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11. Stock & ETF profit and fees examples

Example Stock​

Suppose you bought ten shares of "Amazon.com Inc." (AMZN) five years ago and sold them today. Let's break down the details:

Why does "Amazon.com Inc." not pay dividends?​

Unlike other stocks, "Amazon.com Inc." does not pay dividends to Investors but reinvests profits into the company for further growth. Not to confuse with compounding, where the profits are reinvested into the same share to generate additional returns over time. This is common among many high-growth technology companies like Uber. In contrast, Apple pays a 0.53% dividend

With these factors in mind, let's calculate the outcome.

Buying the Stocks in April 2019​

  1. Initial Purchase: You bought ten Amazon stocks at $90 each in April 2019, totaling $900.
  2. Brokerage Fee: Saxo charges a minimum brokerage fee of $1 or 0,08% for NASDAQ-traded stocks. As 0,08% of $900 is $0,72, you'll pay the minimum fee of $1.
  3. Foreign Exchange Fee:
    • Converting the total of $900 (purchase) + $1 (fee) to DKK, considering the exchange rate of 1 USD = 6,65 DKK in April 2019, the total cost in DKK would be $901 x 6,95 DKK/USD = 5.991 DKK.
    • Since you're investing from a DKK account into a foreign currency stock (USD in this case), there's a 0,25% foreign exchange fee. 0,25% of 5.991 DKK = 14,97 DKK rounded up to 15 DKK.
  4. Total Initial Costs in DKK: Total cost of buying ten stocks: 5.991 DKK (price + brokerage) + 15 DKK (FX fee) = 6.006 DKK.

Selling the Stocks in April 2024​

  1. Selling the stocks: In April 2024, you sold your ten shares of Amazon at $170 per share, totalling $1.700.
  2. Brokerage Fee: 0,08% of $1.700 is $1,36, which is greater than $1. So, you pay $1,36 as the brokerage fee.
  3. Foreign Exchange Fee:
    • Convert the total sale amount to DKK using the exchange rate of April 2024: ($1.700 + $1,36) x 6,95 DKK/USD = 11.823 DKK.
    • You'll again incur a 0,25% foreign exchange fee when converting USD to DKK. 0,25% of 11.823 DKK = 29,54 DKK rounded up to 30 DKK.
  4. Total Selling Costs in DKK: Total sale amount in DKK = 11.815 DKK (sale + brokerage fee) + 30 DKK (FX fee) = 11.853 DKK.

Taxes​

From 6. Taxes, we learned that profits from stocks up to 61.000 DKK (in 2024) are taxed at 27% and only when sold (Realisation Principle). Saxo automatically reports this to Skat.dk, meaning you will only be taxed once. So, next due date, you'll have to pay 27% of your 11.823 DKK (sale) - 5.991 DKK (purchase) = 5832 DKK in profit, meaning 1574.6 DKK in taxes around March the following year 2025.

Verdict​

You spent $1 (purchase brokerage fee) + $1,36 (sale brokerage fee) + 15 DKK (purchase FX fee) + 30 DKK (sale FX fee) ≈ 61 DKK in fees. Meanwhile, you made 11.823 DKK (sale) - 5.991 DKK (purchase) - 1.574.6 DKK (taxes) = 4257,4 DKK in net profit from the stocks.

Example ETF​

"iShares Core S&P 500" is one of many tradable ETFs that track the S&P 500 index. This ETF is traded on various exchange markets and thus is sold different currencies, but more on that later.

Suppose you bought ten shares of "iShares Core S&P 500 Accumulating" five years ago on the Frankfurt Stock Exchange (XETRA Germany), and sold them today. Let's break down the details:

With these factors in mind, let's calculate the outcome.

Buying the ETFs in April 2019​

  1. Initial Purchase: You bought ten shares of iShares Core S&P 500 (ACC) at €258 each in April 2019, totalling €2.580.
  2. Brokerage Fee: Saxo charges a minimum brokerage fee of €3 or 0,08% for XETRA-traded stocks. As 0,08% of €2.580 is $2,01, you'll pay the minimum fee of €3.
  3. Foreign Exchange Fee:
    • Converting the total of €2.580 (purchase) + €3 (fee) to DKK, considering the exchange rate of 1 EUR = 7,47 DKK in April 2019, the total cost in DKK would be €2.583 x 7,47 DKK/EUR = 19.295 DKK.
    • Since you're investing from a DKK account into a foreign currency stock (EUR in this case), there's a 0,25% foreign exchange fee. 0,25% of 19.295 DKK = 48,24 DKK rounded up to 49 DKK.
  4. Total Initial Costs in DKK: Total cost of buying ten stocks: 19.295 DKK (price + brokerage) + 49 DKK (FX fee) = 19.344 DKK.

