Sari Lounasmere has a clear view of dividend companies suitable for a share savings account – A dividend tip worth money from a tax expert

How should you invest in a stock savings account? Among other things, this is discussed in this week’s Markkinaraati program.

Chairman of the Board of Directors of the Stock Savers Karri Strait considers that investing in a stock savings account could be an active trader. In that case, you would get the most out of the fact that you don’t have to pay taxes in between when doing business, Salmi thinks. Income from a share savings account is taxed only when money is withdrawn from the account.

“At the moment, I would look for turnaround companies. The Finnish stock market has fallen and valuations in many companies are very low,” says Salmi.

Among such companies, according to Salme, you can find companies whose price can double in a couple of years.

“But no, they are not necessarily such that you hang on to them for 30 years. In other words, taking advantage of such special situations requires active portfolio management,” says Salmi.

Dividends and tax considerations

CEO of the Stock Exchange Foundation Sari Lounasmeri on the other hand, is in favor of the dividend strategy.

“Calculated with a 30 percent capital gains tax and a five percent annual dividend yield, a share savings account would be better than a value share account after ten years,” Lounasmeri calculates.

For example, among public stocks, according to Lounasmere, there are several companies that distribute good dividends, such as from the financial sector Nordea and Sampofrom energy companies Fortum and operators Elisa.

“With regard to dividend companies, it’s best to put domestic ones in a share savings account, not foreign ones,” says Lounasmeri.

The reason is that dividends can be subject to withholding tax abroad in accordance with the country’s tax treaty.

Eva’s leading tax expert Emmilina Kujanpää notes that, on the other hand, tax treaties also enable cheating. In practice, it means that you choose foreign dividend stocks for your share savings account from countries from which you receive dividends free of withholding tax.

“In such a situation [ulkomaiset] dividend shares can also be a reasonable investment,” says Kujanpää.

Salmi points out that nowadays too much collected withholding tax can be claimed back with a share savings account.

“But in practice, they then come as withdrawals, i.e. as money, and you have to pay tax on them. So that doesn’t make a lot of sense either,” says Salmi.

“You claim the tax back and pay the tax for it,” summarizes Kujanpää.