Capital Gains Tax by Country: Where Investors Pay Less

Capital gains tax (CGT) is levied on the profit from selling assets like stocks, property, crypto, and businesses. It's one of the most variable taxes globally ??from 0% in many countries to over 40% in others. For investors and traders, CGT rates can significantly impact portfolio returns over time due to compounding effects. A 20% CGT on annual trading profits effectively reduces your compound growth rate.

These countries impose no capital gains tax on most investments, making them ideal for active investors and traders.

Countries that tax capital gains but at favorable rates: Bulgaria (10%), Romania (10%), Czech Republic (15% but exempt after 3 years for securities), Croatia (10% but exempt after 2 years), Rwanda (5%), Panama (5-10%), and Taiwan (0.3% securities transaction tax instead of CGT). The holding period exemptions in Czech Republic and Croatia are particularly valuable for long-term investors.

Countries where investors face the steepest CGT: Denmark (42% for gains over DKK 61,000), Finland (30-34%), Ireland (33%), France (30% flat tax), UK (20% + potential surcharges), USA (20% federal + 3.8% NIIT + state), Japan (20.315%), and Australia (up to 22.5% for long-term). These high-CGT countries often drive investors to consider relocating or using tax-deferred structures.

1. Relocate before selling: Move to a zero-CGT country before realizing large gains. Must be genuine relocation.
2. Hold for minimum periods: Many countries exempt gains after holding periods (Czech 3 years, Croatia 2 years, Portugal used to exempt after 1 year).
3. Tax-loss harvesting: Offset gains with realized losses in the same tax year.
4. Step-up in basis: Some countries reset cost basis on becoming a resident, potentially eliminating gains accrued before arrival.
5. Qualified small business stock: US QSBS exclusion can exempt up to $10M in startup gains.
6. Retirement accounts: Many countries offer tax-deferred or tax-free investment within pension structures.