ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

(II) Non-resident companies or entitiesCapital gains realised on the Shares by non-residentcompanies or non-resident entities that have notacquired the Shares in connection with a businessconducted in Belgium through a Belgian permanentestablishment are generally not subject to taxation andlosses are not tax deductible.Capital gains realised by non-resident companies or othernon-resident entities that hold the Shares in connectionwith a business conducted in Belgium through a Belgianpermanent establishment are generally subject to thesame regime as Belgian resident companies.2.10.3 Tax on stock exchange transactionsThe purchase and the sale and any other acquisition or transferfor consideration of existing Shares (secondary market) inBelgium through a professional intermediary is subject to thetax on stock exchange transactions of 0.17 per cent of thepurchase price, capped at €500 per transaction and per party.Upon the issue of new Shares (primary market), no tax on stockexchange transactions is due.No tax on stock exchange transactions is due by (1) professionalintermediaries described in Article 2, 9° and 10° of the BelgianLaw of August 2, 2002 where they act their own account,(2) insurance companies described in Article 2, §1 of the BelgianLaw of July 9, 1975 acting on their own account, (3) professionalretirement institutions referred to in Article 2, 1° of theBelgian Law of October 27, 2006 concerning the supervisionof institutions for occupational pension acting on their ownaccount and (4) collective investment institutions acting fortheir own account.Belgian non-residents who purchase or otherwise acquireor transfer, for consideration, existing Shares in Belgium(secondary market) on their own behalf through a professionalintermediary may be exempt from the tax on stock exchangetransactions if they deliver a sworn affidavit to the intermediaryconfirming their non-resident status.2.10.4 VVPR StripsThe New Shares will be issued without VVPR Strips and will notbenefit from the reduced withholding tax regime.2.10.5 Unexercised Rights Payment and saleof the Preferential Rights prior to theclosing of the Rights Subscription PeriodThe Unexercised Rights Payment should not be subject toBelgian withholding tax.The Unexercised Rights Payment will, in principle, not betaxable in the hands of Belgian resident or non-residentindividuals except for resident individuals who hold thePreferential Rights for professional purposes or for non-residentindividuals who hold the Preferential Rights for a businessconducted in Belgium through a fixed base. In these cases,the gains realised upon the receipt of the Unexercised RightsPayment will be taxed at the progressive income tax rates,increased by local surcharges.The gain realised upon the receipt of the Unexercised RightsPayment will be taxable at the ordinary corporate tax ratefor Belgian resident companies. Non-resident companiesholding the Preferential Rights through a Belgian permanentestablishment will also be taxed at the ordinary non-residentincome tax rate on the gain realised upon the receipt of theUnexercised Rights Payment.Legal entities subject to Belgian tax on legal entities are notsubject to tax on the Unexercised Rights Payment.The same Belgian tax analysis applies to gains realised upon thesale of the Preferential Rights prior to the closing of the RightsSubscription Period. For professional investors, losses realisedon the Preferential Rights are, in principle, deductible.The rules regarding the tax on stock exchange transactionsequally apply to the Unexercised Rights Payment and to thesale of the Preferential Rights prior to the closing of the RightsSubscription Period.55 •