Taxes on investments

Most countries have separate tax rates for investment income. Some (esp. low-tax countries like Romania) have a flat rate, others distinguish short-term and long-term gains (ex: US, Georgia). In some countries, only a portion of the investment income is taxed (ex: 50% of capital gains in Canada) and certain deductions and/or tax credits apply. Yet in others, investment income is taxed as ordinary income (ex: Estonia) and may even be subject to socials (ex: Hungary, Romania).

The tax treatment will usually depend on:

  1. Type of investment income
  2. Type of account you hold your investment in

Types of investment income

NOTE: there are taxable benefits like health/life insurance, private pension, and annuity where funds are also invested.

In general, capital gains are taxed the least:

Dividends are usually taxed higher than capital gains:

Interest income is usually the least tax-efficient:

Types of investment accounts

Margin account is a standard taxable account. It's best suited for:

Registered accounts are specialized tax-advantaged accounts. They work best for:


IANAFA. This is not financial or tax advice. Do your own research and/or consult a licensed professional.