EUR 3000000000 debt issuance programme, 10 ... - Volksbank AG

. Private investors
Any current interest or a bonus payment from the Securities qualifies as investment income pursuant to § 20
(1) No. 7 dEStG and is subject to personal income tax at a rate of 25% (plus 5.5% solidarity surcharge thereon
and church tax (if any)).
Capital gains from the sale or redemption of the Securities qualify as investment income pursuant to Sec. 20
para. 2 No. 7 dEStG 1 and are subject to personal income tax at a rate of 25% (plus 5.5% solidarity surcharge
thereon and church tax (if any)). This is irrespective of whether the relevant Security qualifies as financial
innovation. Losses from the sale or redemption of the Securities can only be off-set against other investment
income. In the event that an off-set is not possible in the assessment period in which the losses have been
realized, such losses can be carried forward into future assessment periods only and can be off-set against
investment income generated in future assessment periods.
Gains and losses are determined by the difference between the sales/redemption price after the deduction of
expenses directly connected to the sale/redemption and the acquisition costs for the Securities.
In case the Securities are denominated in a currency other than Euro, the gains and losses are computed as the
excess of the proceeds from the Securities' sale or redemption expressed in Euro over the purchase price expressed
in Euro where the Euro amounts are determined on the basis of the foreign exchange rate as of the
acquisition date and the sale or redemption date respectively.
c. Withholding tax
If the Securities are held in custody with or administered by a German credit institution, financial services
institution, securities trading company or securities trading bank (including a German permanent establishment
of such foreign institution), a tax at a rate of 25% (plus solidarity surcharge thereon and church tax (if
any)) is withheld by such institution upon sale or redemption of the Securities. The withholding tax is imposed
on current interest or other bonus payments and (in the case of a sale/redemption) on the excess of the proceeds
from the sale or redemption after the deduction of expenses directly connected to the sale or redemption
over the purchase price paid for the Securities, if the Securities were held in custody by such institution since
their acquisition. If custody has changed since the acquisition and the acquisition data is not proved, the tax at
a rate of 25% (plus solidarity surcharge and church tax (if any)) will be imposed on an amount equal to 30%
of the proceeds from the sale or redemption of the Securities.
In case of redemption against physical settlement the investor must provide the disbursing agent with a cash
amount equal to the amount of withholding tax which has to be withheld.
By contrast, the Issuer of the Securities, unless it qualifies as disbursing agent, is not obliged under German
law to withhold any withholding tax (Quellensteuer) upon the sale or redemption of the Securities or from
interest payments.
For private investors the withholding tax is in principle definitive (flat tax; Abgeltungsteuer). Private investors
having a lower personal income tax rate may include the capital investment income in their personal income
tax return to achieve a lower tax rate. Income not subject to a definitive withholding tax (e.g. since there is no
German custodian institution) will be subject to a special tax rate of 25% (plus solidarity surcharge) upon
assessment.
In terms of business investors any withholding tax withheld is credited against the investor’s personal or corporate
income tax liability in the course of the tax assessment procedure. Any potential surplus is refunded.
No withholding tax deduction will apply on the gains from the sale or redemption of the Securities where the
Securities are held by a corporation. Pursuant to the draft Annual Tax Act 2009, this exemption is expected to
1 Einkommensteuergesetz (EStG) in der Fassung vom 13. Dezember 2006 (BGBl. I S. 2915) unter Berücksichtigung der Beschlussfassung
des Unternehmensteuerreformgesetzes 2008 vom 25. Mai 2007.
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