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Its not clear to me from a tax perspective (or other) which stock exchange I should buy from. For example; stock X may be available to buy on NDQ, FRA, or XET.

What are the criteria for deciding from which exchange to buy from, being resident in Germany?

Thanks!

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Pretty sure there no difference tax wise which exchange you buy from, as far as I am aware. There are tax differences between mutual funds and ETFs but that is a whole other kettle of fish.

As for other ways you could compare. You could think about things such as:

Listing criteria; what criteria is necessary for a company to be able to be listed on that exchange, giving one an idea of how big a company would have to be to be listed.

Trading frequency; how many trades per day are made via that exchange, giving an idea of how much liquidity there is, although one should also take into account the following.

Average order size; how large are the trades which are made, lots of trades doesn't necessarily mean more liquidity for large orders, and vice versa, less large trades.

Real life exchange floor; though these have lost importance or necessity these days.

Focus of the exchange; different exchanges may have different asset classes they prefer.

Although due to regulation, and competition, larger exchanges are usually pretty similar so it likely won't make much difference, may be important with a smaller exchange that you don't recognise.

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  • These criteria have nothing to do with achieving the best price and certainly nothing to do with taxation. – Bob Baerker Apr 25 '20 at 17:28
  • OP said "(or other)", I said, "little difference tax wise which exchange you buy from, as far as I am aware", though if you are aware of some way that it does, please enlighten us. – LAM Apr 25 '20 at 17:42
  • Please enlighten us. How are the Listing Criteria applicable to taxation? How is Trading Frequency applicable to taxation? How is the existence of a real life Exchange Floor applicable to taxation? How is the focus of the exchange applicable to taxation? How is the average order size applicable to taxation? How are the listing criteria applicable to taxation? How is the size of the exchange applicable to taxation? Other than liquidity at desired price, how are any of these applicable to getting the best price for order execution. – Bob Baerker Apr 25 '20 at 18:16
  • Just covered this, it said "from a tax perspective (or other)". Additionally, there is little difference in what exchange you buy from as to what the price of the stock will be, that is decided by the market. I was just answering the question regarding how you could compare stock exchanges. – LAM Apr 25 '20 at 18:20
  • If there is a difference tax wise between exchanges I would be interested to learn, as I said, "as far as I am aware". Thought it might be helpful to share what I do know. – LAM Apr 25 '20 at 18:26
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Its not clear to me from a tax perspective (or other) from which stock exchange should I buy.

If you read the tax law, it does not mention a single exchange. Taxes generally do not care about place of transaction.

Learn your tax laws - they are important.

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If you are trading on German exchanges, there are no tax differences since they are all German exchanges. If you are trading on exchanges in other countries then you need to do some research to determine if any foreign tax laws apply.

I am not familiar with German exchanges. All I can do is mention what transpires here in the USA. A good broker routes your purchase/sale order to the exchange with the best price. One can opt to route to a particular exchange but I can't fathom why one would do that when the broker does that for you. With this in mind, I'd suggest that you check DeGiro's web site or contact them directly to find out if they do Smart Routing.

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  • So there is the risk of double taxation? Ie... due to my residence and due to foreign tax laws? I think approaching a tax consultant is in order – user9106985 Apr 28 '20 at 20:26
  • There is risk of double taxation with double meaning in both locales but not double as in twice as much. However, there are tax laws between countries that offset. To what degree they offset depends on the agreement. So yes, approaching a tax consultant is in order. – Bob Baerker Apr 28 '20 at 20:33

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