ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

2.9 Takeover bids instigatedby third parties during theprevious financial year andthe current financial yearNo takeover bid has been instigated by third parties in respectof TiGenix’ equity during the previous financial year and thecurrent financial year.2.10 Taxation in BelgiumThe following is a general summary of the Belgian federaltax treatment of the acquisition, ownership and disposal ofShares by an investor that purchases such Shares in connectionwith this Offering. The summary is based on Belgian tax laws,regulations and administrative interpretations in effect onthe date of this prospectus. Any changes in Belgian tax law,regulations and administrative interpretations, includingchanges that could have a retrospective effect may affect thevalidity of this summary.This summary does not purport to address all tax consequencesof the ownership and disposal of the Shares, and does not takeinto account the specific circumstances of particular investors,some of which may be subject to special rules, or the tax lawsof any country other than Belgium. This summary does notdescribe the tax treatment of investors that are subject tospecial rules, such as banks, insurance companies, collectiveinvestment undertakings, dealers in securities or currencies,persons that hold, or will hold, Shares as a position in a straddle,share-repurchase transaction, conversion transaction, syntheticsecurity or other integrated financial transaction.For the purposes of this summary, a Belgian resident is eitheran individual subject to Belgian personal income tax (i.e., anindividual who is domiciled in Belgium or has his seat of wealthin Belgium or a person assimilated to a resident), a companysubject to Belgian corporate income tax (i.e., a corporateentity that has its statutory seat, its main establishment, itsadministrative seat or seat of management in Belgium) or alegal entity subject to the Belgian income tax on legal entities(i.e., a legal entity other than a company subject to Belgiancorporate income tax, that has its statutory seat, its mainestablishment, its administrative seat or seat of managementin Belgium). A Belgian non-resident is any person that is not aBelgian resident.Investors should consult their own advisers regarding the taxconsequences of an investment in the Shares in the light oftheir particular circumstances, including the effect of any state,local or other national laws.2.10.1 DividendsFor Belgian income tax purposes, the gross amount of allbenefits paid on or attributed to the Shares is generally treatedas a dividend distribution. By way of exception, the repaymentof capital carried out in accordance with the Companies Codeis not treated as a dividend distribution to the extent thatsuch repayment is imputed to fiscal capital. This fiscal capitalincludes, in principle, the actual paid-up statutory share capitaland, subject to certain conditions, the paid issuance premiumsand the cash amounts subscribed to at the time of the issue ofprofit sharing certificates.Belgian withholding tax of 25 per cent is normally levied ondividends, subject to such relief as may be available underapplicable domestic or tax treaty provisions. Under certaincircumstances, the 25 per cent rate is reduced to 15 per centfor certain qualifying shares (VVPR Shares). Shares eligible forthis reduced rate may carry VVPR Strips which are securitiesrepresenting the right to benefit from the reduced withholdingtax rate of 15 per cent. The New Shares offered in theframework of this Offering will not carry VVPR Strips. None ofthe Shares benefit from this reduced withholding tax rate, orthe so called VVPR-right.In the case of a redemption of Shares, the redemptiondistribution (after deduction of the part of the fiscal capitalrepresented by the redeemed Shares) will be treated as adividend which, in certain circumstances, may be subjectto a Belgian withholding tax of 10 per cent. No withholdingtax will be triggered if this redemption is carried out on astock exchange and meets certain conditions. In the event ofliquidation of the Issuer, a withholding tax of 10 per cent will belevied on any distributed amount exceeding the fiscal capital.(a) Belgian resident individualsFor Belgian resident individuals who acquire and hold theShares as a private investment, the Belgian withholding taxgenerally constitutes the final tax in Belgium on dividendincome and the dividend need not be reported in the annualincome tax return.51 •