Functioning and taxes for investment instruments: degiro, XTB, Zonky and others

What are digital investment tools and what are they for?

In recent years, the interest of Czechs in investing has been growing. This demand has been met by a diverse range of digital investment tools – online services that allow you to invest your money in various types of assets, such as stocks, bonds, funds, loans, real estate or cryptocurrencies. Their main aim is to make investing more accessible to the general public. Thanks to digitisation, automation and an intuitive interface, it is possible to start investing in minutes, often with a very low minimum investment.

These instruments differ in their nature and focus. Some (e.g. DEGIRO, XTB, eToro) act as brokers – i.e. providers of access to the stock exchange. Others (e.g. Fondee, Portu, Indigo) offer automated investment services, so-called robo-advisors, where an algorithm suggests a portfolio based on a questionnaire. There are also services aimed at investing in loans – either to people (Zonky, Bondster) or companies (Fingood), or property projects (Investown).

The common denominator of all these services is their easy accessibility, digital environment, low upfront capital and the possibility to choose different investment strategies. In this article, we will look at how each platform works, who they are suitable for, their advantages, disadvantages, fees, level of risk and what is important from a tax perspective.

Glossary of basic terms

When it comes to investing, you’ll often come across terms that can be confusing or unclear at first – especially if you’re just starting out. So let’s take a look at a brief, easy-to-understand explanation of the basic investment tools and terms you’re likely to encounter as an investor:

Investment portfolio

An investment portfolio is a collection of different assets in which an investor has invested their money – for example, stocks, bonds, ETFs, real estate or loans. The goal of constructing a portfolio is to spread risk and achieve the highest possible return given the investor’s goals and risk tolerance. Investment platforms often offer automated, tailored portfolio creation that is diversified by region, sector and asset type.

Shares

A share is a security that represents a share of the share capital of a public company. By purchasing it, the investor becomes a shareholder – i.e. a co-owner of the company – and has the right to participate in the company’s profits (e.g. through dividends), vote at the general meeting or benefit from the increase in the share’s value on the stock market. Shares are liquid – they can be sold on the stock exchange at any time – and form the basis of many investment strategies, especially for long-term investors.

ETFs (Exchange Traded Funds)

ETFs (Exchange Traded Funds) are investment funds that are traded on an exchange just like stocks. They usually replicate the performance of a particular index (e.g. S&P 500, MSCI World) or sector (e.g. technology, energy), allowing investors to diversify their portfolio easily and cheaply. ETFs have the advantage of low management fees, high liquidity and transparency. ETFs tend to be the basis of the offerings of automated platforms such as Fondee, Portu or Indigo, but they can also be purchased through brokers such as DEGIRO or XTB.

CFD (Contract for Difference)

CFDs, or contracts for difference, are derivative investment instruments that allow you to speculate on the rise or fall in the price of an asset (such as shares, indices, currencies or commodities) without actually owning it. The profit or loss arises from the difference between the bid and ask prices. CFDs use leverage, which increases the potential returns and risks. They are suitable for more experienced investors and are commonly offered by platforms such as XTB or eToro.

Fractional Shares

Fractional shares are fractional shares of one whole share that allow investors to buy even expensive securities in smaller increments – for example, 0.1 shares of Apple. This allows an investor to invest exactly as much money as they have available, regardless of the current price of the entire share. Fractional shares make it easier to diversify a portfolio and make investing more accessible even with small capital. They are offered by some online platforms, such as XTB or eToro. In the Czech Republic, the tax treatment of fractional shares is not yet clearly regulated.

Cryptocurrencies

Cryptocurrencies are digital currencies based on blockchain technology, which provides decentralised and secure record-keeping of transactions. Bitcoin is the best known cryptocurrency, but there are thousands of others (e.g. Ethereum, Cardano, Solana). Cryptocurrencies allow fast and global transfers without the need for a bank as an intermediary. They are highly volatile, which means that their value can fluctuate significantly in a short period of time. Investing in cryptocurrencies is risky and more suitable for more experienced investors. For example, platforms such as eToro or XTB offer them.

Fondee

Fondee is a Czech online platform designed for those who want to invest simply, without having to follow the markets or pick individual stocks. Its main advantage is its fully automated approach – after filling out a short investment questionnaire, the platform will design a tailored portfolio that matches your risk profile, investment horizon and goals.

Investments can be made from as little as CZK 1,000 and the whole process is online. Customers can open up to 5 different portfolios at the same time – for example, for different goals such as retirement, housing or children’s education. Fondee relies on passive investing through exchange-traded funds (ETFs), which are known for their low costs and broad diversification.

A special feature of Fondee is the possibility of choosing sustainable (ESG) portfolios, i.e. those made up of ETFs with a high ESG rating – assessing the impact on the environment (E), society (S) and corporate governance (G). These portfolios target not only returns but also investments in line with responsible investment values.