Selling the ETFs in April 2024​

  1. Selling the stocks: In April 2024, you sold your ten shares of iShares Core S&P 500 (ACC) at €500 per share, totalling €5.000.
  2. Brokerage Fee: 0,08% of €5.000 is €4, which is greater than €3. So, you pay €4 as the brokerage fee.
  3. Foreign Exchange Fee:
    • Convert the total sale amount to DKK using the exchange rate of April 2024: (€5.000 + €4) x 7,46 DKK/EUR = 37.330 DKK.
    • You'll again incur a 0,25% foreign exchange fee when converting EUR to DKK. 0,25% of 37.330 DKK = 93,33 DKK rounded up to 94 DKK.
  4. Total Selling Costs in DKK: Total sale amount in DKK = 37.330 DKK (sale + brokerage fee) + 94 DKK (FX fee) = 37.424 DKK.

Taxes​

From 6. Taxes, we learned that profits from ETFs on SKAT's positive lists are taxed following "Aktieindkomst" and thus profits up to 61.000 DKK (in 2024) are taxed at 27%. Saxo automatically reports this to Skat.dk. Unlike shares, ETF's are taxed following the "Lagerprincipet", meaning you are taxed once a year on the profit of the ETF. With the ETF's having a consistent profit increase year on year of 14.11%, you would have paid each year, around March, in taxes:

YEARVALUEPROFITNEW VALUE (DKK)TAX (27%)
119.295 DKK19.295 DKK x 0,1411 = 2.722,5 DKK22.017,5 DKK735 DKK
222.017,5 DKK21.926,8 DKK x 0,1411 = 3.106,7 DKK25.124,2 DKK839 DKK
325.124,2 DKK24.917,6 DKK x 0,1411 = 3.545 DKK28.669,2 DKK957 DKK
428.669,2 DKK28.316,3 DKK x 0,1411 = 4.045,2 DKK32.714,4 DKK1.092 DKK
532.714,4 DKK19.295 DKK x 0,1411 = 4.616 DKK37.330 DKK1.246 DKK
Data:

In total that amounts to 4.869 DKK in taxes.

You can get to the same result by simply applying 27% to the total profit, e.g. (37.330 DKK (sale) - 19.295 DKK (purchase)) x 0.27 = 4.869 DKK.

Note​

If this investment was made using an Aktiesparekonto, you would have needed to add the tax amount in cash to your ASK balance if no cash is available. This is because ASK taxes are paid directly from the account. Saxo notifies their clients about outstanding ASK tax amounts with a grace period of 30 days.

Management fees​

We haven't factored in any ETF management fees in our calculations yet. The 0,07% management fee is charged on a daily basis but expressed as an annual percentage. This means the management fee translates to a daily deduction of 0,7% / 365 days = 0,00191% from the ETFs total value. To simplify, we'll assess the maximum management fee you'd have to pay each year by taking the ETF value at the end of each year:

  • Year 1: 22,017.5 DKK × 0.0007 = 15.4 DKK per year.
  • Year 2: 25,124.2 DKK × 0.0007 = 17.6 DKK per year.
  • Year 3: 28,669.2 DKK × 0.0007 = 20 DKK per year.
  • Year 4: 32,714.4 DKK × 0.0007 = 22.9 DKK per year.
  • Year 5: 37,330 DKK × 0.0007 = 26.1 DKK per year.

That is a maximum total management fee of 102 DKK.

Since the fees occur daily, the tax and profit calculations are slightly off, but acceptable for simplification reasons.

Verdict​

You spent €3 (purchase brokerage fee) + €4 (sale brokerage fee) + 49 DKK (purchase FX fee) + 94 DKK (sale FX fee) + 102 DKK ≈ 297 DKK in fees. Meanwhile, you made 37.330 DKK (sale) - 19.295 DKK (purchase) - 4.869 DKK (taxes) ≈ 13.166 DKK in profit from the stocks.