EU Binary Options
The European Union (EU) had previously been a big market for binary options up until 2018 when sweeping changes hit the industry. EU financial markets regulator ESMA put in place “product intervention measures” effectively banning binary options in the EU.
Due to these changes, EU binary options traders are forced to look overseas when looking for a broker. Instead of doing business with a regulated EU or UK broker, they now have less protections with overseas brokers. However, there are some some decent offshore brokers accepting EU binary option traders.
EU Top Binary Brokers
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Depositing and Withdrawing
One of the challenges of dealing with overseas brokers is being able to deposit and withdraw cheaply and efficiently. While many overseas brokers will accept EU binary option traders, they often will not have suitable payment methods available.
Zentrader is one binary options broker that has invested in offering EU traders suitable deposit and withdrawal methods. EU traders can now deposit and withdraw in Euro (EUR) via local bank transfer and also credit cards.
Are Binary Options Legal in The EU?
Yes, EU residents are free to trade binary options. While the EU ESMA regulatory ban prohibits firms based in the EU offering binary options, there is no law prohibiting EU traders from dealing with an overseas firm.
EU Binary Option Taxes
WARNING: EU taxes are a complicated matter! We are only providing general commentary on this matter and recommend you seek personal advice from an expert.
Binary option brokers do not and are not responsible for withholding taxes. This is 100% responsibility of the trader.
The tax treatment of binary option profits will vary based upon which EU country your are resident is. In general, binary options are classified as financial instruments subject to either income or capital gains tax.
Binary options profits for UK residents MAY in some circumstances be tax free.
Binary options in the EU are regulated by ESMA.
ESMA currently has a “temporary” ban on binary options within the EU. Although the term temporary is used, it appears this is just the mechanism the regulator is using to implement their permanent ban.
As mentioned previously, this ban only applies to EU and UK firms offering binary options. If a EU citizen decides to deal with an overseas financial service provider, they are free to do so.