Fondee is regulated by the Czech National Bank and client funds are protected by the Securities Dealers Guarantee Fund. Thanks to its simple operation and low fees (1% per year), Fondee is ideal especially for novice investors who want to entrust investment management to professionals and spend their time on other things.

As for the risks, these are in line with the nature of ETFs – the value of an investment can fluctuate in the short term depending on market developments. Over the long term, however, ETFs are considered a relatively stable investment instrument with a balanced risk/reward ratio.

Investments through Fondee are made through ETF funds and are therefore subject to the rules for taxation of income from the sale of securities.

Fondee: taxes and tax returns

Investing can be quite complex from a tax perspective, especially for beginners. The Fondee platform recognises this and tries to make the process easier for its clients. Although it does not handle the tax obligations for the investor, it offers summaries to help navigate the rules and manage the tax return without stress.

An essential tool is the annual tax statement that Fondee automatically prepares for each client. This document includes:

• the sum of all dividends received from ETFs, converted into Czech crowns at the uniform exchange rate,
• a summary of all sales of securities (e.g. when rebalancing the portfolio),
• the pairing of purchases and sales according to the FIFO method,
• calculation of income and expenses (e.g. purchase prices of ETFs),
• and a final calculation of the taxable gain if the conditions for tax exemption are not met.

This allows the necessary data to be easily transcribed into the tax return. In addition, the statement is adapted to Czech legislation and also takes into account foreign currency conversions.

To help clients understand when and if they need to file their tax return, Fondee also offers a tax questionnaire.

Degiro

Degiro is a Dutch online broker that is one of the largest and most popular investment platforms in Europe. Unlike automated services such as Fondee, Degiro targets active investors who want to be in control of their portfolio and select individual stocks, ETFs, bonds or other instruments themselves.

The platform offers access to dozens of global exchanges and allows you to invest in a wide range of assets, including European and US ETFs. The advantage is a clear interface and low trading costs.

Degiro is ideal for more experienced investors who want to take an active approach to portfolio management. It is not a robo-advisor or a platform that offers investment recommendations – the responsibility for asset selection lies entirely with the investor. This increases freedom on the one hand, but requires more knowledge and time on the other.

Degiro is regulated by the Dutch AFM (Autoriteit Financiële Markten). Client funds are kept separate from the broker’s assets, which increases security in the event of company problems.

Degiro: taxes and tax returns

From a tax perspective, it should be taken into account that Degiro does not provide Czech tax statements, so the investor has to deal with taxation on sales and dividends from Degiro himself. The proceeds from dividends and sales of securities must be included in the tax return, including currency conversion at the exchange rate published by the GFD. This makes the platform more suitable for investors who can handle their taxes on their own or with the help of a tax advisor.

Port

Portu is a Czech investment platform providing investments in globally diversified portfolios consisting mainly of ETF funds. The service is particularly suitable for novice investors.

The basic service of Portu consists in the creation of a portfolio based on an investment questionnaire that determines the investor’s risk profile. The portfolios are managed by a team of investment professionals who make strategic decisions, including rebalancing and possible currency hedging (only for accounts in CZK). The selection of investment instruments is based on low-cost ETFs with high liquidity.

In addition to the core portfolios, Portu also offers thematic packages, the possibility to build your own portfolio of ETFs or stocks, an “investment reserve” service (with low volatility and partial cash interest) and now , which focuses on commercial real estate.

The port is operated under a CNB license and is backed by the . Client deposits are held in segregated accounts and protected by the Securities Traders Guarantee Fund.

Portu: taxes and tax returns

Proceeds from investments through Portu are subject to the standard rules for taxation of income from the sale of securities. Portu does not file tax returns on behalf of clients or provide individual tax advice. However, at the beginning of each calendar year, Portu issues tax statements and tax return documents.

XTB

XTB is an international brokerage platform that allows trading in a wide range of investment instruments – from traditional stocks and ETFs to derivatives such as CFDs (contract for difference). The platform is particularly suitable for more experienced investors who want to trade actively and use a wider range of instruments, including leverage.

A big attraction of XTB is its fee-free trading of stocks and ETFs – it does not charge any fees for buying or selling these instruments up to EUR 100,000 per month. Above this threshold, fees are in the low single-digit percentages. Liquidity is very high, with purchases and sales taking place immediately.

The XTB platform is regulated in several countries, and in the Czech Republic it is subject to supervision by the Czech National Bank (CNB). This means that its activities in the Czech Republic are in compliance with Czech legislation and that it must comply with requirements for the protection of client funds, transparency and regular reporting. The trading platform is technically very advanced, offering analytical tools, educational content and client support in Czech.

The biggest risks come from trading CFDs and other leveraged products, which can lead to quick and significant losses. Therefore, this type of trading is more suitable for investors who are experienced and understand the risks arising from volatility and leverage.

XTB: taxes and tax returns

XTB provides its clients with a ” Fiscal Report” – a summary document with information on trading gains and losses for the previous fiscal year. This serves as a basis for filing a tax return, but is not a substitute for tax advice.

