Österreichische Volksbanken-Aktiengesellschaft ... - Volksbank AG

Capital gains realized on the disposal of the Notes are not subject to any withholding tax in
Luxembourg.
Capital gains realized and interest paid to Luxembourg tax resident corporations are not subject
to any withholding tax in Luxembourg.
Non Tax Residents
The EU Savings Directive of 3 June 2003 was implemented in Luxembourg by the law of June
21, 2005 with entry into force on July 1, 2005. It applies to interest payments (as defined below)
made by a Luxembourg paying agent to an individual resident or residual entity established in
another Member State or in one of the dependant or associated territories which has implemented
the Directive with a reciprocity clause. Luxembourg has opted for a withholding tax
system as default system, but offers the exchange of information and exemption system 47 upon
request from the beneficial owner of the interest payment.
The term interest applies to income from debt claims of any type, whether or not secured by
mortgage and whether or not carrying a right to participate in the debtor’s profits, and, in particular,
income from government securities and income from bonds or debentures, including
premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late
payments shall not be regarded as interest payments.
The concept of debt claim therefore encompasses every type of instrument through which a sum
of money (immediate payment) is made available to one party (the borrower) in return for payment
not only of the amount made available but also a remuneration (future payment) that is
fixed by the other party (the lender). It is also worth noting that loans between individuals are
excluded provided the debtor of the interest cannot be considered a paying agent.
Interest as defined by Article 6.1.a) and b) comprises:
� Interest income from any type of bank deposit (sight account, term deposit, savings account…).
Interest from any type of debt claim issued in the form of a security that is not subject to a
grandfathering clause.
The EU Savings Directive also covers certain types of income realized and distributed by undertakings
of collective investment and income deriving from the alienation of such shares/ units
(article 6.1.c and 6.1.d).
The applicable rate of withholding tax on interest payments made by a Luxembourg paying
agent amounts to
� 15 per cent. from 1 July 2005 until 30 June 2008,
� rising to 20 per cent. until 30 June 2011, and
� 35 per cent. thereafter.
A Luxembourg resident beneficial owner having suffered EU withholding tax on interest payments
made by an EU paying agent is entitled to a tax credit for 100 per cent. of the tax withheld.
Capital gains realized on the disposal of the Notes are not subject to withholding tax in Luxembourg.
47 For individual beneficial owners only. Residual entities can only opt for exchange of information.
335