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Taxation of the linear bonds (OLOs) and the treasury certificates will
be governed by the Belgian tax regime specified by the law of 6 August 1993
concerning transactions in certain bonds ("Loi du 6 août 1993 relative aux opérations
sur certaines valeurs / Wet van 6 april 1993 betreffende de transacties met
bepaalde effecten") and the Royal Decree of 26 May 1994 on the deduction of
withholding tax ("Arrêté royal du 26 mai 1994 relatif à la perception et à
la bonification du précompte mobilier / Koninklijk besluit van 26 mei 1994 over
de inhouding en de vergoeding van de roerende voorheffing"), as amended, known
as the "X/N regime".
Capital gains and income tax
Investors who are not residents of the Kingdom for Belgian tax
purposes and are not holding the OLOs and the Treasury certificates through a Belgian
Establishment and do not conduct Belgian Professional Activities will not incur
or become liable for any Belgian tax on income or capital gains or other like
taxes by reason only of the acquisition, ownership or disposal of the OLOs and
the Treasury certificates provided that they hold their OLOs and Treasury
certificates in an Exempt Account.
Transfer tax
The acquisition or disposal of the OLOs and Treasury
certificates is not subject
to any Belgian stamp, value added of other transfer tax.
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Withholding tax
All payments by or on behalf of the Kingdom
of principal and interest on the OLOs and the Treasury certificates will be made without deduction
of Belgian withholding tax for the OLOs and the Treasury certificates held by certain eligible
investors (the "Eligible Investors") in an exempt securities account (an
"Exempt Account") with the clearing system operated by the National Bank of
Belgium ("NBB System") or with a Participant. Otherwise, withholding
tax will be applicable to the OLOs and the Treasury certificates at the rate of 15 per cent.
Eligible Investors are those entities
referred to in Article 4 of the Royal Decree of 26 May 1994 which include, inter
alios :
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all investors who are not residents of the
Kingdom for Belgian tax purposes. Collective investment undertakings governed by
foreign law which have joint assets managed by a management company on behalf of
the participants are only exempted only when their shares are not the subject of
a public issue in Belgium and are not marketed in Belgium. Non-resident
investors who are individuals or non-profit organisations are exempted provided
that they are not holding the OLOs and the TCs through a Belgian Establishment
("établissement belge/Belgische inrichting") within the meaning of Article 229
of the Belgian income tax code 1992 (the "Tax code") ("Code des Impôts sur les
revenues / Wetboek van de Inkomstenbelastingen 1992") and do not conduct
professional activities in the Kingdom as defined in Article 228, paragraph 2,
sub-paragraph 4 of the Tax Code ("Belgian Professional Activities");
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all Belgian resident corporate investors
validly formed as separate legal entities, including Belgian SICAVs/BEVEKs.
Eligible Investors do not include, inter
alios, Belgian resident investors who are individuals or certain non-profit
making organisations.
Upon opening of an Exempt Account with the
NBB System or with a Participant, an Eligible Investor is required to provide a
statement of its eligible status
in a form approved by the Minister of Finance. There are no ongoing declaration
requirements for Eligible Investors.
Participants are required to make annual
declarations to the NBB System as to the eligible status of each investor for
whom they hold the OLOs and the Treasury certificates in an Exempt Account. However, such
documentary requirements do not apply to the OLOs and the Treasury certificates held by Eligible
Investors in a securities account with Euroclear, Clearstream Luxembourg or any
intermediary which is a participant in Euroclear or Clearstream Luxembourg and
is not established in the Kingdom. Euroclear and Clearstream Luxembourg
hold Exempt Accounts in NBB and payments of principal and interest on the OLOs
and the Treasury certificates to holders of such accounts will, therefore, be paid without
deduction of Belgian withholding tax.
Stripped OLOs and OLO coupon strips may be
held only by Eligible Investors in an Exempt Account.
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+32 (0)257 472 23
