Taxation of options and derivatives in Finland

General information, not tax advice. Verify your own situation or consult a professional.

Option results are capital income

Profit from options trading is taxed in Finland as capital income, just like a share sale gain. The rate is 30% on capital income up to 30,000 euros per year and 34% on the part above that. The same treatment applies to single-stock options, index options and other exchange-listed standardized derivatives. What is taxed is not turnover but the realized net result: received minus paid, fees included.

Written vs bought option — who pays, who receives the premium

Every option has two sides. When you buy an option you pay the premium and gain a right; when you write (sell) an option you receive the premium and take on an obligation.

• Bought option: the premium paid is an acquisition cost that is realized for tax only when the option is sold, exercised or expires.
• Written (sold) option: the premium received is income, but its final treatment depends on what happens to the option.

Three outcomes: expiry, closing, assignment

An option position always ends in one of three ways, and the taxable result follows from it:

• Expires worthless: the writer keeps the whole premium, which is fully taxable capital-income profit. The premium the buyer paid is a fully deductible loss.
• Closed before expiry: you buy back the option you wrote, or sell the option you bought. Result = premium received − premium paid ± fees.
• Assigned / exercised: the option is not taxed as a separate event; instead the premium adjusts the acquisition or sale price of the underlying. A written put is assigned → you buy the shares and the premium lowers their acquisition cost. A written call (covered call) is assigned → you sell the shares and the premium is added to the sale price. A bought call is exercised → the premium paid adds to the shares acquisition cost.

Standardized derivatives: no deemed acquisition cost

This is the most important — and most often forgotten — difference from plain share trades. When you sell shares you may deduct either your actual acquisition cost or the statutory deemed acquisition cost (20% or 40% of the sale price). For standardized derivative contracts — exchange-listed options and futures — the deemed cost does not apply. A derivative is always taxed on its actual realized result, i.e. the difference between premiums received and paid plus fees. The same derivative nature applies to futures. The deemed cost returns only if an option is assigned and you receive shares as the underlying: a later sale of those shares can again use the deemed cost normally.

Convert to euros at the trade-date ECB rate

Interactive Brokers options are usually quoted in dollars. Every premium, trading fee and exercise is converted to euros at the ECB reference rate on the trade date. Because the opening and closing trades often fall on different days at different rates, the FX movement itself also affects the final euro result. Done by hand this is laborious and error-prone once you have dozens of legs.

Worked example: a cash-secured put

You write (sell) one put option, strike 50 USD, and receive a premium of 2 USD per share, i.e. 200 USD (one contract = 100 shares).

• Scenario A — the option expires: the stock stays above 50 dollars and the option expires worthless. You keep the full 200 USD premium. Converted to euros at a trade-date rate of 1.10, that is about 181.82 EUR of taxable capital-income profit. At 30% the tax is about 54.55 EUR.
• Scenario B — the option is assigned: the stock falls below 50 dollars, you are assigned and buy 100 shares at 50 USD, i.e. 5,000 USD. The 200 USD premium lowers the acquisition cost: your effective cost is 4,800 USD, or 48 USD per share. The premium is not taxed separately here — its effect is realized only when you later sell the shares.

Losses are deductible

A loss from options is a deductible capital loss that can be offset against capital income. A bought option that expires worthless produces a full loss equal to the premium paid, and a closed position loss is the difference between the premiums. See more on deducting a capital loss — allocating losses correctly can reduce your tax noticeably.

How PnlTrack does it for you

• Imports IB options automatically and identifies bought and written legs
• Calculates premiums and fees and allocates them correctly: expiry, closing and assignment
• On assignment, adjusts the underlying acquisition or sale price automatically (assignment basis)
• Computes per-leg PnL by strategy — covered calls, cash-secured puts and spreads
• Converts every item to euros at the correct trade-date ECB rate
• Uses the actual result for derivatives, never the deemed cost — and produces ready figures for your IB tax report

At a glance you see how much taxable profit or deductible loss each strategy leaves behind.

General information, not tax advice. Verify your own situation or consult a professional.