TAX-SMART
INVESTING
local tax regulations to maximize your after-tax profit.
The hardest thing in the world to understand is the income tax.
Only the after-tax profit matters
We always keep in mind various ways to lower your taxes. Each country has different income tax laws, and we try to utilize them to provide each client with an optimal investment strategy that maximises their after-tax return. These strategies may vary country by country. In some CEE countries, we even use strategies that allow our clients to pay zero taxes on their achieved profits.
This information applies to tax residents of the Slovak Republic. The tax regime depends on each client's individual circumstances and may change in the future.
We utilize all available
tax reliefs
Time test
Most CEE countries reward individual investors for long-term investing. That is, if you hold the index ETFs in your portfolio for a certain period, your capital gains tax might be completely waived or significantly reduced.
Non-taxable minimum
We use this tax relief when clients wish to make early withdrawals or when their capital gains are below the thresholds defined in the tax codes. In this respect, if your net investment profits are low, they might be tax exempt.
Lower tax rates
Each country has its specific income tax rates for capital gains and dividends. We carefully analyze these rates and, based on our findings, select index funds for our clients. These funds either distribute dividends or reinvest them entirely, allowing our clients to avoid paying taxes on dividends.
We seize every opportunity to lower your taxes
When constructing portfolios
We have a long-term investment strategy, favouring ETFs over individual equities due to their lower volatility resulting from mirroring the entire market. Our investment choices are guided by whether distributing or accumulating ETFs offer superior tax incentives.
When you request a withdrawal
If you decide to withdraw funds, we will warn you about potential tax consequences and attempt to advise you on how to reduce your tax liability or even avoid paying any tax at all.
When rebalancing
Regular portfolio rebalancing serves to mitigate risks and increase returns. During the rebalancing process, we meticulously consider any potential tax consequences.
How do taxes affect your performance?
Compare a 10 000 € investment made over the past 10 years in popular equity mutual funds in Slovakia with the Finax 100% equity portfolio:
Equity mutual fund
Average annual yield: 2.51%
Finax
Average annual yield: 6.96% p.a.
