1. Profit from capital repayment
Capital repayment generates taxable profit only if that repayment is more than the acquisition cost i.e., the purchase price of the share in question. Therefore, capital repayments seldom generate a taxable profit.
Lassila & Tikanoja performed a bonus issue on 18 November 2004, in which one old share could buy one new share without further payment. In terms of taxation, the shares received through the bonus issue without payment have no acquisition cost. The capital repayment for these shares generates a profit, which is calculated by deducting the deemed acquisition cost from the capital payment. The deemed acquisition cost is either 20 or 40 per cent of the amount of the capital repayment, depending on whether the subscriber had been, at the time of capital repayment, in possession of the shares for at least 10 years or under 10 years. Any profit is considered taxable capital income.
The profit is not considered taxable income if one receives capital repayments and sells shares, fund units, and other such assets to the value of no more than EUR 1,000 during one year.
The 2011, 2012 and 2013 capital repayment by Lassila & Tikanoja will not generate a taxable profit if you acquired your L&T shares on the stock exchange after the bonus issue of 2004.