| Form | Description | What Lightyear sends |
| 5.1 | Income and interest received in Estonia from which the income tax has been already deducted | Interest from uninvested funds (data from your income statement) |
| 8.1 | Dividends and interest received from securities registered abroad and where no tax has been withheld | Dividends, MMF distribution (data from your income statement) |
| 8.2 | Income from securities sold abroad where tax is not already withheld | Returns from selling shares (data from your capital gains statement) |
| 8.8 | Dividends and interest from securities registered abroad where tax is already withheld | US dividends (data from your income statement) |
Lightyear does not report your information automatically to the Estonian tax authority.
If you pay taxes in Estonia, you can say no to manual processes when declaring your annual taxes for returns received to your Lightyear personal account. If you wish, you can forward information about your income and capital gains in the Lightyear mobile app to the Estonian Tax and Customs Board (EMTA) system in a draft format, ready for you to review.
How can I send my data to EMTA?
- From your profile view, navigate to Settings → Tax → Send data to EMTA
- Choose the cost basis method for your profit and loss calculation (see more below)
- Log in to the EMTA portal and approve the information submitted. You must ensure that all submitted data is accurate and reflects your true financial situation. We kindly remind you that you are responsible for verifying the accuracy of the information before submitting it
Note that there may be a delay until the information shows in the EMTA portal. How to review if it has arrived: ensure you've chosen the corresponding declaration year in the left hand menu and then tap View.
5.1: we automatically withhold the tax from interest on uninvested funds and pass it on, even if you don't forward the rest of your income through our app
8.1: For ADRs tax is withheld at the source instrument, based on the local withholding rates of the underlying instrument. We do not have the withholding tax rate (which is why you see 0.00%) and pay the received net amount from our Brokerage partner into your Lightyear account. When submitting your tax report, you should consider if you need to move any ADR dividends to section 8.8. If unsure, consult with a local professional to determine the accurate applicable tax rate of the ADR dividend you received
8.8: US dividend tax withholding rate for Estonian residents is 15%
Average cost vs FIFO
You can choose the cost basis method between FIFO (First In First Out) and Average Cost. Both are accepted, but you will need to use the same one over multiple tax years. Please remember that Lightyear cannot give tax advice as it always depends on your personal circumstances and local tax laws, therefore we recommend checking with your local tax professional if you’re unsure which method to use. If you request to forward your data, we’ll send the same information to EMTA that you’ll see in the statements you can generate in the app.
Average Cost
This PnL accounting method takes the total cost of the shares and divides it by the number of shares in the fund.
FIFO
This PnL accounting method assumes that the most recently sold assets were purchased first; likewise, the remaining assets were purchased last.