Are there tax-advantaged plans/accounts in Europe without age restriction?

Question

All the European countries I am familiar with have tax-advantaged pension schemes to guarantee income for retirees, but there's a severe age limitation (like with 401(k)), which is incompatible with my life plan.

I would like to know which is the friendliest country for an individual investor, and which advantages it offers. Given the heterogeneity of Europe I am hopeful there will be a country that stands out. Please, do mention other countries as well; my focus is on Europe, but I won't rule out any country in the world at this point.

For example, until last year in Spain, the first €1500 in dividends in a given year were tax free.

If the example is not clear enough: I'm not looking for the country that offers the best perks once I hit 60 years of age, but the one that allows to maximise investing performance of an individual investor in his mid twenties.

Answer 1

The UK has ISAs (Individual Savings Accounts), which let you invest up to £15,240 per year (for the current 2015/16 tax year). You don't get tax relief on your original investment, but all income and capital gains on the investments held in the ISA wrapper are tax-free. You have to be 16 year of age to open a cash ISA and 18 years of age for a Stocks and Shares ISA.

Answer 2

Canada introduced the Tax Free Savings Account (TFSA) in 2009.

Any Canadian resident age 18+ and having a valid Social Insurance Number (SIN) can establish a TFSA and contribute to it. After-tax contributions of up to $10,000/year are permitted. (The limit was $5,500/year, until just recently.) Unused contribution room carries forward, and withdrawals from the TFSA increase the contribution room by an equivalent amount the next calendar year; i.e. you get your contribution room back.

The TFSA's principal advantage is that account assets (which may include cash, marketable securities, etc.) can generate income free from any Canadian taxes, no matter whether the income arises from capital gains, dividends, interest, etc. Note that this "tax free" moniker isn't merely describing tax deferral — withdrawals remain non-taxable, too.

The TFSA is similar to the U.S. Roth IRA account type, but without tying the account to the concept of retirement. For a TFSA there is no minimum age for withdrawing funds, and so no early withdrawal penalties. All withdrawals from a TFSA are tax free. This makes a TFSA ideal not just for saving for retirement, but for emergency savings and other purposes.

Individuals also have access to the Registered Retirement Savings Plan (RRSP), similar to the U.S. Traditional IRA, where the contributor gets a tax deduction for contributions made during the year, and withdrawals are taxed as ordinary income. However, similar the TFSA, there is no minimum age for withdrawing funds, and no early withdrawal penalties. However, contribution room is not restored after a withdrawal, and contributions are no longer permitted after age 71 — the RRSP must then be converted to provide taxable income instead.

Canada also has a dividend tax credit (DTC) whereby an individual with income solely from eligible Canadian corporation dividends can earn a considerable amount per year without paying any income taxes at all. (The exact amount varies by province.)

Answer 3

You may have a look on Polish IKE & IKZE schemes. The disadvantage for you, as a foreigner, is that you can only benefit of them when you are a subject of Polish Personal Income Tax and that they are capped.

Not sure however if you need to be tax resident in Poland or withholding tax as per double taxation avoidance treaty would do.

Answer 4

KG & KGaA taxation in Switzerland

Here is the excerpt from

https://www.expatica.com/ch/finance/taxes/corporate-tax-in-switzerland-452226/

Corporate tax for sole traders, partnerships and limited partnerships

In Switzerland, sole proprietorships, partnerships, and limited partnerships aren’t taxed in the same way as corporations.

These kinds of companies are not considered legal entities, and therefore tax is applied to their private and business income, as well as private and business assets, as a whole.

Sole proprietors are responsible for reporting and paying tax on their private and business income – including profit, salary, interest, and income from elsewhere.

If you are a sole trader or partnership, you can offset expenses and losses against your income. However, you can’t deduct taxes paid from taxable profits on federal and canton taxes – something which has been possible for corporations.

This differs slightly for collective and limited partnerships, as each shareholder pays taxes on their share of the income and assets

Than, if you're not Swiss resident, the real taxation depends on your permanent residency state double taxation avoidance treaty which openly says what the withholding tax is and how is this income treated by your residency. Easy to check in your gov law journal.

My problem is that I could not find a knowledgeable and responsive advisor who would know in advance what I am asking for and answer on the spot. The few I contracted were not able to answer my rather simple simple questions. Their own research and learning is not what I would pay 300 CHF ph for.

Unfortunately my recent experience with tax advisors from the Netherlands is fairly similar.

Answer 5

Another countries with tax advantaged accounts are:

Sweden: ISK (Investingsparkskonto = Investment Savings Account)

France: PEA (Plan d'Epargne en Action or shared savings plan)

In addition to those, some countries in the EU have low or no Capital Gains Tax. Belgium has only a financial transaction tax and the Netherlands calculates them in a way that keeps CGT pretty low.

Ireland has a yearly CGT allowance as well.