Landeskreditbank Baden-Württemberg - L-Bank

FEDERAL REPUBLIC OF GERMANY TAXATION
German Tax Considerations
The following is a general discussion of certain German tax consequences of the acquisition, ownership and
disposition of the Debt Securities offered by us. This discussion does not purport to be a comprehensive
description of all tax consequences that may be relevant to a decision to invest in the Debt Securities. In
particular, this discussion does not consider any specific tax consequences that may apply due to facts or
circumstances of a particular investor. This summary is based on the laws of Germany as currently in force and
applied on the date of this prospectus. Such laws are subject to changes, possibly with retroactive effect.
Prospective investors in the Debt Securities are urged to consult their own tax advisors as to the tax
consequences of the acquisition, ownership and disposition of the Debt Securities, including the effect of any
state or local taxes, under the tax laws of Germany and any other relevant jurisdiction.
German Residents
Taxation of Interest Income
Under German tax law payments of interest on the Debt Securities (including payments made in respect of
interest that accrued up to a disposition of a Debt Security and is credited separately, in the following “Accrued
Interest”—Stückzinsen) to persons who are residents of Germany (in particular, persons whose residence,
habitual abode, statutory seat or place of management is located in Germany, a “German Holder”) are subject to
German income or corporate income tax (plus solidarity surcharge thereon, which is currently levied at a rate of
5.5%). Payments for Accrued Interest rendered upon the acquisition of a Debt Security may be deducted from the
Debt Security holder’s income, if separately accounted for, and may, therefore, reduce such Debt Security
holder’s personal income tax liability. Corresponding to such reduction, however, the Debt Security holder will
be taxable in respect of interest payments that accrued when the Debt Security holder was not actually holding
the Debt Security to the extent such interest is paid to the Debt Security holder. Interest income derived from the
Debt Securities will also be subject to trade tax on income if the Debt Securities are held in a German business
establishment for trade tax purposes.
Withholding Tax on Interest Income
If the Debt Securities are kept or administered in a custodial account maintained by a German Holder with a
German branch of a German or foreign bank or financial services institution (a “German Disbursing Agent”), a
30% withholding tax (Zinsabschlag) on the gross amount of interest payments, including Accrued Interest, plus a
5.5% solidarity surcharge thereon, will be levied, resulting in a total withholding tax charge of 31.65%.
Withholding tax (including a solidarity surcharge thereon) might be credited as prepayments against the
German Holder’s liability for German personal or corporate income tax (and the respective solidarity surcharge),
or, if in excess of such liability, refunded upon application.
German Holders who are individuals holding the Debt Securities as private assets (“Private German
Investors”) are entitled to an annual standard deduction (Werbungskosten-Pauschbetrag) of€51 (€102 for
married couples filing jointly) in computing their income from capital investment (including income earned from
the Debt Securities) as well as an annual exemption (Sparer-Freibetrag) of€1,370 (€ 2,740 for married couples
filing jointly) with respect to income from the Debt Securities and other investment income they receive.
Disposition or Redemption of the Debt Securities
The following applies in respect of Debt Securities that do not qualify as Financial Innovations (as described
under the following caption “Special Rules for Financial Innovations”).
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