While XTB provides the statements, it is not responsible for the accuracy of the tax calculation – the client must resolve the tax obligations on their own or with the help of a tax advisor. In particular, the tax treatment of fractional shares is not clearly regulated in the Czech Republic, so consultation with a professional is recommended.

eToro

eToro is a global investment platform that has gained popularity thanks to its ability to replicate the strategies of experienced traders. Users can invest in stocks, ETFs, cryptocurrencies, currencies and CFDs. This social dimension makes the platform particularly attractive to younger and tech-savvy investors who are looking for inspiration or want to share their investments with others.

Trading shares on eToro is free of charge, while CFDs and cryptocurrencies are loaded with a spread – the difference between the buy and sell price. The platform offers high liquidity and an intuitive interface available in English.

eToro is regulated by several institutions – notably the Cypriot regulator CySEC and the UK’s FCA.

The risk level varies significantly depending on what the user invests in. While classic stocks or ETFs are considered relatively stable, CFDs and cryptocurrencies carry high volatility and risk of loss.

eToro: taxes and tax returns

In terms of taxes and tax returns, it must be taken into account that eToro does not provide tax reports for the Czech Republic. Investors must therefore keep records of transactions and returns independently and prepare their own tax documents.

Zonky (Benxy)

Zonky, now also known as Benxy, is one of the best known Czech P2P (peer-to-peer) platforms focused on consumer lending. Investors here lend money directly to people who apply for financing through the platform – for example, for a car, home or loan consolidation. But Zonky no longer offers the ability to manually invest in specific people; instead, it has a system called a rentier that automatically allocates your investment to different consumer loans through an algorithm, creating a diversified portfolio.

Zonky then takes care of the complete management of these debts – tracking the repayment of each loan, contacting borrowers when they default and initiating the collection process when necessary.

Borrowers must first go through a multi-step approval process. This includes identity and income verification, a check of credit registers, an assessment using internal risk models and, in selected cases, an individual assessment by a credit specialist. The aim is to lend to reliable clients with a good payment history and to minimise the risk of default.

Withdrawal of funds is possible at any time and without additional fees, but liquidity depends on how borrowers repay their loans – so the full amount cannot be guaranteed to be immediately available.

The platform is regulated by the Czech National Bank and owned by Air bank.

Zonky: taxes and tax returns

Income earned by an investor through Zonky Renter is considered capital income. Specifically, it is interest on loans on which the investor has acquired a receivable. The entire gross interest income, i.e. the amount credited to the investor for the period , is taxable. Zonky issues a certificate of interest income received each year, usually in January or February. Zonky does not provide tax or accounting advice.

Investown

Investown is a Czech platform that connects retail investors with development projects in the form of P2P loans. Users have the opportunity to invest in specific real estate projects – typically short-term financing for construction, renovation or buyouts.

The main advantage of Investown is the low entry limit – it is possible to invest from as little as CZK 500, which makes real estate investments accessible to people without much capital. The platform itself states that it thoroughly screens projects, but real estate guarantees should always be carefully evaluated.

Investown does not charge any entry or account management fees. Withdrawing funds from the Investown wallet is free, but only once in a 24-hour period – any further withdrawals within that timeframe incur a fee.

Liquidity is lower. If an investor decides to exit an investment early, they can offer it for sale to other users of the platform. In this case, a fee of 0.9% of the amount sold is charged. However, the sale may take several months.

Investown is supervised by the Czech National Bank, but as a P2P platform it is not subject to the same regime as licensed securities dealers.

Taxation of investments on the Investown platform is not subject to property tax. It is other income and income from capital assets. For tax purposes, only income is counted, not expenses. Investments through Investown are not subject to the time test for tax exemption (unlike, for example, selling securities after 3 years).

Investown provides an income statement that serves as the basis for the tax return. Investown does not provide tax advice, so if you are unsure, consultation with a tax advisor is recommended.

Summary

Investment platforms such as DEGIRO, XTB, eToro, Fondee, Portu, Zonky and Investown have made investing accessible to the general public – online, easily and often with low upfront capital. They allow investments in stocks, ETFs, cryptocurrencies, loans or real estate and vary in the degree of automation, the tools offered, the riskiness and suitability for beginners or advanced investors.

DEGIRO and XTB target active investors who want to be in control of their portfolio and are willing to monitor the markets and deal with taxes themselves. eToro adds a social dimension and the ability to copy other traders’ strategies. In contrast, Fondee and Portu offer passive investing through ETFs with a minimum of fuss – ideal for those who want to delegate management to professionals.

Zonky and Investown represent an alternative approach where investors fund consumer loans or real estate projects. The returns here can be interesting, but liquidity is lower and returns depend on borrower repayments or real estate market developments.

All platforms have their specificities and risks. In addition to returns and fees, it is important to consider tax obligations, which investors often have to deal with themselves – some platforms provide statements and reports, others do not. Choosing the right service therefore depends on your experience, goals and willingness to look at investment management in more detail.