Tax liability for ETFs: What financial experts need to know now!

Tax liability for ETFs: What financial experts need to know now!

According to a report by www.agrarheute.com, savers who invest in ETFs will experience a tax change from 2024. Previously, only capital gains had to be taxed, while an advance flat rate was not collected due to the low interest rates. However, this will change from 2024, as the amount of the advance flat rate depends on the general interest rate level.

The introduction of the advance flat rate for ETFs can have the following effects: Firstly, investors who previously did not have to pay taxes on their ETF investments will have to pay taxes annually from 2024 due to the advance flat rate. Secondly, this can lead to investors rethinking their investment strategy and, if necessary, increasingly switching to other investment products.

In addition to the effects already mentioned, the introduction of the upfront flat rate could change the behavior of investors in the ETF market. Investors may tend to shift their investments more frequently to minimize potential tax burdens. This could increase fluctuations in the ETF market.

Overall, the introduction of the upfront flat rate could reduce the attractiveness of ETFs as a long-term form of investment, especially for private investors who have previously benefited from the tax simplicity of this asset class.