Bouwfonds European Residential - Catella Real Estate AG

Tax Information
€0.37 per unit will be distributed on 3 August 2009 for the
financial year ended 30 April 2009.
Taxation at fund level
In Germany, investment funds are legally exempt from all
income taxes. Income is taxed at the level of the investors.
Taxation at private investor level
If the units are held as private assets, taxable income from
the Fund is treated as income from capital investments. This
also includes the income distributed by the Investment Fund,
deemed distributions and interim profits, as well as gains on
the purchase and sale of fund units if these were or are
purchased after 31 December 2008. This income is taxed in
the year it accrues.
Income from capital investments is subject to 25% withholding
tax (plus solidarity surcharge and, if applicable,
church tax). As the tax withheld is generally definitive (flat
tax), income from capital investments does not, as a rule,
have to be disclosed in the investor’s income tax return.
When withholding the tax, the custodian, as a matter of
principle, already offsets any losses and credits any foreign
withholding taxes.
Nevertheless, the tax withheld may not have definitive effect
in some circumstances, e.g. if the investor’s personal tax rate
is lower than the flat tax rate of 25%. In this case, income
from capital investments can be disclosed in the investor’s
income tax return. The tax office then applies the lower personal
tax rate and counts the tax withheld against the investor’s
personal tax liability (Günstigerprüfung – most
favourable tax treatment).
If no tax has been withheld on income from capital investments
(for example because a gain on the sale of fund units
is generated in a foreign securities account), this income
must be disclosed in the tax return. This income from capital
investments is then also subject to the 25% flat tax rate or
the lower personal tax rate in the course of the assessment.
Even if the tax has been withheld and the investor has a
higher personal tax rate, information on income from capital
investments must be disclosed if, for example, extraordinary
personal expenses or special personal deductions (e.g.
donations) are claimed in the investor’s income tax return.
No tax needs to be withheld if the investor is a German tax
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resident and has submitted an exemption instruction,
provided that the taxable income components do not exceed
EUR 801 for single persons or EUR 1,602 for married couples
assessed jointly. The same also applies if a non-assessment
certificate has been submitted or if foreign investors furnish
proof of their non-resident status for tax purposes.
Distributed or retained domestic rental income, interest,
other income, foreign dividends and gains on the sale of
domestic real estate within the 10-year holding period that
are held in domestic custody are subject to the 25% withholding
tax (plus solidarity surcharge and, if applicable,
church tax).
If units are held in an investment fund classed as an accumulating
fund for tax purposes, the Investment Company
itself remits the 25% tax (plus solidarity surcharge) withheld
on the retained income that is subject to tax. Thus, the issue
and redemption prices for the fund units are reduced by the
tax withheld at the end of the financial year. As investors are
generally unknown to the investment company, church tax
cannot be retained in this case; as a result, investors who are
subject to church tax must disclose the corresponding information
in their income tax return.
Gains on the sale of domestic and foreign properties not
falling within the 10-year holding period
Gains on the sale of domestic and foreign properties not
falling within the 10-year holding period that are generated at
the Investment Fund level are always tax-free for the investor.
Foreign rental income and gains on the sale of foreign
properties within the 10-year holding period
Foreign rental income and gains on the sale of foreign
properties in respect of which Germany has waived taxation
under a double taxation agreement (exemption method) are
also tax-free (general rule). The tax-free income also has no
effect on the applicable tax rate (i.e. Progressionsvorbehalt
– progression clause – does not apply).
If, exceptionally, the tax credit method has been agreed in the
relevant double taxation treaty or no double taxation treaty
has been signed, the statements made regarding the treatment
of gains on the sale of domestic real estate within the
10-year holding period shall apply analogously. Taxes paid in
the relevant countries of origin may be offset against German
income tax where appropriate, insofar as the taxes paid
have not already been claimed as income-related expenses at
the level of the Investment Fund.
Gains on the sale of securities, gains on forward transactions
and income from option premiums