Common use of Non-Residents Clause in Contracts

Non-Residents. Non-residents who use the Bonds to exercise a professional activity in Belgium through a permanent establishment are in principle subject to the same tax rules as the Belgian resident companies (see above). Bondholders who are non-residents of Belgium for Belgian tax purposes, who are not holding the Bonds through a permanent establishment in Belgium and who are not investing in the Bonds in the course of their Belgian professional activity, will normally not incur or become liable for any Belgian tax on income or capital gains by reason only of the acquisition, ownership, redemption or disposal of the Bonds, provided that they qualify as Eligible Investors and that they hold their Bonds in an X- account. This being said, under a strict reading of Article 228, §3, ITC (new), capital gains realized on the Bonds by Belgian non-residents could, however, be subject to Belgian taxation, levied in the form of a professional withholding tax, if the following 3 conditions are cumulatively met: (i) the capital gain would have been taxable if the non-resident were a Belgian tax resident, (ii) the income is “borne by” a Belgian resident (including a Belgian establishment of a foreign entity) which would, in such a context, mean that the capital gain is realized upon a transfer of the Bonds to a Belgian resident (including a Belgian establishment of a foreign entity) and (iii) Belgium has the right to tax such capital gain pursuant to the applicable double tax treaty, or, if no such tax treaty applies, the non- resident does not demonstrate that the capital gain is effectively taxed in its state of residence. However, it is unclear whether a capital gain included in the purchase price of an asset can be considered to be “borne by” the purchaser of the asset within the meaning of the second condition mentioned above. Furthermore, this tax requires that the Belgian resident purchaser is aware of (i) the identity of the Belgian non-resident (to assess the third condition mentioned above) and (ii) the amount of the capital gain realized by the Belgian non-resident (as such amount determines the amount of professional withholding tax to be levied by the Belgian purchaser). Consequently, the application of this tax on transactions with respect to the Bonds occurring on the regulated market of Euronext will give rise to practical difficulties as the seller and purchaser typically do not know each other. Non – resident investors that would potentially be caught by Article 228, §3 ITC (new), are advised to consult their own tax advisors so to understand the impact hereof on their particular situation.

Non-Residents. Non-residents who use the Bonds to exercise a professional activity in Belgium through a permanent establishment are in principle subject to the same tax rules as the Belgian resident companies (see above). Bondholders who are non-residents of Belgium for Belgian tax purposes, who are not holding the Bonds through a permanent establishment in Belgium and who are not investing in the Bonds in the course of their Belgian professional activity, will normally not incur or become liable for any Belgian tax on income or capital gains by reason only of the acquisition, ownership, redemption or disposal of the Bonds, provided that they qualify as Eligible Investors and that they hold their Bonds in an X- X-account. This being said, under a strict reading of Article 228, §3, ITC (new), capital gains realized on the Bonds by Belgian non-residents could, however, be subject to Belgian taxation, levied in the form of a professional withholding tax, if the following 3 three conditions are cumulatively met: (i) the capital gain would have been taxable if the non-resident were a Belgian tax resident, (ii) the income is “borne by” a Belgian resident (including a Belgian establishment of a foreign entity) which would, in such a context, mean that the capital gain is realized upon a transfer of the Bonds to a Belgian resident (including a Belgian establishment of a foreign entity) and (iii) Belgium has the right to tax such capital gain pursuant to the applicable double tax treaty, or, if no such tax treaty applies, the non- non-resident does not demonstrate that the capital gain is effectively taxed in its state of residence. However, it is unclear whether a capital gain included in the purchase price of an asset can be considered to be “borne by” the purchaser of the asset within the meaning of the second condition mentioned above. Furthermore, this tax requires that the Belgian resident purchaser is aware of (i) the identity of the Belgian non-resident (to assess the third condition mentioned above) and (ii) the amount of the capital gain realized by the Belgian non-resident (as such amount determines the amount of professional withholding tax to be levied by the Belgian purchaser). Consequently, the application of this tax on transactions with respect to the Bonds occurring on the regulated market of Euronext will give rise to practical difficulties as the seller and purchaser typically do not know each other. Non – resident investors that would potentially be caught by Article 228, §3 ITC (new), are advised to consult their own tax advisors so to understand the impact hereof on their particular situation.

Non-Residents. Non-residents who use the Bonds to exercise a professional activity in Belgium through a permanent establishment are in principle subject to the same tax rules as the Belgian resident companies (see above). Bondholders who are non-residents of Belgium for Belgian tax purposes, who are not holding the Bonds through a permanent establishment in Belgium and who are not investing in the Bonds in the course of their Belgian professional activity, will normally not incur or become liable for any Belgian tax on income or capital gains by reason only of the acquisition, ownership, redemption or disposal of the Bonds, provided that they qualify as Eligible Investors and that they hold their Bonds in an X- account. This being said, under a strict reading of Article 228, §3, ITC (new), capital gains realized on the Bonds by Belgian non-residents could, however, be subject to Belgian taxation, levied in the form of a professional withholding tax, if the following 3 three conditions are cumulatively met: (i) the capital gain would have been taxable if the non-resident were a Belgian tax resident, (ii) the income is “borne by” a Belgian resident (including a Belgian establishment of a foreign entity) which would, in such a context, mean that the capital gain is realized upon a transfer of the Bonds to a Belgian resident (including a Belgian establishment of a foreign entity) and (iii) Belgium has the right to tax such capital gain pursuant to the applicable double tax treaty, or, if no such tax treaty applies, the non- resident does not demonstrate that the capital gain is effectively taxed in its state of residence. However, it is unclear whether a capital gain included in the purchase price of an asset can be considered to be “borne by” the purchaser of the asset within the meaning of the second condition mentioned above. Furthermore, this tax requires that the Belgian resident purchaser is aware of (i) the identity of the Belgian non-resident (to assess the third condition mentioned above) and (ii) the amount of the capital gain realized by the Belgian non-resident (as such amount determines the amount of professional withholding tax to be levied by the Belgian purchaser). Consequently, the application of this tax on transactions with respect to the Bonds occurring on the regulated market of Euronext will give rise to practical difficulties as the seller and purchaser typically do not know each other. Non – resident investors that would potentially be caught by Article 228, §3 ITC (new), are advised to consult their own tax advisors so to understand the impact hereof on their particular situation.