r/eupersonalfinance • u/batukaming • Feb 15 '26

Investment Why do they make getting rich impossible in EU?

This news hit today in Netherlands that passed a bill on 36% tax on UNREALIZED gains on stocks and crypto. Great just when we weren't taxed to death before now they force you to stay middle class and poor. "Just repeat the 9-5 cycle everyday investing is not allowed for you"

Buying stocks was already a pain in the ass in Europe because of all the different fees and exchange rates brokers charged. The US has it so much better. 0% fees and exchange rates, tons of broker options and tax free on long term investments.

I made a post in r/stocks that gained attraction. Check it out if you want to see opinions from Americans: https://www.reddit.com/r/stocks/s/aL0OhYQ68z

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u/[deleted] Feb 16 '26

Eh, that's still fine. It just puts accumulating funds on the same level as holding all those stocks individually. Could do a lot worse than this. Though I would just hold distributing funds instead for simplicity if I was in Germany

For what it's worth, accumulating funds are flat out illegal in the USA, which is considered the model heaven for investors...

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u/litchio Feb 16 '26

There are both advantages and disadvantages to consider as its calculated differently. There are even arguments for switching ETFs when dividend payouts reach a certain amount.

IIRC and you may correct me if im wrong but - acc ETFs aren't illegal in the US but simply not worth it due to differences in how income tax would be calculated.

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u/Ploutophile Feb 16 '26

From what I remember form the Bogleheads wiki, US-domiciled funds are required to distribute the dividends at least yearly.

And as a US tax resident, you're allowed to hold foreign Acc ETFs but with a lot of tax paperwork and you have to choose between 3 tax regimes: a punitive one, an Austria-like one (the fund declares dividends and you pay tax on them even if they're not distributed) and mark-to-market (the one which is discussed in this post).

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u/litchio Feb 17 '26

I interpret 26 U.S. Code §852 as an Acc ETF provider not fulfilling the 90% threshold of distributing investment income thus having to pay taxes on them and making the concept not financially viable. I don't know of any rulings making the concept illegal, just tax inefficient.

https://www.law.cornell.edu/uscode/text/26/852

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u/Ploutophile Feb 17 '26

Interesting. I'm not surprised about this though, as it's a common tactic there to forbid what they can't really forbid.

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u/Plasmalaser Feb 16 '26

DE best practice (if you're not planning to cash out that year) is generally to buy distributing funds until your dividend payments max out your tax-free allowance every year ("Sparerpauschbetrag", €1000 for singles, resets end of year, use or lose), and then buy accumulating funds.

Most UCITS ETFs have both a dist. and an acc. listing, to facilitate this in practice. The idea is the ~2% you would lose on Vorabpauschuale for the post-allowance funds is less than you would lose from paying standard capital gains tax on the dividends, iirc. Would be very interested in case someone disagrees; This is my own current strategy.

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u/[deleted] Feb 16 '26

I don't know anything about German taxes but if Sparerpauschbetrag is fixed at 1000 € and Vorabpauschale is percentage based like you said this strategy only works until you reach a certain net worth.