Under the Euro Medium Term Note Programme ... - Finance - EDF

Taxation
1.2 Legal entities liable to corporation tax
(a)
Income
Interest on Notes held by legal entities liable to corporation tax is included in
taxable income for the year.
The bond redemption premium is the difference between amounts or
securities to be received and those paid out when the Notes are acquired.
They are taxable at the time of redemption. However, if the premium exceeds
10% of the cost of acquiring the Notes and the average issue price of the
Notes does not exceed 90% of the redemption value, the bond redemption
premium will be spread out over the life of the Notes under the following
conditions.
The fraction of premium and interest to be applied to taxable income up to the
date of redemption of a Note is determined by applying to the acquisition cost
(increased if necessary by the fraction of the capitalised premium and interest
on the anniversary of the borrowing thus allowing the progressive taxation of
annuities), the actuarial rate of interest determined at the acquisition date.
Interest and redemption premiums are taxable at a rate of 33.33% (or at a
reduced rate of 15% under certain conditions and within certain limits for
companies specified in Article 219 I b) of the Code Général des Impôts) to
which is added a social security contribution at 3.3% calculated on the
amount of corporate tax, with an allowance of Euro 763,000 for each 12-
month period. Furthermore, an additional contribution of 5% will apply for
fiscal years ending between 31 December 2011 and 31 December 2013 to
companies with turnover exceeding Euro 250 million.
(b)
Capital Gains
Under current legislation, capital gains (exclusive of accrued interest made)
realised when Notes are sold by legal entities domiciled in France for tax
purposes are taken into account in order to determine a legal entity's taxable
income under the general regime.
Under the general regime, capital losses are deductible from taxable income.
1.3 Companies and legal entities liable to income tax
(a)
Income
The rules for the affectation and taxation of interest and redemption
premiums are identical to those described above concerning legal entities
liable to corporation tax.
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