Tax residency

Also seen as: fiscal residency, country of residence

What does changing tax residency change?

Picking a residency re-seeds the whole tax card: the tax regime and each rate are set to the values that jurisdiction uses, and the fields the cascade touched are flagged with an "Auto-updated" badge so you can see what moved. The starting values are:

Residency also decides which of those fields you can still edit. Under Italy the long-term and dividend rates are read-only, with the hint "Set by Italian tax law for the selected regime." Under United States and Other all the rates are yours to set.

Does the holding period change the tax rate?

No — whether the holding period matters at all depends on your residency. Under United States rules both rates exist and the holding period decides between them: the app describes the two fields as applying to gains on positions "held less than the long-term threshold" and "held past the long-term threshold". Under Italy there is no short/long split: the app hides the short-term field entirely and a single rate applies to realized gains however long they were held. See capital-gains tax for how the rate is then applied to a gain.

Defaults in Fincanva

• The default residency follows your interface language: an English interface starts on United States, an Italian one on Italy. That is why one fresh account shows a 35%/20% short-and-long pair and another shows a single 26% rate.
• Every residency starts on the Declarative tax regime. Under Italy and Other you can switch it; under United States the regime field is not shown, because the distinction is an Italian one.
• Residency only affects results when the Taxes assumption is on. With Taxes off, no rate of any residency is applied.
• It is a saved setting, not a view toggle: changing it makes existing runs out of date, and the new rates apply after a strategy runs again.
• Dividends can also be reduced by withholding tax deducted at source, which Fincanva applies automatically and which has no rate field of its own.
• In earlier versions of the app this setting was also labelled "Country". That name now belongs only to the geographic filter used when selecting instruments, so the two are unrelated controls.

Worked example

The same strategy realizes a 5,000 gain on a briefly held position, and only the residency differs.

• United States — the hold is under the long-term threshold, so the gain is short-term and meets the 35% short-term rate: 1,750 of tax.
• Italy — there is no short/long distinction, so the single 26% rate applies whatever the hold was: 1,300 of tax.

Hold the same position past the long-term threshold and the US answer changes — the 20% long-term rate applies instead, so 1,000 — while the Italian answer does not move at all. The holding period is only a lever where the residency's rules make it one.

The figures on this page describe what Fincanva models, not what you should do with your money — see Is this financial advice?.