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ART. 49. The annual transfer tax which is levied on French bearer stocks and bonds and on foreign nominative and bearer stocks and bonds, mentioned in article 31 of the law of March 29, 1914, is increased to fr. 0.50 per frs. 100, without addition of decimes.

The tax on the conversion of French nominative stocks and bonds into bearer instruments is fixed at frs. 2 per frs. 100, without the addition of decimes.

An executive order modifying article 47 of the decree of October 7, 1890, will determine the conditions of the negotiation and transfer of the nominative instruments mentioned above.

The owners of these instruments will have the power of using, if needed, a certificate of ownership in the conditions to be determined by the executive order referred to above.

ART. 50. The tax of 5 per cent established on the revenue of transferable securities by the laws of June 29, 1872, June 21, 1875, December 28, 1880, July 13, 1911, article 33 of the law of March 29, 1914, articles 11 and 12 of the law of December 30, 1916, and article 38 of the law of July 31, 1917, is fixed at frs. 10 per frs. 100.

The tax of 10 per cent established by article 5 of the law of June 21, 1875, article 20 of the law of February 25, 1901, and article 11 of the law of December 30, 1916, on the amounts paid to creditors, the bearers of obligations, stocks, and all other instruments of debt, is fixed at frs. 20 per frs. 100.

The tax of 6 per cent established by articles 31, 34, and 42 of the law of March 29, 1914, and article 11 of the law of December 30, 1916, on the income from foreign transferable securities which are not subject to the rules of subscription, as well as on the instruments of rents, loans, and other securities of foreign governments, is fixed at frs, 12 per frs, 100.

ARTICLE 18 OF THE FINANCE ACT OF JULY 1, 1923

Following the promulgation of the present law, the rate of the annual transfer tax which is now fixed at fr. 0.50 per cent by article 49 of the law of June 25, 1920, will be raised to fr. 0.60 per cent, without addition of decimes. This is levied upon French bearer stocks and bonds, as well as upon the foreign nominative and bearer instruments described in paragraph 2 of article 31 of the law of March 29, 1914.

The 1925 finance act is not yet voted. Advance information points to elevation of existing tax schedules, including possibly those on foreign securities. As drawn up last month by Mr. Clémentel, the French Finance Minister, it contains in article 85 the following recommendations for change in security taxation:

Article 14 of the law of June 5, 1850, subjected private securities to a proportional stamp tax which can be paid either in a lump sum or in annual installments. This cash payment was fixed by article 48 of the law of June 25, 1920, at 1 per cent of the face value of the securities for corporations capitalized for a period of not over 10 years and at 2 per cent for corporations to endure beyond that interval. If paid by annual installments, this tax was to be one-tenth of 1 per cent. These taxes were raised 20 per cent by virtue of. article 3 of the law of March 22, 1924.

In practice, corporations and firms putting out a further capital issue call on subscribers to pay in over and above the face value of the security a sum desigDated as the issue premium (prime d'emission). Inasmuch as the stamp tax is due only on the face value, this issue premium, which quite often is even greater than the face value of the stock, escapes all tax. It consequently calls for some alteration in the present tax system.

Experience has demonstrated that many corporations have used this means to increase their capital without having to pay any stamp tax. The alterations recommended by the Government provide that this issue premium will be taken into consideration when the amount of the stamp tax is calculated. The Gor. ernment recommendation is that subscriptions contracted for since January 1, 1919, shall be subject to an extra tax on the amount of the issue premium, to become effective the month following promulgation of this law. This measure is expected to net the treasury a return of at least 2,000,000 francs.

FRENCH TAX ON SALE OF SECURITIES

The basic law governing taxation of the sale of private securities is the fiscal act of June 25, 1920, which called for the payment of fr. 0.30 per frs. 1,000 or fraction thereof on all spot transactions and a tax of fr. 0.10 per frs. 1,000 or fraction thereof on future transactions. The text of this law, which constitutes article 46 of the fiscal act of June 25, 1920, is given below:

ART. 46. The stamp tax to which article 28 of the law of April 28, 1893, subjects every operation on the stock exchange having as its object the purchase and sale of securities of every kind, whether in spot (au comptant) or future (à terme) transactions, is fixed at 30 centimes (fr. 0.30) per frs. 1,000 or fraction of frs. 1,000 of the amount of the transaction.

On operations of “report” (arrangements whereby upon payment of a commission settlements of sales "à terme" are postponed to following liquidation periods) the tax is raised to 10 centimes (fr. 0.10) per frs. 1,000.

There is no change relative to operations in “ rentes" of the French Government. The tax is fixed at fr. 0.0125 per frs. 1,000 on spot or future transactions (au comptant ou à terme) and at fr. 0.00625 for “report” operations (see preceding paragraph for definition).

