Dear Community,
A while ago @DividendCop published an article about the withholding tax by French shares. Thereby some queries came to the point 3 of the "direct registered shares".
1. what is currently the problem of German investors?
Dividend payments from groups in our neighboring country are subject to a flat 28% withholding tax. The French tax authorities justify this with the uncertainty about the tax domicile of the investor.
2. what are the solutions?
As is known, there is an agreement between Germany and France. It is therefore possible to reduce the withholding tax to approx. 12.8%.
This works on the one hand via the service of the DKB, which goes in advance, but of course gets the money back itself via a tax equalization.
Consors also offers this service for about €19.95 per income payment.
Another option is offered by the refund forms 5000DE and 5001DE, which are, however, subject to personal appeal to the French tax authorities. A refund thus requires proof of tax residency in Germany.
Now we come to the 3rd possibility of registering French shares, which is the primary topic of this article.
The initial situation:
Here we must distinguish the following points in particular.
- In free trade, we find French bearer shares.
- Registration converts these bearer shares into registered shares.
- In Germany, registration has so far been possible almost exclusively via Consors, as a subsidiary of BNP, and even then it has usually been offered to selected persons. Chosen ones are here really lengthy holders of the positions, which are to receive a Benefit. Meanwhile this costs 24,95€.
- Please weigh therefore whether this is worthwhile at all.
- Further possibilities can be found in capital participation campaigns of the groups. Usually, however, these are not published.
- Registered shares are not tradable without further ado. There are obligations for a holding period of x years in the case of registration.
- Registered shares are not held in the owner's own custody account, but in a custody account administered by the corporation itself or by a third party commissioned by the issuer to do so.
- After this holding period, the owner can dispose of them freely. He can therefore also order a sale or transfer shares to his own securities account. Please bear in mind that this requires conversion into bearer shares again and leads to fees.
- A sale of the registered shares can only be executed on the Paris Stock Exchange "Euronext". The holder merely orders a sale. The timing of the execution is incumbent upon the agent in a proportionate period of time.
Situation:
Let us now assume that registration is to be sought. How does such a thing proceed?
A field report:
My portfolio currently includes 3 corporations in which I own registered shares. Arkema $AKE (-0,43%) , TotalEnergies $TTE (-0,16%) and Air Liquide $AI (+0,64%) .
There was a request for personal data by means of a form and confirmation of tax residency in Germany. (Indication of your tax ID and for confirmation a wage slip with tax deduction is usually also accepted). Otherwise, you must also calculate here for a confirmed tax information again about 20-30 €.
Of course, this depends on the costs of your local tax office.
After a thorough check by the finance department of the respective company, you will receive a notice about the issuance confirmation. Only a short time later you will probably receive a letter with the access data to the securities account from BNP Paribas $BNP (+2,19%) or CA $ACA (-0,3%) will be sent to you. Both make up a significant part of the business world in French everyday life.
These founded from themselves the platform "Uptevia", which is a spin-off of the corperate trust services of both banks.
The link to the platform, as well as your ID, access number and password will be sent to you in separate letters.
You will also receive separate access for each group. Therefore, please keep these documents safe.
Now I have received registered shares, and now what?
Nothing more. I now see my received shares, which are blocked. Now I have to wait until the holding period expires. In the meantime, you can still enjoy the incoming dividend payments on your reference account, which only enjoy a discount of 12.8%. Please note, however, that you will have to declare these dividends on your tax return, as you may have to pay additional capital gains tax. You will receive the respective documents via PDF from this very portal on 01.01 over the past year.
But why should this be worthwhile?
Different companies offer different benefits for registered share holders.
For years, L'Oreal $OR (-0,17%) for example, has been offering an annual dividend premium of 10% on its dividend. The same applies to Air Liquide.
Valneva $VLA (+4,06%) offers double voting rights. It is therefore up to the Group itself to decide on the respective benefits.
But please only decide for it if there is a realistic financial advantage!
