Investment account

• In order to invest, you need a securities account. To simplify investment activities, it is also worth using an investment account.
• An investment account in Swedbank is free of charge. It is a usual bank account, but intended for making financial investments.
• Investment account allows you to defer your income tax liability if you acquire financial assets for the money in the investment account and the return gained from financial assets is immediately transferred to this account.
• You can hold any currency in the investment account and use it to perform transactions as well. One person may have an unlimited number of investment accounts.

• This is a good opportunity given to the Estonian people, meaning that they do not have to pay income tax immediately on every euro earned as a profit.
• This will give the larger amount a chance to grow, since you can re-invest all profit earned in the meantime without paying income tax.
• You can keep your daily and investment transactions separate, making it easier to declare your investment activities later. If you used your daily bank account to invest, you would have to report a lot more transactions in your income tax return.
• In addition, when the income declaration deadline approaches, you can conveniently submit the data to the Estonian Tax and Customs Board by using Swedbank’s investment account report.

1. Open a new bank account via the Internet Bank and name it ‘Investment Account’. This makes the accounts easily distinguishable from each other. Please inform us about this via a bank message.
2. Then open a securities account via the Internet Bank. If you already have such an account, you can skip this step.
3. The investment account and the securities account must be linked, as transactions cannot be made without a securities account. If you already have a securities account, send us a bank message to link it to your investment account.

• To defer income tax liability, use the money in your investment account for securities transactions. If you plan to re-invest the investment return in financial assets, it is reasonable to use an investment account.
• You can deposit and withdraw money from the investment account at any time.
• You must list all deposits and withdrawals made to this account on your tax return – this can easily be done via aninvestment account report. Income tax liability only arises if you withdraw more money than you have deposited.

When declaring investment activity, please remember that:

• the tax return must reflect all deposits and withdrawals made with regard to the account. If there were no transactions during the year, you must also indicate this;
• deferral of tax liability is allowed only if transactions in financial assets are made from the investment account. To learn about financial assets, please refer to § 17¹ of the Income Tax Act;
• the obligation to pay income tax arises only when more money is withdrawn from the investment account than has been deposited;
• there are several nuances to what transactions can be deposits and withdrawals. Find out more about this in § 17² of the Income Tax Act or ask directly from the Tax and Customs Board.