annual report 31 Mar 2006 - SEB Asset Management

Tax Information for Investors
income subject to the progression clause (e.g. the proportionate
tax-free income on properties outside Germany)
exceeds EUR 410 in each case.
Only half of domestic and foreign dividends, including
those paid by the real estate corporations, that are distributed
or retained by the Fund are taxable for investors
(Halbeinkünfteverfahren – German half-income system).
Rental, interest and dividend income in particular that
is not distributed is deemed to have accrued to the
investors. Fund assets include properties located outside
Germany. As a rule, rental income from such properties
accrues to investors in Germany tax-free due to existing
double taxation agreements. However, it is subject to the
progression clause; in other words, tax-free income must
be taken into account when ascertaining the individual
tax rate applicable to the taxable income of the respective
investor. Such tax-free income subject to the progression
clause must be disclosed in the tax return in Annexe AUS
broken down by country (Belgium: EUR 0.0090 per unit,
France: EUR 0.1193 per unit, United Kingdom: EUR 0.0001
per unit, Italy: EUR 0.1709 per unit, Luxemburg:
EUR 0.0133 per unit, the Netherlands: EUR 0.0045 per unit,
Austria: EUR 0.0046 per unit, USA: EUR 0.0061 per unit).
Gains from the sale of domestic and foreign real estate not
falling within the 10-year period that are generated at the
Fund level are always treated as tax-free for the investor.
Gains from the sale of domestic properties within the 10year
period that are generated at Fund level are always
treated as taxable for the investor. This is valid regardless
of whether they are distributed or retained.
Gains from the sale of foreign properties within the 10year
period in respect of which Germany has waived taxation
in accordance with a double taxation agreement also
remain tax-free. Return of capital distributions (e.g. in the
form of development project interest) are not taxable.
Taxation at business investor level
Investors who hold their units as business assets realise
business income as a rule. Only half of domestic and foreign
dividends, including those paid by the real estate
58 SEB ImmoInvest
corporations, that are distributed or retained by the Fund
are taxable at the level of the investors subject to income
tax (half-income system). This income is tax-free as a rule
for investors subject to corporation tax (however, 5% of
dividends are considered as non-deductible business
expenses). An adjustment item must be recognised under
liabilities for tax purposes for the depreciation mentioned
in the table on page 62, letter g).
The adjustment item must be reversed when the units are
sold or redeemed. Dividends, interest and rent that are not
distributed are deemed to have accrued to the investor. An
asset-side adjustment item in the amount of the income
deemed to have accrued must be created for tax purposes.
This asset-side adjustment item must be reversed when the
units are sold or redeemed or when the retained amounts
are distributed.
Income that is tax-free in accordance with double-taxation
agreements and income subject to the half-income system
must be deducted from the taxable and accounting profit
during preparation of the income tax and corporation tax
returns (in the case of income subject to the half-income
system accruing to investors subject to income tax, only
50% of the amount is to be deducted).
Withholding tax on dividend income/savings tax
Taxable income is subject in principle to savings tax
(ZAST – Zinsabschlagsteuer). The custodian bank holding
the units must retain and remit to the tax authorities
30% of the portions of unit income subject to savings tax
on payment to private investors resident in Germany.
Counter transactions are subject to 35% savings tax. Nonresidents
for tax purposes receive the distribution without
the tax deduction if the units are held in custody at a
bank in Germany or abroad. The savings tax remitted is
certified for the investor, and must be disclosed in
Annexe KAP as imputable tax (withholding tax on dividend
income incurred in Germany) and is offset against
the income tax liability. Upon submission of a nonassessment
certificate or proof of non-resident status to
the custodian bank, the portions of unit income subject to
savings tax contained in the distribution will be exempted
from savings tax in their full amount; upon submission