If you invest via a margin account (at Interactive Brokers, Degiro or another broker), you may have paid debit interest. One question comes up a lot: can you deduct it from your taxes?
The short answer: no.
In France, this interest is treated as loan interest. It’s not deductible, even if you choose the progressive tax scale for income tax instead of the flat tax.
This means you can’t deduct it:
From your credit interest (if your broker pays interest on your cash).
From your capital gains on the stock market.
From your dividends.
A broker lending you money (what happens with a margin account) isn’t treated for tax purposes like a securities loan.
The tax authorities (via the BOFiP) are clear: the interest on a loan taken out by an individual to buy shares is not deductible in individual taxation. It’s not considered as “acquisition costs” or “custody costs” (unlike custody fees for example).
Using margin therefore has a “net” cost. You have to pay all your taxes on your gross gains, without being able to subtract the interest the broker charged you to lend you this cash.
