Early Retirement Extreme Forums

The increase in the lower tax bracket for equity income is fantastic, though!

I don't have high hopes for the lower tax bracket change going through, but let's cross our fingers. I could perhaps see a new 35% bracket in the DKK 50k - 100k range, but this is of course all speculative.

With respect to the "aktiesparekonto", I agree that those are valid concerns for buy and hold investors. The fact that the tax is applied annually has a quite significant effect in the long run. Under the current system, it is even possible to construct scenarios where it is more advantageous to hold equities in "frie midler" versus "aldersopsparing" due to the yearly taxation.

If anything, the "aktiesparekonto" as proposed promotes speculation, as one is incentivized to take high risk. It would be fantastic to have the same model as Sweden has implemented, though.

cbroenning wrote: ↑

Thu Sep 07, 2017 3:59 am

The increase in the lower tax bracket for equity income is fantastic, though!

But that would be 'a tax break for all the rich people' so what are the odds that's going to pass? Don't you think it's just a tool for negotiation? I mean, it sounds way too good to be true to raise the high tax bracket like that, so it's definitely not true.

Shame that the increase in the lower tax bracket for equity income did not go through, although I didn't expect it to.

Looks like the final taxation model for the "aktiesparekonto" was changed such that it's now taxed according to the "lagerbeskatning" principle at 17% annually. I agree with cbroenning that for buy and hold investors, it doesn't appear that attractive.

On another note, the taxation of equity-based ETF's was changed from "kapitalindkomst" to "aktieindkomst". While a welcome change, for now the principle of "lagerbeskatning" is maintained, which is a bit of a bummer.

Actually thats a major bummer.

Once youre FI, what can you use your approx 45K personal deduction for?
IIRC you could use it for deductions for lagerbeskatning on ETF and for the high-percentage taxation of equity income.
Unless you have rentals, wages, or a shit-load of interest bearing investments you're not making use of a major tax deduction.

Overall, the less investments that can go into personal deduction, the harder it'll be to avoid paying most of your income in taxes.
What am I missing?

Well, if you have a working spouse, you can let her use it ...

Looks like the tax cuts ended up being fairly modest.

I wonder how much more advantageous it will now be to contribute to "Ratepension" and "Livrente" with the added deductions.