Invest your own funds safely
Currency exchange rate fluctuation, which directly affects the standard of living, forces everyone to think about how to protect their savings from depreciation.
Nowadays financial market offers several areas for investing money in order to earn profit and / or receive interests that will cover the part which is being lost every year “due to” inflation and currency fluctuation.
The main areas for money investment are:
Creating a bank deposit
Making investments in securities independently
Making investments in Institutes of Joint Investments (IJI)
Each option has its own advantages and disadvantages.
Before choosing the best one, everyone has to consider all the “pros” and “cons”. One can do it on their own or seek legal advice of specialists of Colares.
Since the main purpose of investing is to earn profit, any investor will primarily assess the risks that may adversely affect the amount of profit.
One of these important factors is taxes determined in the Tax Code of Ukraine.
Creating a bank deposit is the easiest way to slow down depreciation of personal money. The risk is minimal but despite the fact that banks offer from 12 to 16% per annum on deposits in local currency and 8-10% per annum on deposits in foreign currency, one should not expect to get large income.
Independent investing in securities independently requires from the investor not only having relevant experience and skill level, but also willingness to take risks and make decisions.
Attractiveness of investing in the mutual fund is that the money during the period of investment are not assessing.
Profit is taxable only when:
The investor sales securities of a mutual fund to a third party (the difference between the selling price and the purchase price is taxable);
Asset management company repurchases securities, which were issued by the mutual fund or asset management company, from the investor.
the mutual fund pays dividends, if it is provided by the prospectus of securities issue of a mutual fund (individual investor is to pay taxes from the income received in the form of dividends on securities of a mutual fund at rate of 5%).
Income received by individual investor is taxed at a rate of 5% provided the re-purchase (redemption) by mutual funds (asset management companies).
If the investor is a legal entity, whose income from the investment exceeds the expenses and is included into income for the taxable period since January 1, 2014 has to be taxed at a rate of 16%. One does not take into account funds raised from investors of mutual funds, income earned from operations with assets of such institutions and income earned from assets of the mentioned above institutions.
To summarize all mentioned above, we conclude that investing in mutual funds in comparison with independent investing in securities or real estate has true tax advantages.