Hello all, I'm in need of some infos for my business plan... I'm a decently profitable trader, living in France. I'm increasingly feeling that I will never go back to a regular job. So I have to think about a long term plan. I have thought of every aspects of a long term plan but there are two recurring plagues that really hurt my plans. -0.6 percent tax per trade, even if the trade is a loser. -64 percent annual tax on profits (actually a bit less since I am not taxed on hardware/quote fees/internet access and everything mandatory for this business). With these tax issues, compounding a part of the gains is nearly impossible. So basically, I end up with profits similar to what I would earn as an employee. The situation being worse in fact since I have to put my own capital at risk, unlike an employee. My goal is to compound a part of the profits so that I have an exponentially growing business. Could you tell me about the taxes where you live ? (wherever that may be) Thanks for advance, C2 BTW, I have been reading this board for some weeks and I think it is really great, both great info and great people here IMO.
Welcome C2C, I can't believe the 62% tax on your profits! Man you need to get out of this socialist country. First do you have to pay the .6 % tax on transactions made on foreign markets? I would become a resident of another EU country some have better tax regimes than France, especially when it comes to capital gains.
How about becoming a pro and trade through a US company, such as Echo, Bright, LWS etc. I would seem you only had to pay taxes on your net-proceeds then. Good thread: http://www.elitetrader.com/vb/showthread.php?threadid=3098 Edit: Finally, I you really want to make money, find some way to get to the US. Taxes, labor law etc. makes is almost impossible to build wealth in most european countries by working, saving and investing.
Could you tell me about the taxes where you live ? (wherever that may be) U.S. taxes on income : federal tax rates on income vary from 15% to 39.1% depending on how much you earn state taxes 0 to 6% depending on state city or local tax around 1% social security , medicare taxes 7.5% (additional 7.5% paid by employer) federal unemployment taxes additional U.S taxes : property taxes -county and school per capita tax personal property taxes sales tax on purchases myriad of exise taxes - gas , phone service , cable, travel , etc. sin taxes- tobacco , alchohol , adult entertainment myriad of use taxes liscencing fees , tolls and assessments gift taxes luxury taxes customs taxes Then upon your death , if you've managed to accumulate substantial assets the government comes in and takes 55% of your estate . We also pay for our own health care .
for your informative replies and opinions. The more I learn on this tax topic, the more it seems that I will have to get out of the country sooner or later... Thanx, C2 Kicking : this 0.6% tax per trade is only taken on stocks when the amount of transaction is greater than 7000$. But here, the brokers are charging between 0.24% and 0.55% per order (0.48%-1.1% per trade) when the amount of transaction is lower than 7000$. So when the money is not taken by the state, it's taken by the broker... I found that the IB broker is offering 0.01 per share. I still have to check wether or not they allow these kinds of com for orders weighting less than 7000$. But in this case, it would be a great way to get rid of my current very high commissions
Forget about european brokers if you want to trade seriously. They are all browser based for what I know don't offer decent tools and have commission structures that give you a headache. Basically they seem to be like the US brokers back in 95. Uh you'll get 50 snapshot RT quotes per trade you make lol.
C2C, IB doesn't charge based on $ value like the brokers in Europe do. It is per share. Most other US brokers will do the same or charge a flat fee per trade. If you trade the states or other overseas markets I don't think you'll have to report any profits in france (check with a tax advisor for that). If you do, consider moving out of France. As a french ex-pat you would only have to pay taxes to the jurisdicton where you live and not France (I wish I could say the same about US ex-pats).
I'm in the process of switching a part of my volume through IB as a first step. Unfortunately the only way to avoid paying the French taxes is to be physically present in another country for more than 6 months a week. But it seems like it is definetly worth it C2
The tax rules in the US are great. Our taxes didn't seem so cheap until you mentioned your tax rates. Over here with a good accountant you are set and keep plenty of what you make. My firm is hiring right now and I could put you in touch with a couple of French guys you might want to talk to regarding our firm. Send me a message if you are interested.