Romanian Proprietatea Fund Core Hldrs Exempt From Capital Gains Tax

However, investors who bought the fund's shares on the "gray" market will pay a tax calculated on the difference between the buying price and the sale price, said Ionescu, general manager and president of Raiffeisen Capital&Investment, one of the companies that brokers the Proprietatea fund listing on the Bucharest bourse.

"Earnings are not taxable for shares gained after converting compensation deeds for former owners, but if one bought the stock before the fund's listing on the secondary market, they will pay a tax on profit," the official said.

Should an investor lose their sale documents, the transaction will be taxed at full value, as the purchase price will be considered zero by default.

"When an investor buys shares at 0.4 lei (EUR1=RON4.2669) and sells at RON1, they will pay a tax on the RON0.6 profit. But if this price cannot be proven, then they will be taxed on RON1," Ionescu explained.

Stock market earnings are taxed with 16% regardless of the stock possession interval.

The fund's listing on the Bucharest Stock Exchange is set for January 25. The fund will be listed directly, without an initial public offer.

Fondul Proprietatea is a closed-end investment fund created to compensate people whose property cannot be returned in kind after being abusively seized under the communist regime.

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