Sector olivícola en el Perú

Taxation of Dividend Income and Capital Gains Taxation of Shareholders Tax Resident in Germany

Shares Held as Private Assets

Dividends and capital gains are—as a rule—taxed as investment income and are principally subject to a 25% flat tax (plus 5.5% solidarity surcharge thereon) that is discharged via withholding. As regards capital gains, the withholding tax is generally only deducted, where the shares are held in custody with a German custodian (German resident credit institutions, financial services institutions (including German permanent establishments of foreign institutions), securities trading companies or securities trading banks, in the following, “Disbursing Agent”).

The shareholder is taxed on the gross personal investment income, less the saver’s allowance ofA801 (or, for married couples filing jointly,A1,602). The deduction of income related expenses actually incurred is generally not possible. Private investors can apply to have their investment income assessed in accordance with the general rules on determining an individual’s tax bracket if this would result in a lower tax burden. An assessment is mandatory, where the shares that are disposed of were held in an account outside of Germany. In this case, the shareholder will be taxed on gross personal investment income, less the saver’s allowance ofA801 (or, for married couples filing jointly,A1,602), without deduction of income-related expenses actually incurred. If tax is initially withheld, it will be credited against the amount of personal income tax assessed against the shareholder.

Losses resulting from the disposal of shares can only be offset by capital gains from the sale of shares. If, however, a shareholder, or in the case of a gratuitous acquisition, the shareholder’s legal predecessor, directly or indirectly held at least 1% of the share capital of the Company at any time during the five years preceding the sale, 60% of any capital gain resulting from the sale are taxable at the marginal income tax rate (plus 5.5% solidarity surcharge thereon). Conversely, 60% of any capital loss are recognized for tax purposes.

Shares Held as Business Assets

If shares form part of a German business (including a German permanent establishment or a fixed base of a foreign business or the shares form part of business assets for which a permanent representative has been appointed), taxation depends on whether the shareholder is a corporation, sole proprietor or partnership (co- entrepreneurship). Irrespective of the legal form of the business investor, dividends are subject to a 25% withholding tax (plus 5.5% solidarity surcharge thereon). The withholding tax is credited against the respective shareholder’s final (corporate) income tax liability. To the extent the amount withheld exceeds the (corporate) income tax liability, the withholding tax will be refunded, provided that certain requirements are met.

Special rules apply to financial institutions (Kreditinstitute), financial services providers (Finanzdienstleis- tungsinstitute), financial enterprises (Finanzunternehmen), life insurance and health insurance companies, and pension funds.

(i) Corporations: For corporations, dividends and capital gains are, as a rule, effectively 95% tax exempt from corporate income tax (including solidarity surcharge). Business expenses actually incurred in connection with the dividends and capital gains are deductible for corporate income tax and—subject to certain restrictions—trade tax purposes.

Dividends are fully subject to trade tax, unless the shareholder holds at least 15% of the registered share capital of the Company at the beginning of the tax assessment period. In the latter case effectively 95% of the dividends are

also exempt from trade tax. Capital gains, however, are irrespective of the size of the shareholding 95% tax exempt from trade tax. Losses from the sale of shares are not tax deductible for corporate income tax and trade tax purposes. (ii) Sole proprietors (individuals): 60% of dividends and capital gains are taxed at the marginal personal income tax rate (plus 5.5% solidarity surcharge thereon) where the shares are held by an individual as business assets. Correspondingly, only 60% of business expenses related to the dividends and capital gains are deductible for income tax purposes (subject to general restrictions, if any).

If shares are held as business assets of a commercial permanent establishment located in Germany dividends are fully subject to trade tax, unless the sole proprietor holds at least 15% of the Company’s registered share capital at the beginning of the tax assessment period. In this case dividends are fully tax exempt from trade tax. As regards capital gains, only 60% of the gains are subject to trade tax. 60% of any losses from the sale of shares are tax deductible for income tax and trade tax purposes. All or part of the trade tax is generally credited as a lump sum against the sole proprietor’s income taxes.

(iii) Partnerships (co-entrepreneurships): For (corporate) income tax purposes, partnerships are principally transparent. Thus, (corporate) income tax will be assessed and levied only at the level of the partners considering the rules outlined above (subsection (i) and (ii)).

If shares are held as business assets of a commercial permanent establishment located in Germany dividends and capital gains are subject to trade tax at the level of the partnership considering the trade tax rules applicable to the partner holding the interest in the relevant partnership. As regards the question, whether the participation threshold of 15% discussed in subsection (i) and (ii) above is reached, the shareholding of the partnership is authoritative.

If the partner is an individual, all or part of the trade tax the partnership pays on his or her stake in the partnership’s income is credited as a lump sum against his or her personal income tax liability.

Taxation of Shareholders not Tax Resident in Germany

Dividends received by a foreign tax resident shareholder without a German business will be effectively subject to (final) German withholding tax at a rate of 25% (plus 5.5% solidarity surcharge thereon) that is deducted by the Company. A foreign corporate shareholder can, however, apply—subject to certain conditions—for a reduction of the German withholding tax down to 15% (plus a 5.5% solidarity surcharge thereon) under German domestic tax laws.

Where dividends are distributed to a company domiciled in another member state of the EU within the meaning of Article 3(1)(a) of the Parent-Subsidiary Directive (EC Directive 90/435/EEC of the Council dated July 23, 1990, as amended), the withholding tax may be waived or is refunded upon application, provided that the relevant shareholder holds at least 10% of the registered share capital (Grundkapital) of the Company and additional requirements are met.

In addition, double taxation treaties may provide for additional relief. In order to obtain a refund of or exemption from withholding tax additional requirements must be met and the relevant shareholder has to submit an application (in line with official application forms) with the German Federal Central Office of Taxation (Bundes- zentralamt fu¨r Steuern, Hauptdienstsitz Bonn-Beuel), An der Ku¨ppe 1, 53225 Bonn, Germany.

Capital gains are only taxable in Germany, (i) where the shares are allocable to a permanent establishment/ permanent representative of the seller or where the seller or, (ii) in the case of a gratuitous transfer, any of the seller’s legal predecessors has held, directly or indirectly, at least 1% of the Company’s registered share capital at any time during the five years preceding the sale. If the shareholder is a corporation at most 5% of the capital gains from a sale of shares are effectively subject to corporate income tax plus solidarity surcharge thereon; if the shareholder is an individual 60% of the capital gains from a sale of shares are taxable. The tax is assessed by way of a formal assessment procedure. However, applicable double taxation treaties may provide for a relief from German taxation in these cases.

Withholding tax on capital gains at a rate of 25% (plus 5.5% solidarity surcharge thereon) is levied, if the capital gains are taxable in Germany (compare above) and the shares are held in custody with a Disbursing Agent. It is—as a rule—imposed on the excess of the proceeds from the sale (after deduction of directly related expenses) over the book value or acquisition costs (as the case may be) of the shares. However, according to a decree of the German Federal Ministry of Finance, this withholding tax on capital gains is not levied in case of (ii) above.

Deduction of Withholding Tax

Under German law, the Company as issuer of the shares assumes responsibility for the withholding of taxes at the source with respect to the deduction of withholding tax from dividends paid on the shares, whereas there is no obligation for the Company to withhold tax from capital gains realized upon disposal of the shares.