This régime was not modified until the fiscal act of March 23, 1924, which raised the taxation rates from 0.30 to 0.50 franc on spot transactions and from 0.10 to 0.20 franc on futures. The text of this article, which is No. 15 in the fiscal act of March 23, 1924, is given below:

Art. 15. The stamp tax to which article 28 of the law of April 28, 1893, subjects every stock exchange transaction having as its object the purchase and sale of securities of every kind is raised to 50 centimes (fr. 0.50) per frs. 1,000 or fraction of frs. 1,000.

The tax is levied on the amount of the transaction.

On “report” operations the tax is raised to 0.20 franc (20 centimes) per 1,000 francs or fraction of 1,000 francs. There is no change relative to the French Government rentes."

These payments are collected from the stock brokers on the basis of sales, a ledger record of which is required by the Government.

GERMANY

The German taxes upon the issue of stocks and bonds is based upon the par value, while the tax upon the transfer or sale of securities is based upon the market value in each case. At the time of the issue of stock a tax of 5 per cent of the par value must be paid. In the case of the issue of bonds the rate is 3 per cent. The tax on the subsequent sale is additional.

No-par-value stocks have been so rare in Germany that it has not been necessary to legislate concerning them. For tax purposes all new issues are given a par value.

Bonus shares given to holders of stock are taxed at 2 per cent of the market value.

STOCK EXCHANGE TURNOVER TAX

The President of the German Republic, in his efforts to reduce the general price level in Germany through tax reduction, promulgated on November 10, two emergency decrees, which diminished, among other taxes, the stock exchange turnover tax.

There was a general movement to reduce the stock exchange tax, which is listed as one of the subdivisions of the property transfer tax, on the ground that its existence greatly reduces the amount of business and prevents a liquid stock and bond market. It is said, however, that the fact that there are now three times as many brokers on the Berlin exchange than there were before the war has contributed equally to this condition.

On November 19, 1924, the German banks reduced their commission on sales of securities to 6 per cent per 1,000 and 3 per cent per 1,000 to private customers and other bankers, respectively. This action on the part of the banks stimulated the German Government to reduce also the rates of the stock exchange turnover tax.

The tax on the turnover of stocks is reduced as much as 60 per cent (from 1.5 to 0.6 per cent) for private customers and 50 per cent (from 0.4 to 0.2 per cent) for brokers. Distinctions between foreign, stable, and paper-mark bonds are abolished, whereby the calculation of the tax is considerably simplified.

for bonds and foreign credit instruments are given below:

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If the value of a security is 100 marks or less, one-tenth of the above rates is charged for each 10 reichsmarks or fraction thereof. The minimum amount is 10 reichspfennings. Higher amounts shall be rounded off to the next 10 reichspfennings.

The rates for stocks, priority rights to purchase new shares (Bezugsrechte), and founders shares (Genussscheine) are as follows: Transactions between brokers, 0.02 reichsmark for each 10 marks (previous rate, 0.04 mark); transactions between brokers and private customers, 0.06 mark (previous rate, 0.15); transactions between other individuals, 0.12 mark (previous rate, 0.30).

The minimum rate of the tax on shares in limited liability companies is 3 reichsmarks, otherwise 10 reichspfennings. Higher amounts are rounded off to the next full 10 reichspfennings. This latter decree went into effect on November 17, 1924.

The decreases are printed in Reichsgesetzblatt I, No. 67, of November 12, 1924, and Reichssteuerblatt No. 28, of November 13, 1924, respectively. The former decree is on file in the Bureau of Foreign and Domestic Commerce.

ent, while of industriaonsidered

In the proposed tax legislation now being considered by the German Reichstag, the tax on the issue of industrial bonds is reduced from 3 per cent to 2 per cent, while the tax on foreign stock is diminished from 5 per cent to 4 per cent, the rate imposed on domestic stocks.

The stock exchange turnover tax is also reduced, that on transactions between brokers and private individuals from 0.6 per cent to 0.3 per cent, and that on transactions between brokers from 0.2 per cent to 0.1 per cent. The tax on transactions between private individuals is abolished. . A reduction from 0.2 per cent to 0.1 per cent is also provided for in the tax on exchange.

When the proposed modifications of the tax laws are adopted the division of commercial laws will publish a complete report on German taxation.

NETHERLANDS

s. H. Cross, Commercial Attaché In the following extracts from the act of March 22, 1917 (State Journal, No. 244), regarding the levying of stamp duties, are those duties which pertain to the issue and sale of stocks and bonds. It will be noticed that the tax is based on the par value in the case of issue and on the actual value in the case of transfer. No special provisions are made as to no-par-value stock.

