Prada – Italian Tax Booklet - Prada Group

Ecuador Luxembourg Slovakia Former Yugoslavia: (1)Egypt Macedonia Slovenia ZambiaEstonia Malaysia South AfricaEthiopia Malta South Korea(1) Countries which are the former members of dissolved Federations apply the doubletaxation convention unless they have subscribed to their own particular tax convention.The double taxation convention subscribed to by the Soviet Union currently applies toKyrgyzstan, Tajikistan and Turkmenistan.The double taxation convention entered into with the former Yugoslavia currently appliesto Bosnia and Herzegovina, Serbia and Montenegro.Double taxation conventions may limit the ability of Italy to tax income sourced in Italy, such asdividends and capital gains, arising out of an investment in shares in an Italian company, paidto or realized by non-Italian resident beneficial owners of such shares.In general, the conventions do not settle procedural questions and each State is free to use theprocedure provided in its domestic law in order to apply the limits provided by the conventionunless a specific procedure is agreed between the two States. A State can therefore levy tax ata lower rate in accordance with the relevant provisions of the convention, subject to possibleprior verification that the taxpayer is entitled to benefit from the convention, or it can imposethe tax provided for under its domestic law and subsequently refund the part of that tax thatexceeds the amount it is entitled to levy under the provisions of the convention.(B) Non-existence of double taxation conventions between Italy and Hong KongSince there is currently no double taxation convention or exchange of information agreementin force between Italy and Hong Kong, Italy is not prevented from levying its domestic ordinarytaxation on Hong Kong resident Shareholders for dividends received or capital gains realizedfrom a sale of Shares or for the transfer of Shares for no consideration.The absence of double taxation conventions between Hong Kong and Italy and the fact that taxis not generally paid on dividends in Hong Kong means that Shareholders resident in HongKong may not be able to claim a credit refund.In this respect, the Company has been informed that negotiations in relation to a possibledouble taxation convention are in progress between Hong Kong and Italy. After a first round ofnegotiations was completed in 2004, a new round of negotiations was completed on October6 th , 2010 and other meetings are expected. The process is expected to continue for a fewmore years before being finalized.If an agreement is signed between Italy and Hong Kong, the Company will inform Shareholdersof the possible tax reliefs that may derive from such agreement.4. WITHHOLDING TAX(A) General remarksAs stated in paragraph 2(B), due to the inherent characteristics of CCASS, the Company is notable to ascertain the identity, and consequently the tax residence, of the beneficial owners ofShares who hold their investments in CCASS.The Company is therefore not able to apply a rate of withholding tax on an individual basis tobeneficial owners of the Shares who hold through CCASS.6