Österreichische Volksbanken-Aktiengesellschaft ... - Volksbank AG

If the Notes have been transferred into the custodial account of the Disbursing Agent only after
such point in time, withholding tax at the aforementioned rate will be levied on a lump-sum
basis on 30 per cent. of the proceeds from the disposition, assignment or redemption of the
Notes. Where the Note is issued in a currency other than euro, the aforementioned difference
will be computed in the foreign currency.
In computing the tax to be withheld, the Disbursing Agent may deduct from the basis of the
withholding tax any Accrued Interest paid by the holder of a Note to the Disbursing Agent during
the same calendar year. In general, no withholding tax will be levied if the holder of a Note
is an individual
(i) whose Note does not form part of the property of a German trade or business nor gives rise to
income from the letting and leasing of property, and (ii) who filed a withholding exemption
certificate (Freistellungsauftrag) with the Disbursing Agent but only to the extent the interest
income derived from the Note together with other investment income does not exceed the
maximum exemption amount shown on the withholding exemption certificate. Similarly, no
withholding tax will be deducted if the holder of the Note has submitted to the Disbursing
Agent a certificate of non-assessment (Nichtveranlagungsbescheinigung) issued by the relevant
local tax office.
Withholding tax and the solidarity surcharge thereon are credited as prepayments against the
German personal or corporate income tax and the solidarity surcharge liability of the German
resident. Amounts overwithheld will entitle the holder of a Note to a refund based on an assessment
to tax.
Non Residents
Interest, including Accrued Interest and (in the case of financial innovations) Original Issue
Discount, and capital gains are not subject to German taxation, unless (i) the Notes form part of
the business property of a permanent establishment, including a permanent representative, or a
fixed base maintained in Germany by the holder of a Note or (ii) the interest income otherwise
constitutes German source income (such as income from the letting and leasing of certain German-situs
property). If the non-resident of Germany is subject to German taxation with income
from the Notes, a tax regime similar to that explained above at "Tax Residents" applies; capital
gains from the disposition of Notes are, however, only taxable in the case of (i). Non Residents
of Germany are in general exempt from German withholding tax on interest and the solidarity
surcharge thereon. However, where the interest is subject to German taxation, as set forth in the
preceding paragraph, and the Notes are held in a custodial account with a Disbursing Agent,
withholding tax is levied as explained above at "Tax Residents".
German (corporate) income tax regarding warrants
A tax resident beneficiary of warrants who holds warrants as a non-business asset is subject to
the German personal income tax liability (plus solidarity surcharge of 5.5 per cent. thereon) in
case the warrants are sold within one year after the acquisition. Outside this one year period the
capital gain deriving from the disposition of warrants is tax exempt. The income tax and solidarity
surcharge thereon is levied on the capital gain, which is the difference between the sales
price and the sum of the acquisition costs and the income related expenses.
Capital losses may be offset to the amount of the capital gains received by the tax payer in the
same calendar year. Such losses can also be offset, subject to certain additional limitations,
against taxable private capital gains arising in the previous tax year or subsequent tax years.
If the beneficiary exercises a call warrant and the underlying is physically delivered, the acquisition
costs of a call warrant become part of the acquisition costs of the underlying. If the beneficiary
exercises a put warrant and delivers the underlying the capital gain deriving from the sale
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