Why the French Believe Carried Interest Merits Capital Gains Tax Treatment

March 30, 2010
In the US, legislators are currently debating whether carried interest qualifies as capital gains, or should be taxed as ordinary income instead. France’s Parliament decided years ago that carried interest qualified as capital gains, and recent clarifications to a 2008 law indicate that carry’s tax status is not in danger. Dechert partner Olivier Dumas explains why the French view carried interest as being “at risk”, while the US seems to see carry more and more as a fee for services rendered.