Investment funds: what they are, how their taxation is managed


Investment funds are an instrument to save or capitalize the capital already saved that brings together several people who delegate their money in a team of professionals (managers) with knowledge of the various markets: stocks, fixed income, monetary assets, derivatives.

The taxation of investment funds

Investment funds, in Spain, basically traded by banks, are subject to the payment of taxes like any other savings instrument. At times when the profitability of public debt or bank deposits is very close to zero, it is time to know how much we are going to pay if we hire an investment fund.

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Keep in mind that you only have to pay taxes when you sell the investment fund . That is, the holder of a fund that retains this during, for example, 20 years, will have no obligation to the Tax Agency until the sale occurs. This is your main advantage.

Despite this premise, it must be borne in mind that the sale of the fund does not always have to be paid . In fact, you only have to pay taxes if you have obtained benefits . These benefits are called: capital gains , in the jargon of the financial sector.

What are the capital gains?

In this sense, the capital gains are calculated by subtracting the value of the refund (the money that we enter) the subscription value, the money that we invest when buying or investing in the fund. If we have had capital gains, we will pay. If, on the other hand, we suffer handicaps (we invest 100 and we have only recovered 90, for example), we have the consolation that the state will not take even one euro more.

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If we have purchased shares of a specific fund, but on different dates, the FIFO criterion will be applied (from English, First in, first out: First in, first out). That is, the first shares sold are those that were acquired first, regardless of the purchase price of the various acquisitions.

It must be borne in mind that all the fees charged for managing it (subscription, reimbursement, management, custody …) count as a deductible expense and must be subtracted from the capital invested.

How many taxes are paid according to the capital gains of investment funds?

The taxation of this financial instrument has undergone several changes in recent years. The reform in force, in force since January 2015, marks that the capital gains in investment funds are added to the tax base of savings . These are the sections and marginal rates established by the State for 2016 and, unless further modified, the following exercises:

  • Whoever wins up to a maximum of 6,000 euros , will pay 19% of their benefits . Example: if you have won (subtracting the subscription value from the refund value) 5,000 euros will pay 950.
  • Whoever wins from 6,000 euros to 50,000 euros , will pay 21% of their profits.
  • Whoever earns more than 50,000 euros , will pay 23% of their benefits .
  • Current legislation lowers goodwill compared to the previous one and ends with the difference between short-term (less than one year) and long-term capital gains .

Do you think that having investment funds will tax you or can it generate a tax advantage? Tell us your impression!