So, what will happen with the equity savings account? Is there any way that dividends received there from a non-tax treaty country could end up being treated as earned income?
According to Section 53 b of the Income Tax Act (TVL), returns on an equity savings account are considered taxable capital income at the time of withdrawal.
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Interesting observation. A surprising advantage of the equity savings account (OST).
The OST acts as a sort of “wash” for the income type: even if a dividend comes from a country with which Finland does not have a tax treaty (Monaco, Bermuda, Cayman, etc.), it never materializes as earned income. When you withdraw funds from an OST, Finland simply taxes it as capital gains — this is the standard taxation logic of the OST, regardless of which country the return originates from.
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US stock capital repayments paid as ROC (Return of Capital).
So there are these equity savings account (OST) “suitable” options among US stocks as well.
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It seems that practices vary.
Apparently, however, if they are paid into an equity savings account (os-tili) in full, no tax is charged until withdrawals are made.
This is at least how it works for IBKR on a book-entry account (ao-tili). No withholding tax has been levied on the ROC (Return of Capital). What happens with an equity savings account likely depends on your broker and that famous “sub-custodian.”
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