HYPO TIROL BANK AG

Capital gainsAccording to Austrian tax law capital gains trigger taxation, if they qualify as income from trade or business,which generally is the case if realised by a corporate investor.Capital gains realised by individuals (and certain types of corporate entities e.g. private-law foundations) areonly taxed, if the capital gains qualify as income resulting from a speculative transaction. Any disposition ofNotes will be deemed to be a speculative transaction if made within the holding period of one year (the"speculative period"), but see (iii) Recent Developments below.Some specific rules regarding certain types of Notes are provided below.Fixed/Floating Rate NotesIn case of redemption or early buyback (by the Issuer) of Notes which carry interest, any difference betweenissue price and a higher redemption (early buyback) price will be tax free, if such difference does notexceed 2 per cent. If such difference exceeds 2 per cent., the abovementioned general rules of taxationapply. However, this threshold of 2 per cent. will not apply anymore once Austria’s newly enacted taxregime becomes operative (see below under (iii) "Recent Developments" for more details).Zero Coupon NotesIn case of redemption or early buyback of the Notes by the Issuer, the difference between issue price andredemption price is treated as income from investment of capital, if realised by individuals (and certain typesof corporate entities e.g. private law foundations).In case of other disposal of the Notes by individuals (and certain types of corporate entities e. g. a privatelawfoundation), the difference between issue price and the inner value (based on the internal yield) of theNote is treated as income from capital investment. The difference between inner value of the Note anddisposal price will be regarded as capital gain.Foreign Currency NotesAny capital gain on foreign currencies will be realised only upon conversion to euro.Index Linked NotesIn case of redemption or early buyback of the Notes by the Issuer, the difference between issue price andredemption price is treated as income from investment of capital (and not as capital gains), if realised byindividuals (and certain types of corporate entities e. g. a private-law foundations).Gift notificationIn the decisions dated 7 March 2007 and 15 June 2007 the Austrian Constitutional Court(Verfassungsgerichtshof) has repealed the Inheritance Tax and Gift Tax Act with effect of 1 August 2008.As a consequence, the Austrian parliament passed the Gift Notification Act which requires with effect of 1August 2008 that gifts exceeding certain amounts must be notified to the Austrian Tax authorities.Stamp Tax (Rechtsgeschäftsgebühr)Under certain circumstances the transfer of Registered Notes or Pfandbriefe in registered form may triggera stamp tax in Austria at the rate of 0.8 per cent. of the consideration.Therefore investors should consult their own professional advisors before executing transfer documents forsuch Notes or bringing or sending into Austria such documents or any copy thereof or any writtenconfirmation or written reference.(ii) Investors subject to limited tax liability ("non-residents") –see also "EU Savings Tax Directive" belowInterest paymentsIn the Republic of Austria, interest payments in respect of Notes to non-residents (within the meaning of therespective Austrian tax law), in accordance with the terms and conditions of the Notes will be exempt fromany Austrian income tax, including any Austrian withholding tax on investment income, as long as interestpayments are made by paying offices located outside of Austria.169