Capital Gains Tax

Capital gains tax is charged on the profit you make when you sell an asset: shares, crypto, real estate, a company. The gain is the difference between sale price and purchase price.

Rates differ sharply. Germany taxes share gains at 26,375 % flat, crypto after 1 year of holding not at all, real estate after 10 years not at all. Switzerland does not tax private capital gains on shares. Panama and Paraguay ignore foreign gains entirely.

For an investor, capital gains tax is the tax that residency changes the most. A move from Germany to a territorial system can turn a taxed portfolio into a tax-free one.

The catch is the exit. Germany's Exit Tax treats shareholdings of 1 % or more as sold on the day you leave, and several countries have similar deemed disposal rules. Move first, sell later works only if the exit was planned.

Timing matters too. Selling before the move, after the move, or in the gap between 2 residencies produces 3 different results.

Under Flag Theory 3.0 the asset flag is planned with the tax calendar in hand. Which of your assets to sell when, and where you should be resident at that moment, is a calculation we run before you set a departure date.