Investors' tax obligations

According to the provisions laid down in the Romanian Fiscal Code, gains/ losses on fund share redemptions are determined for tax purposes.

(i) As of 01.01.2023, tax rates on individual gains from investment funds are set at 1% or 3%, considering the relevant fund shareholding periods for redemptions performed after 01.01.2023, as follows:

• The 1% tax is determined and withheld against gains from fund shares purchased and redeemed in a period longer than or equal to 365 days from the relevant purchase date;
  
  
• The 3% tax is determined and withheld against gains from fund shares purchased and redeemed in a period shorter than 365 days from the relevant purchase date.

(ii) Investors receive information regarding their gains/losses from fund share redemptions by way of their Portfolio Statements. The Portfolio Statement is a legal document mandatorily issued to all investors who have redeemed fund shares throughout the year. Portfolio Statements are sent by e-mail or post*.

(iii) As of 01.01.2023, S.A.I. Erste Asset Management S.A. withholds taxes from the redemption of fund shares.

(iv) In order to determine taxable gains, tax value is determined by the weighted average price (WAP) method which also considers all the costs associated with the relevant transfers/operations, regardless of the holding periods.

WAP refers to the average purchase price of a fund share determined by adding up all the investments made (i.e. the issue price, including all transfer/operation costs, multiplied by the number of fund shares subscribed) and dividing the sum with the number of shares held, regardless of the holding period.

(v) Losses from transactions with unit funds of open-end investment funds managed by S.A.I. Erste Asset Management S.A. will not be carried forward or offset, since they are deemed final losses for the investors.

(vi) When the investors are residents of countries other than Romania, for the avoidance of tax withholding, (original) Certificates of Tax Residence will be submitted, as issued by the relevant countries of residence. Certificates of Tax Residence are issued by countries which concluded double taxation avoidance agreements with Romania.

The redemption price is the price payable to investors as of the date when the Redemption Request Form is submitted and comprises the net asset value per share as determined by S.A.I. Erste Asset Management S.A. and certified by the Depositary (Banca Comercială Română S.A.), taking into account the assets in the relevant portfolio on the day when the Redemption Request Form was submitted less the redemption fee, if any. The shares held by any investor in an investment fund will be redeemed on a F.I.F.O. (First in, First out) basis, in line with the rules concerning the determination, withholding and transfer of taxes on capital gains from securities transfers by individuals.

(vii) When fund units redemptions result in gains, individual investors will have to submit a Global Tax Return Document (Declarația Unică 212) for the reporting and payment of healthcare insurance contributions (CASS) no later than 27 May 2024 (for the tax year 2023), but only if the amount of the gains exceed 6 gross minimum salaries (18.000 RON)**.

Please be aware that S.A.I. Erste Asset Management S.A. is not authorised to provide tax advice. Please contact the representatives of the National Agency for Fiscal Administration (ANAF) or a tax advisor for information on your personal tax status or any additional questions you may have.

* S.A.I. Erste Asset Management S.A. will not be held liable for changes not notified by investors, for instance changes in e-mail or home/correspondence addresses. 

** For the year 2023, you will have to report not only your investment revenues (such as revenue from interests, dividends, securities transfers, etc.) but also other sources of income, for instance: rents, freelance revenues, intellectual property rights, agriculture, forestry and fishery revenues, etc., from Romania and abroad, according to the type of the income source. Please contact the representatives of the National Agency for Fiscal Administration (ANAF) or a tax advisor for questions regarding your Global Tax Return Document, as S.A.I. Erste Asset Management S.A. is not authorised to provide tax advice.