The document summarizes key aspects of the Dutch Dividend Tax Act of 1965, including: 1) Who is subject to Dutch dividend tax - those entitled to returns from shares in Dutch resident NVs, BVs, open CVs and other entities with capital divided into shares. 2) What is subject to Dutch dividend tax - profits distributions, permanent share buybacks, liquidation surpluses, bonus shares, and repayments of share premiums or "interest" on hybrid loans. 3) Tariff and exemptions - the domestic rate is 15% but can be reduced to 8.3% or 0% in some cases, such as if the recipient qualifies for the Dutch participation exemption

1. Dutch Dividend Tax Act 1965 Jeroen van der Linden March 17, 2011

2. Contents Who are subject? What is subject? Tariff and exemptions Dividendstripping

3. Who are subject - Who are subject to Dutch dividend tax? Thosewho are entitled to the return of shares in, profitcertificatesorhybridloansfromDutch resident: - NV’s, - BV’s, - Open CV’s and - otherentitieswhosecapital is dividedintoshares. 1/3

4. Who are subject Dutch cooperatives are notmentioned in the Dutch dividend tax act, however… Itshouldby all meansbeavoidedthatcooperatives are comparedwith“otherentitieswhosecapital is dividedintoshares” on the basis of case law. 2/3

5. Who are subject If the entity was incorporatedunder Dutch law, it is deemed to be Dutch resident for Dividend taxpurposes. As a result, Dutch dividend tax claim canremain even if Dutch company was movedabroad. 3/3

6. Example – deemedresidency Ubo (CH) Holding BV Curacao 15% or 0% Dutch divtax ? Intermediaty Holding BV Netherlands 8.3% Dutch divtax

7. What is subject - What is subject to Dutch dividend tax? Profits distributions (i.e. dividend); Permanent sharebuy back; Liquidation surplus; and 1/2

8. What is subject - What is subject to Dutch dividend tax (Cont’d)? Bonus shares; Repayment of sharepremium in case of profit; “Interest” paidonhybridloans. 2/2

9. Tariff and exemptions The Domesticrate is 15% to bewithheldby the Dutch company; Credit of 3% is availableforforeign dividend taximposedbyqualifyingsubsidiaries.

10. Example - credit Holding NV NA 8.3% or 5.3% Dutch divtax ? Dutch BV TurkishOpco 10% Turkishdivtax

11. Tariff and exemptions - Exemptions apply: Ifrecipientcanapply the Dutch participationexemption If EU recipientcouldapply the Dutch participationexemption as ifhewouldberesiding in the Netherlands

12. Example - exemption Luxcoowns 100% in Dutch BV Luxemburg holding company 0% Dutch divtax ? Dutch BV TurkishOpco 10% Turkishdivtax

13. Tariff and exemptions - Exemptions apply (Cont’d): Ifpayingentity and recipientformfiscalunity; Ifrecipient is a qualifyinginvestmentcompanyor (green) fundthatpromotescertainsustainableprojects.

14. Dividendstripping - What is it? A shareholder withno(orlimited) right forcompensation of dividend tax provides for anotherperson to receive the dividend whodoes have the right to set off dividend tax in the exchange for the equivalent of the dividend

15. Example - dividendstripping Private individual Abroad 15% dividend tax BV The Netherlands Dividend distribution 100 Dividend tax 15 Net 85 1/3

16. Example - dividendstripping Private individual Abroad Sale to another group company BV The Netherlands Sale cum dividend 100 Net 100 2/3

17. Example - dividendstripping Private individual Abroad 0% dividend tax SRL BV 0% dividend tax 100% The Netherlands 3/3

18. Example - dividendstripping Private individual Private individual Abroad Abroad Sale to bank in NL 15% dividend tax 3% 3% Dividend NV NV The Netherlands The Netherlands Dividend distribution 28 Dividend tax 3,5 Net 24,5 Sale cum dividend 128 Repurchase ex dividend 100 Net 28

19. Dividendstripping - Examples of situationswherebydividendstrippingcanberecognised: Sale shares in Dutch listedcompanies to bank Lending of shares Sale and repurchase (call- and putoptions) Hangingwithin concern Intermediate holding company

20. Example - intermediate holding Canada Ltd 0% dividend tax 10% dividend tax Cyprus Ltd 0% dividend tax NL BV

21. Example - intermediate holding B CH 0% dividend tax Cyprus Ltd 15% dividend tax 0% dividend tax NL BV

22. Dividendstripping - Measuresagainstdividendstripping: Introductiondefinitionbeneficialowner Sanction: reversingreductionorexemption to domestictariffof 15%

23. Dividendstripping - When is a personnotconsidered to be a beneficialowner? Recipientperforms a service which is a part of severaltransactions In exchange for the income Whichincomewillactuallybereceivedby the holder of the restricted right and Thisholderkeepsitspositionin the company

24. Example – beneficialownership NA NV 0% Pleasenote; Whensanctionthen 15% DT Malta 8,3% 0% BV

25. NV1 COÖP NV2 BV sale NV2 loosesit’scurrentposition, consequentlynosanction Example – beneficialownership

26. Dividendstripping - Bonafide cases Bonafide purchaseron the stock exchange Bonafide withholding agent (basedondeclarationrecipient of dividend) Durablereorganisationcombinedwithanordinary dividend distribution

27. Dividendstripping - Durablereorganisation Time betweenreorganisation and dividend distribution Type of dividend distribution Durablenessreorganisation Safe Harbour: In case of durablereorganisation in combinationwithanordinary dividend distribution irrespectiveof the time betweenreorganisation and dividend distribution

28. The End