Vorarlberger Landes- und Hypothekenbank Aktiengesellschaft

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Also with respect to limited tax liability as stated in the preceding paragraphs the different types of Notes
are treated according to the rules described under (i) above. Taxation, if any, only takes place at maturity
or upon prior redemption or sale of the Notes or in case of foreign currency Notes upon conversion to
euro. Non-resident corporate investors may generally avoid withholding tax on investment income
received by a business by way of a particular notification procedure.
b. Capital gains
Holders of Notes who are non-residents of the Republic of Austria are generally not subject to Austrian tax
on capital gains (speculative gains) derived from the sale of the Notes certain capital gains may be treated
as interest income in which case the discussion under caption a. applies.
c. Inheritance and gift tax
As long as neither the deceased holder of the Notes nor his heirs, or a donor of the Notes or the
beneficiary are Austrian residents, no Austrian inheritance or gift tax will be payable under applicable
Austrian tax law even before the respective law no longer applies.
d. Stamp Tax (Rechtsgeschäftsgebühr)
Under certain circumstances the transfer of Registered Notes or Pfandbriefe in registered form may trigger
a stamp tax in the Republic of Austria at the rate of 0.8 % of the consideration. Therefore investors should
consult their own professional advisors before executing transfer documents for such Notes or bringing or
sending into the Republic of Austria such documents or any certified copy thereof or any written
confirmation or written reference.
EU Savings Tax Directive
Under the EU Council Directive 2003/48/EC dated 3 June 2003 on the taxation of savings income in the
form of interest payments (the "EU Savings Tax Directive") each EU Member State must require paying
agents (within the meaning of such directive) established within its territory to provide to the competent
authority of this state details of the payment of interest made to any individual resident in another EU
Member State as the beneficial owner of the interest. The competent authority of the EU Member State of
the paying agent is then required to communicate this information to the competent authority of the EU
Member State of which the beneficial owner of the interest is a resident.
For a transitional period, the Republic of Austria, the Kingdom of Belgium and the Grand Duchy of
Luxembourg may opt instead to withhold tax from interest payments within the meaning of the EU Savings
Tax Directive at a rate of 20% since 1 July 2008, and of 35% from 1 July 2011. As from 2010 Belgium
applies the information procedure described above.
In conformity with the prerequisites for the application of the EU Savings Tax Directive, a number of non-
EU countries and territories, including Switzerland, have agreed to apply measures equivalent to those
contained in such directive (a withholding system in the case of Switzerland).
In the Federal Republic of Germany, provisions for implementing the EU Savings Tax Directive were
enacted by legislative regulations of the Federal Government. These provisions apply since 1 July 2005.
The "EU-Quellensteuergesetz" (EU-QuStG) that implements the EU Savings Tax Directive in the Republic
of Austria provides that interest payments by Austrian paying agents to non-resident individuals having
their residence in an EU Member State will be subject to EU-withholding tax as follows: currently 20%
withholding applies and after 1 July 2011 35% withholding will apply.
A tax withheld pursuant to the EU Savings Tax Directive in a different EU Member State is credited against
a tax liability arising on the interest payment under Austrian domestic tax law, and if the tax withheld is
higher than such tax liability, the difference is refunded. This tax is not withheld at any time if the beneficial
owner of the interest can provide a certification of the competent tax authority of the EU Member State
where he is resident. This certification must include the beneficial owner's name, address, tax number or
other identification number or if such number is not available, the date of birth and the paying agent's
registered office. In addition, the name and address of the paying agent, as well as the account number of
the beneficial owner or if an account number is unavailable, the security identification number must be
included.