Tax Loss Harvesting Calculator
Calculate your potential tax savings by offsetting capital losses against gains
TL;DR — Key Points
- ▸Capital losses can offset capital gains, reducing the tax you owe.
- ▸In Italy, losses carry forward up to 4 years (the "zainetto fiscale").
- ▸Italian ETF gains (redditi di capitale) CANNOT be offset by stock/bond losses.
- ▸Tax rates: Italy 26%, Germany 25%, France 30%, Spain 19%.
- ▸Use the calculator below to estimate your exact tax savings.
Tax loss harvesting is the practice of selling investments at a loss to offset taxable capital gains, reducing the tax you owe. In most European countries, capital losses can be carried forward for several years and used to cancel out future gains — potentially saving you hundreds or thousands of euros in taxes.
What Is Tax Loss Harvesting?
When you sell a security at a price lower than what you paid, you realise a capital loss. In most European tax systems, these losses can be offset against capital gains realised in the same year or carried forward to future years. This mechanism — often called "zainetto fiscale" in Italy — allows investors to strategically time their sales to reduce their overall tax burden.
How Does It Work in Practice?
Suppose you have €3,000 in accumulated losses from selling shares at a loss last year, and this year you plan to sell a position with a €5,000 capital gain. Without harvesting, you would pay tax on the full €5,000. By using your losses to offset the gain, you only pay tax on €2,000 — saving €780 at a 26% rate (the Italian standard rate for capital gains on stocks and bonds).
Tax Rates by Country
Capital gains tax rates vary significantly across Europe: Italy applies 26% on stocks, bonds and most financial instruments (with the important ETF exception described below). Germany charges 25% (Abgeltungsteuer) plus solidarity surcharge. France applies the Prélèvement Forfaitaire Unique (PFU) of 30%. Spain uses a progressive rate of 19%–28% depending on the gain amount — this calculator uses the base 19% rate for simplicity.
Calculate Your Tax Savings
Total losses not yet offset
Gains you plan to realize this year
How soon do your oldest losses expire?
Results
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⚠️ Important note for Italian investors
ETF gains (redditi di capitale) CANNOT offset stock/bond losses (redditi diversi) in Italy under the dichiarativo regime.
Only gains from stocks, bonds, and other redditi diversi can be offset by accumulated losses. ETF capital gains are categorized separately and are not eligible for this offset.
Frequently Asked Questions
What is tax loss harvesting?
Tax loss harvesting is the practice of selling investments at a loss to offset taxable capital gains, reducing the tax you owe. The losses "harvest" a tax benefit that would otherwise be lost. In most European countries, losses can be carried forward for several years.
How long can I carry forward capital losses in Italy?
In Italy, capital losses (minusvalenze) can be carried forward for 4 calendar years from the year they are realised. Losses generated in 2022 expire on 31 December 2026. The oldest losses are always offset first.
Why can't ETF gains offset stock losses in Italy?
Italian tax law divides investment income into two separate categories: "redditi di capitale" (capital income, which includes ETF gains and dividends) and "redditi diversi" (miscellaneous income, which includes gains from stocks, bonds, ETNs and certificates). Only gains and losses within the same category can be offset. ETF gains are redditi di capitale and cannot offset stock/bond losses, which are redditi diversi.
Is tax loss harvesting legal?
Yes, it is entirely legal. It is a standard tax planning strategy explicitly recognised by tax authorities across Europe. You are simply timing the realisation of losses to offset gains — there is no evasion or avoidance involved.
What is the wash-sale rule and does it apply in Europe?
The wash-sale rule (USA) disallows a loss deduction if you repurchase a substantially identical security within 30 days. Most European countries, including Italy, Germany and France, do not have an equivalent rule — you can sell at a loss and immediately repurchase the same security.
Which instruments generate losses I can use to offset gains in Italy?
Only instruments classified as redditi diversi generate losses usable for offset: individual stocks, bonds (capital gain from sale, not coupons), ETNs (Exchange Traded Notes) and investment certificates. ETF losses are also redditi diversi and can offset ETF gains, but they cannot cross categories.
Can DonkyCapital track my tax position automatically?
Yes. DonkyCapital tracks realised gains, losses and the remaining balance of your zainetto fiscale across all connected brokers, letting you plan harvesting decisions before losses expire.
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