CHAPTER VIII.–Stamp duty on shares and bonds

ART. 60. On all shares and bonds issued in this country or abroad a stamp duty shall be levied amounting to: (a) 1 guilder for every 100 guilders, for premium loan certificates; (b) 80 cents for every 100 guilders of foreign stocks and bonds: for shares in foreign companies this duty will be increased to 1 guilder for every 100 guilders; (c) 60 cents for every 100 guilders for all other certificates, which, under whatsoever heading, may be classed among stocks and bonds or public funds, etc.

Foreign stocks and bonds are understood to be: (1) Those which are issued abroad and the scrip issued in this country pertaining to loans and debentures of foreign corporations, etc.; also certificates of shares or participation in corporations, limited companies, or societies which are established abroad ; and (2) the certificates, which are issued for stocks and bonds as referred to under (1), by “control bureaux" in this country.

The minimum duty shall be 10 cents and shall be increased by 10 cents up to 1 guilder, and above 1 guilder by 50 cents.

The duty shall be assessed according to the capital expressed in the certificate or indicated therein by the rate of interest or in some other manner. If no capital is mentioned in the certificate, 25 times the rate of interest held in prospect will be taken as such. If the capital or interest is only expressed in foreign currency, this will be converted into Dutch currency according to the prevailing rate of exchange on the Amsterdam Exchange. (NOTE.--At present the rate for all such conversions is taken at the nominal par value.) If the amount converted on this basis is between two of the stamp duties laid down in the third paragraph of this article, then the higher duty of the two shall be due. If neither capital nor rate of interest shall be expressed, and if the amount of capital or interest can not be ascertained, then a fixed duty of 1 guilder and 50 cents shall be due.

ART. 63 (third paragraph). Certificates not issued in this country must be provided with duty stamps within eight days after being received in this country, and before being issued, circulated, transferred, pledged or deposited as security or cover, redeemed, or converted here or before certificates are issued for same by the local “ control bureaux." Deposit for safe custody, if according to the agreement between the parties the return can only take place to the owner in person, his heirs or assigns, or his or their legal representative, shall not be considered as acceptance of receipt.

ART. 68. No stamp duty shall be due for stocks or bonds issued on behalf of the Government or its colonies; the coupons, dividend warrants, and talons belonging to the stocks and bonds referred to in paragraphs 60, 61, and 62, and for the provisional certificates of deposit.

ART. 69. Except when stipulated to the contrary, the stamp duty on the certificates mentioned in this chapter shall be payable, for certificates issued in this country, by the person issu ng these, and for certificates not issued in this country by the person who issues, puts into circulation, transfers, pledges, or deposits them as security, or who offers them for redemption or conversion.

CHAPTER IX

The account, whether signed or not, wherein a broker or other person who makes a business of handling and issuing stocks and bonds, ind cates the amount to be paid or to be received by the person for or on whose behalf the transaction referred to in the account took place, in the matter of purchase or sale of any stocks and bonds, regardless of whether the delivery took place or not, shall be subject to a duty of 5 cents for every 50 guilders.

The same duty shall be due on the account stating the amount allotted in case of an application on the occasion of an issue of stocks and bonds.

If the amount for which the duty shall be due is only expressed in foreign currency, then it shall be converted into Dutch currency according to the lastknown rate of exchange at Amsterdam on the day of beirg stamped.

The duty shall be due for the amount of every purchase, sale, or allotment; it shall amount to a maximum of 10 cents and increase by 5 cents up to 25 cents, above 25 cents by 25 cents up to 5 guilders, and above 5 guilders by 50 cents

The duty is paid by making use of adhesive stamps. Under stocks and bonds mentioned in this chapter shall be understood subscriptions to the national debt and all certificates of whatever description which can be classed under stocks and bonds or public funds.

ART. 87. The stamp duty of the account referred to in this chapter shall be payable by the person on whose behalf the transaction, mentioned in the account, has taken place.

(NOTE.- According to article 36-bis of the loan act of December 23, 1914 (State Journal, 612), amended by the act of January 20, 1917 (State Journal, 192), a surtax shall be levied on foreign stocks and bonds (as referred to ander (1) and (2) of article 60), in addition to the stamp duty levied or due, for the per od from January 1, 1917, to December 31, 1923, equal to a levy of 20 cents for every certificate, i. e., when the duty is 80 cents and 1 guilder, 3 and 20 cents, respectively.)

ITALY

H. C. MacLean, American Commercial Attaché Italy has three taxes collectible on the issue and sale of both Italian and foreign securities, one being a tax on the issue of securities based on the par value, another being an annual tax on securities in circulation based on the average price quoted on the stock exchange, and the third being a tax on contracts of purchase and sale of securities. There is also a special tax on the capital of foreign companies which is employed in operations in Italy. As no-par-value stock is not known in Italy, there is no provision regarding it in Italian legislation.

STAMP TAX ON SECURITY ISSUES All negotiable securities issued by Italian Provinces, communes, corporations, or other bodies, and all foreign securities, whether

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