year. For capital income exceeding this threshold, a higher rate of 34% has been applied. These rates can be subject to change based on government policy.

The purpose of capital gains tax is to ensure fairness in the tax system by taxing income generated from investments, similar to how income from employment is taxed. It also serves as a source of revenue for the government. When an asset is sold for more than its purchase price, the difference is considered a capital gain and is subject to taxation. Conversely, if an asset is sold for less than its purchase price, a capital loss occurs, which can often be deducted from other capital gains, thereby reducing the taxable income. Understanding the specifics of pääomatuloveroa is crucial for individuals and entities involved in investment activities in Finland.