OFFERING MEMORANDUM Global Offering of up to ... - Nordex
OFFERING MEMORANDUM Global Offering of up to ... - Nordex
OFFERING MEMORANDUM Global Offering of up to ... - Nordex
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Company, which is known as the ‘‘shadow burden’’) against their income tax liability (plus solidarity<br />
surcharge). The purpose behind this corporation income tax imputation procedure is the prevention <strong>of</strong><br />
double taxation <strong>of</strong> corporations and shareholders as well as the taxation <strong>of</strong> dividends according <strong>to</strong> the<br />
personal tax situation <strong>of</strong> shareholders with unlimited tax liability. The basis for determining the<br />
solidarity surcharge <strong>to</strong> be paid by the shareholder is reduced by the amount <strong>of</strong> the corporation income<br />
tax credit.<br />
After Oc<strong>to</strong>ber 1, 2002, only 50% <strong>of</strong> dividend payments by <strong>Nordex</strong> <strong>to</strong> private inves<strong>to</strong>rs will be subject <strong>to</strong><br />
income tax (plus solidarity surcharge). At the corporation level, the distribution tax rate <strong>of</strong> 30% is no<br />
longer applicable; at the shareholder level, the corporation income tax credit is not available anymore.<br />
Private inves<strong>to</strong>rs are entitled <strong>to</strong> a savings allowance <strong>of</strong> DM 3,000.00 p.a. in 2001, E1,550.00<br />
respectively (DM 6,000.00 p.a. in 2001, E3,100.00 from 2001 respectively in the case <strong>of</strong> married co<strong>up</strong>les<br />
filing jointly). In addition, a blanket deduction for income-related expenses in the amount <strong>of</strong> DM 100.00<br />
p.a., E51.00 p.a. from 2002 respectively (DM 200.00 p.a. in 2001, E102 p.a. from 2001 respectively in<br />
the case <strong>of</strong> married co<strong>up</strong>les filing jointly) is granted unless the expenses involved are demonstrated <strong>to</strong><br />
have actually exceeded that amount. From Oc<strong>to</strong>ber 1, 2002 on only 50% <strong>of</strong> the expenses related in<br />
financial terms <strong>to</strong> the <strong>Nordex</strong> dividends can be deducted, regardless in which assessment period the<br />
expenses accrued.<br />
If the <strong>Nordex</strong> shares are held as part <strong>of</strong> the operating assets <strong>of</strong> a commercial sole proprie<strong>to</strong>r or a<br />
commercial partnership, the gross dividend is subject <strong>to</strong> trade tax unless the taxpayer held at least 10%<br />
<strong>of</strong> the Company’s share capital at the beginning <strong>of</strong> the relevant tax period. For the purposes <strong>of</strong> the<br />
income tax levied on a sole proprie<strong>to</strong>r, the dividend is <strong>up</strong> <strong>to</strong> September 30, 2002 fully, after Oc<strong>to</strong>ber 1,<br />
2002 only <strong>to</strong> 50% included in the calculation <strong>of</strong> income from trade. In the case <strong>of</strong> partnerships, the<br />
dividend is included in the uniform and itemised declaration and is allocated <strong>to</strong> the partners from<br />
there; the taxation <strong>of</strong> these partners depends on their legal form.<br />
After Oc<strong>to</strong>ber 1, 2002, shareholders not subject <strong>to</strong> corporation income tax can only deduct 50% <strong>of</strong><br />
operating expenses related in financial terms <strong>to</strong> the <strong>Nordex</strong> dividends, regardless in which assessment<br />
period they accrue.<br />
In the case <strong>of</strong> shareholders subject <strong>to</strong> corporation tax, the gross dividend is subject <strong>to</strong> trade tax until<br />
September 30, 2002 unless the taxpayer held at least 10% <strong>of</strong> the Company’s share capital at the<br />
beginning <strong>of</strong> the relevant tax period. After Oc<strong>to</strong>ber 1, 2002, the dividends will be exempt from trade tax.<br />
Up <strong>to</strong> September 30, 2002, dividends paid <strong>to</strong> shareholders subject <strong>to</strong> corporation income tax are taxable<br />
may be subject <strong>to</strong> corporation income tax with a special tax rate. The above statements on the<br />
calculation <strong>of</strong> income under the imputation procedure and on the special tax rate apply accordingly.<br />
<strong>Nordex</strong> Dividends distributed <strong>to</strong> corporations will no longer be taxed after Oc<strong>to</strong>ber 1, 2002. A minimum<br />
equity interest or holding period is not specified. However, the dividends may be subject <strong>to</strong> a<br />
s<strong>up</strong>plementary tax. Operating expenses directly related <strong>to</strong> tax-free <strong>Nordex</strong> dividends in financial terms<br />
may not be deducted as operating expenses.<br />
Shareholders not Subject <strong>to</strong> Unlimited Tax Liability<br />
Dividend payments made by the Company before September 30, 2002 are subject <strong>to</strong> withholding tax at<br />
a rate <strong>of</strong> 25% <strong>of</strong> the dividend approved by the shareholders’ general meeting (‘‘cash dividend’’, that is<br />
the dividend less corporate income tax and withholding tax). For such distributions paid after Oc<strong>to</strong>ber<br />
1, 2002 the withholding tax is reduced <strong>to</strong> 20% <strong>of</strong> the cash dividend. A solidarity surcharge <strong>of</strong> 5.5% is<br />
levied in both cases, increasing the effective tax liability <strong>to</strong> 26.375% until September 30, 2002 or 21.1%<br />
after Oc<strong>to</strong>ber 1, 2002. Withholding tax and the solidarity surcharge are deducted from the tax liability<br />
as part <strong>of</strong> an assessment. If a double taxation agreement applies, the investment income tax (plus<br />
solidarity surcharge) on dividend distributions paid <strong>to</strong> shareholders not resident in Germany by<br />
corporations domiciled in Germany may be reduced. To claim this benefit, the shareholder entitled <strong>to</strong><br />
the benefit or his agent must file an application with the German tax authorities (Bundesamt für<br />
Finanzen, Friedh<strong>of</strong>straße 1, D-53221 Bonn) pursuant <strong>to</strong> the double taxation agreement for a reduction<br />
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