French Savers Can Now Buy Tax-Free Equity Europe-Wide

by Ulrika Lomas, Tax-News.com, Brussels

04 July 2001

Laurent Fabius, French Finance Minister, will today announce an extension to France's tax-free personal savings vehicles which for more than 20 years have allowed French savers to invest in shares listed on the Paris Bourse, and latterly also on the Nouveau Marche, France's second level, high-tech oriented exchange.

"Plans d'Epargne en Actions" are thought to contain more than Euros 90 billion of investments by more than 6 million savers. The principle is that investments in French companies up to a maximum of about Euros 90,000 can be deducted from taxable salary; this limit will be increased under the new rules to about Euros 120,000 in respect of Nouveau Marche stocks and some types of tax-privileged growth stocks.

The current rules have begun to seem quirky and restrictive in the light of the growing volume of cross-border trading, the number of French companies forming part of international groups which are not necessarily listed in France, and the loosening of national rules in other investment sectors.

French savers will now be able to invest in listed securities throughout the EU, giving them the same access to investments as are available to investment funds under the EU's UCITS Directive. This will open up a new and very attractive market for IPOs and other listed issues for corporate finance houses throughout the EU.

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