Just a heads up to you guys, that I received a call from the higher ups at Goldman this morning to tell us about the French "transaction tax" takes effect on trade date August 1st. This is a 20 BPS tax that will be withheld on the buy amount. For example, we have a trader who is up $5,000 trading TOT this year, but his transaction tax would have been $12,000. Eliminates this edge. Bummer. FYI, Don
Is it confirmed that ADRs will be affected? I see mixed information on that. Also note I have read that only net positions at end of day will be taxed, so buy 1000, sell 1000 in the same day avoids the tax (from what I've read).
According to Goldman, they will be withholding on all French ADR's, starting on trade date August 1st. 20BPS on cost of buy order. $44 (TOT) x 1,000 = $88 in transaction tax, for example. As always, check with your broker/dealer. List: http://topforeignstocks.com/foreign-adrs-list/the-full-list-of-french-adrs/ (For informational purposes only, not the product of Bright Trading or any of it's affiliates). Don
I am french and read the law entirely to be sure it won't affect me( the "HFT tax" part ). It's so imprecise that it's hard to believe there won't be some major problems at its inception. What I understand is that the security taxed must be issued by a french company with more than 1 B Euros in capital and that the trade must operate a transfer of property of the security. IMO CFDs which simply tracks french stocks won't be taxed. I don't know for ADRs.The property of the security won't be valid under french law if the tax isn't paid( like we care in the case of daytraders...???). It's also unclear who is supposed to collect the tax in some case. But I don't know where does the "untaxed if flat at night" part comes from. I haven't found one line in the law that would suggest that. They tax "all acquisitions" whether you keep positions at night or not.... Perhaps I missed something.
Untaxed I think. The securities taxed are "stocks and other securities giving access to the capital or vote rights in the company".
That's weird. OXFAM France cried all year long cause no derivatives were included... I don't if they consider CAC futures like a portfolio of taxed instruments, but if that's the case, the CAC futures will be history wednesday morning...The new rate is 0.2% LOL
The socialists will be coming after derivatives soon. Will be interesting to see volumes plummet. And watch CFD start popping up to be traded to avoid the tax.