If you have chosen to invest on any P2P platform, like Hive5, you will definitely enjoy easy tools and attractive returns. However, investors must not forget the other part of every investment - taxation requirements. We want to remind you of the importance of understanding taxation in European countries. For this reason, our team has checked different sources on personal finance accounting and wants to share the basic information.
Investment Taxation in France
In France, investment income, including interest from P2P lending, is subject to a flat tax rate of 30%, known as the Prélèvement Forfaitaire Unique (PFU). This rate comprises:
- 12.8% income tax
- 17.2% social contributions
However, if favourable, taxpayers can be taxed on such income under regular progressive rates.
Key Considerations for French Investors:
- Declaration: Interest earned from platforms like Hive5 must be declared in your annual tax return. The report should be typically filed by the 31st of May each year.
- Tax options: Assess whether the flat or progressive rates are more advantageous based on your overall income.
- Social contributions: These apply regardless of the chosen tax rate.
Investment Taxation in Spain
In Spain, investment income, such as interest from P2P platforms, is taxed at progressive rates:
- 19% for income up to €6,000
- 21% for income between €6,001 and €50,000
- 23% for income between €50,001 and €200,000
- 27% for income above €200,000
Key Considerations for Spanish Investors:
- Reporting: Interest from Hive5 should be included in the savings income (Base Imponible del Ahorro) section of your tax return. The report should be typically filed by June 30 each year.
- Withholding tax: While domestic investments may have withholding taxes, foreign P2P earnings typically require manual declaration.
- Wealth tax: Spain imposes a wealth tax on residents with assets exceeding certain thresholds.
Taxation Across Other EU Countries
Taxation of P2P lending varies across Europe:
- Portugal: interest income is generally taxed at a flat rate of 28%. However, taxpayers may include such income in their overall income, subjecting it to progressive tax rates. The report should typically be filed by June 30 each year.
- Netherlands: Investment income is taxed based on a deemed return system, with rates varying depending on the total value of assets. The report should typically be filed before May 1 each year.
- Germany: Interest income is taxed at a flat rate of 26.38%, which includes a solidarity surcharge. The report should typically be filed by July 31 each year.
- Italy: Interest income is subject to a 26% tax rate. The report should typically be filed by June 30 each year.
- Lithuania: Interest income is taxed at 15%, with specific exemptions for long-term investments. The report should typically be filed by May 1 each year.
Given the diversity in tax regulations, consulting a local tax advisor is advisable to ensure compliance.
Accessing Your Hive5 Account Statement for Tax Reporting
Hive5 provides detailed account statements to make your tax report easier. Here's how to access your tax report:
- Sign in to your Hive5 account.
- Navigate to the "Settings" section.
- Click on "Account settings" and choose "Tax report".
- Select your desired date range.
- Wait up to 2 minutes for the data to generate.
- Download it as a PDF file.
The document includes the data of interest you received during your selected period.
For any additional information or assistance, please get in touch with our customer support team: support@hive5.co
Disclaimer: Consult Your Tax Advisor
Understanding the tax implications of your investments is essential for effective financial planning.
This information is advisory; we recommend consulting multiple sources and tax advisors in your country.
Sources:
https://www.statista.com/statistics/412400/europe-alternative-finance-transaction-value-p2p-lending/
https://taxfoundation.org/data/all/eu/net-wealth-tax-europe-2023/
https://taxsummaries.pwc.com/spain/individual/income-determination
