You can postpone income tax liability, if
- You acquire the financial assets with the money in your investment account
- You transfer income earned on the financial assets (e.g. dividends or interests of investment deposit) and the gains from transfer of the financial assets to the investment account as soon as possible
Tax liability is created, if payments from the investment account exceed contributions into the account.
Accounting must be common for all investment accounts; in case of a positive difference, income tax is to be paid based on the next year’s Income Tax Return.
For the purpose of Income Tax Act, a contribution to investment account is
- Initial balance of the account
- Cash deposited in the account
- Financial income subject to taxation (e.g. interests and dividends on which income tax has been withheld)
- Acquisition and disposal expenses of financial assets, if the funds of investment account were not used
- Loss on securities for the previous years (can be shown only in Income Tax Return of 2011)
- Acquisition cost of existing financial assets (incl. unit-linked life insurance contract) or the deposited amount (can be shown only in Income Tax Return of 2011).
A contribution is not
- Untaxed income on financial assets (e.g. gains from transfer of financial assets)
- Transfer from another investment account
For the purpose of Income Tax Act, a payment from investment account is
- Any transfer made from the investment account
- Income earned on financial assets, which is not transferred promptly to the investment account
- Account balance of a closed investment account, which is not transferred to another investment account
A payment is not
- Acquisition of financial assets
- Transfer to another investment account
Declaration of investment account
- The investment account numbers must be shown
- Movements in investment account are declared jointly
- Each contribution and payment is shown on a separate row
- Last fields show the difference of payments and contributions; positive result is subject to taxation
- The deadline of paying the income tax is 1 July.