APPENDIX E
SOME NOTES CONCERNING THE POSITION OF COM-
PANIES WHOSE SECURITIES ARE DEALT IN IN FRANCE
IN THE MATTERS OF TAXATION AND STOCK EXCHANGE
REGULATIONS.
A. TAXATION
Prior to the passing of the Law of 31st July, 1929, it was
necessary for a foreign company to enter into an arrangement
‘known as the ABONNEMENT) regarding the payment of taxes
before any financial service might be done for it or before its
shares (which would be in the form of share warrants to bearer)
might be dealt in (except in an unofficial manner) in France.

The Law of 31st July, 1929, repealed this requirement; but
the French Administration insists that the new provision does
not release companies who had already entered into abonnements
from their undertaking, which was irrevocable for the whole
period of the Company’s existence in the case of shares, and until
final redemption in the case of debentures, etc.

Notwithstanding the legal irrevocability of their undertaking,
companies who were unwilling to continue bearing the burden
of taxation to which the abomnement subjected them withdrew
themselves from the reach of the taxing authorities by terminating
the appointment of their Responsible Representatives.

The foreign companies whose shares are dealt in in France
thus fall into three categories, namely:

Those whose shares are abonné.
Those whose shares are désabonné.
Those whose shares are non-abonné.
1. ABONNE SHARES.
The abonmement is an undertaking to pay certain annual
taxes, namely:
1. The Stamp Duty (Droit de Timbre) of Fr. 0.20 per Frs. 100
upon the nominal value of the security, payable in equal
quarterly instalments. The rate in the case of abonne-
ments entered into after 31st December. 1920. is Fr. 0.05
per Frs. 100.

Note.—When it has been proved to the Fisc that a
company’s accounts have shown a debit balance on profit
and loss account for three years in succession, the company
is entitled to ask for a refund of the stamp duty paid for
the third year, and to be allowed to discontinue paying
stamp duty for successive years so long as the profit and
lacs account continues to show a debit balance.
126A