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

deemed prematurely, the difference between the redemption value and the issue price of the note is taken into
consideration when determining the taxable income (§ 7 (2) SITA).
If interest and other income payments are paid out by the Slovak paying agent (economic operator seated in
Slovakia who pays interest or secures the payment of interest for the immediate beneficial owner), then such
payments are subject to a withholding tax of 19 percent (§ 7 (3) SITA). The tax withheld is considered as a tax
prepayment and may be credited against the final personal income tax liability of the individual reported in his
Slovak personal income tax return (§ 43 (6) SITA). In case the individual does not use this opportunity, the
tax withheld is considered as a final tax (§ 43 (7) SITA). The Slovak paying agent is obliged to remit the tax
withheld to the tax authorities not later than by the fifteenth day of the month following the month in which
the interest and other income payment has been made and inform the tax authorities about the withholding (§
43 (11) SITA).
Capital gains (i.e. the difference between the sales price and the acquisition cost of the notes) realized upon
sale of the notes are not subject to a withholding tax. They shall be included in the personal income tax return
of the individual and taxed at a rate of 19 percent (§ 8 (1) (e) SITA). According to the SITA, in case a loss is
generated from the sale of the notes, it cannot be recognized for tax purposes (§ 8 (2) SITA).
Corporations with unlimited tax liability in the Slovak Republic are subject to corporate income tax on all
interest and other income payments resulting from the notes at a rate of 19 percent. In general, the payments
shall be included in the tax base of the corporations from their business activities and taxed in their corporate
income tax return.
In case the interest and other income payments are made to entities which have not been established to perform
the business activities, the Slovak paying agent is obliged to withhold 19 percent tax which is considered
as a final tax (§ 43 (3) (i) in connection with § 43 (6) SITA).
Capital gains (i.e. the difference between the sales price and the acquisition costs of the notes) realized upon
the sale of the notes by the corporations are not subject to a withholding tax. They shall be included in the tax
base of the corporations and taxed at a rate of 19 percent in their corporate income tax return. In general, the
loss generated from sale of the notes cannot be recognized for tax purposes. However, this should not be the
case of publicly traded notes whose acquisition price is not higher and the income from the sale of the notes is
not lower than 10 percent variance from the average price of the notes publicly announced by the stock exchange
on the day of its purchase and on the day of its sale. In case the loss from the sale of the notes is generated
by a holder of the securities trading license, it may be recognized for tax purposes up to the amount of
the acquisition costs of the notes booked as an expense in the accounting records of the holder of the securities
trading license (§ 19 (2) (f) SITA).
8.6.1.3 Income received from abroad
Individuals subject to unlimited tax liability in the Slovak Republic holding notes are subject to personal income
tax on all resulting interest and other income payments and on the capital gain realized from
the sale of notes pursuant to the SITA.
If interest and other income payments or income from the sale of notes is received from abroad, then such
income should be included in the personal income tax return of the individual and taxed at a rate of 19 percent
(§ 7 (3) last sentence SITA). In case of any income tax withheld abroad, the avoidance of double taxation is
ensured in accordance with the respective Double Taxation Treaty. According to the SITA, in case a loss is
generated from the sale of the notes, it cannot be recognized for tax purposes (§ 8 (2) SITA).
Corporations with unlimited tax liability in the Slovak Republic are subject to corporate income tax on all
interest and other income payments resulting from the notes and from the capital gain realized from the sale of
notes, In general, the income shall be included in the tax base of the corporations from their business activities
and taxed in their corporate income tax return at a rate of 19 percent. In case of any income tax withheld
abroad, the avoidance of double taxation in ensured in accordance with the respective Double Taxation
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