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

Taxation
When Notes are held by a corporation subject to income tax, owned by a
private individual or an individual company (entreprise individuelle), the
interest and redemption premiums may be deducted from the net income of
the company and are declared as interest and dividends by the partner or
manager. They will then be subject to tax under the conditions stipulated
above in paragraph 1.1 (although the standard withholding tax income
exemption referred to above in paragraph 1.1 will not be an option if the
activity of the company is industrial, commercial, non-commercial, craft or
agricultural).
When the partner of a legal entity liable to income tax is a legal entity subject
to corporation tax, the interest and redemption premiums are taken into
account in calculating the net income of the company liable to income tax,
taxed as corporation tax for the partner, under the conditions stipulated above
in paragraph 1.2.(a).
(b)
Capital Gains
If the Notes have been held for more than two years, the capital gain on a
sale is defined as a long-term capital gain on a sale subject to tax at a rate of
16% to which is added social security contributions (which translates as a
global rate of 31.5%).
If they have not been held for more than two years, the short-term capital gain
will be taken into account in determining the taxable net income under the
general regime.
Net long-term capital losses can be affected to the losses for the (tax) year
and/or offset against long-term capital gains realised within the course of
either the (tax) year or next 10 (tax) years.
When the partner of a legal entity liable to income tax is a legal entity subject
to corporation tax, capital gains are taken into account in calculating the net
income of the company liable to income tax, imposed as corporation tax for
the partner, under the conditions stipulated above in paragraph 1.2.(b).
2. Non-French tax residents
2.1 EU Taxation
On 3 June 2003, the European Council of Economic and Finance Ministers adopted
the Directive 2003/48/EC on the taxation of savings income (the "Directive").
Pursuant to the Directive and subject to a number of conditions being met, Member
States are required, since 1 July 2005, to provide to the tax authorities of another
Member State, inter alia, details of payments of interest within the meaning of the
Directive (interest, premiums or other debt income) made by a paying agent located
within their jurisdiction to, or for the benefit of, an individual resident in that other
Member State (the "Disclosure of Information Method").
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