Author Topic: UCITS ETFs and 41% tax  (Read 622 times)

dkatsafouros

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UCITS ETFs and 41% tax
« on: August 24, 2018, 03:32:35 AM »
Hi there
Quite new to the game so forgive my ignorance!
I'm located in Europe so after some research I decided that the best choice for investment would be UCITS ETFs which supposedly don't get taxed even when you have some gains from them but you get taxed when you cash out. But from what I understand, the amount of taxes you need to pay then are 41%!!.
I have the impression that this completely ruins the x25 mark you need to hit for early retirement since you need way more than x25 of your yearly expenses. So the 4% rule is not sustainable if you haven't accounted for the 41% taxes.
Am I missing something or are my assumptions correct?

reeshau

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Re: UCITS ETFs and 41% tax
« Reply #1 on: August 24, 2018, 06:24:28 AM »
The 4% rule isn't really impacted, but yes you need to consider the money after taxes.  Thinking of the 4% rule as the 25x rule (its inverse) is likely easier to get tripped up by this.

That's why there is a tax topic here--taxes are important.  If one is diligent in the US, you can take taxes to 0%.  Of course, the relative opportunity varies widely on the country you are in, the country you are investing in, and how much money you need each year.

daverobev

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Re: UCITS ETFs and 41% tax
« Reply #2 on: August 24, 2018, 11:12:39 AM »
Country is important. Europe is not a country; there are vastly different taxation rules in each of the countries.