Panic with French Stamp Duty

Not really an expert when it comes to French taxes. That’s okay as long as the only link is the tiny tourist tax. However, if you’re involved in trading French over-the-counter stocks and derivatives – you should take the time to figure out what’s happening at the moment.

See, there is this stamp duty tax in France. Used to be capped at EUR 5000, and only applicable for transactions with the existence of a “written deed” (“acte“). Nothing will change for regular executed trades on an exchange. But as of January 1st 2012 the law has changed. The scope of the law has been widened, and the cap is removed.

OTC trades in French stocks or options could be affected by this law. Nobody knows. Everybody is puzzled and this creates panic among the French brokers. Some brokers halted OTC trading altogether until clarifications from the French Tax Authorities arrive. Understandable, with the Sarkozy government viewing the financial world as the root of all evil.

• PWC Landwell newsflash (pdf)