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Private equity investment company scheme

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TAXATION AT THE REDUCED RATE OF 10% ON INTEREST FROM SECURITIES GIVING

ACCESS TO CAPITAL

In addition to the almost total exemption for dividends (see § holdings), private equity companies benefit from a reduced tax rate of

10% for financial earnings and capital gains from securities “giving access to capital”. Specifically concerned by this reduced tax rate

are convertible bonds, bonds with warrants (OBSA), convertible bonds and/or exchangeable for new or existing shares (OCEANE), bonds

redeemable in shares (ORA), bonds with redeemable share subscription warrants (OBSAAR)...

NB: the reduced rate of 10% applies to the gross amount of interest received; expenses (management fees, costs of refinancing... ) remain deductible under ordinary

law for determining taxable income at the standard rate of 20%.

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TOTAL DEDUCTION OF FINANCIAL EXPENSES

Saint-Martin tax regulations do not contain any provision to prevent the deduction of financial expenses related to the acquisition of

shareholdings or securities.

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ABSENCE OF ANY WITHHOLDING TAX ON INTEREST FROM SAINT-MARTIN SOURCES

PAID TO NON-RESIDENTS

Interest paid to beneficiaries resident outside Saint-Martin does not give rise to the application of any withholding tax at the time of

payment.

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POSSIBILITY OF OFFSETTING WITHHOLDING TAX LEVIED ABROAD EVEN IN THE

ABSENCE OF A TAX TREATY

A company is paid interest during the year ended 31 December N, some of which is eligible for the reduced rate of 10% (interest from

countries A and B) according to the following table:

FOCUS ON

Country

of origin

Gross

amount

(1)

Tax levied in the

country of origin

(2)

Net income

(3)

Saint-Martin tax

on income

(4)

Tax credit applied to corporate tax

due in Saint-Martin

On corporate tax

due for the year N

(5)

On corporate tax for

the following years

(6)

Country A €400 000

€60 000

€340 000

€40 000

€400k x 10%

€28 000

€12 000

Country B €600 000

€120 000

€480 000

€60 000

€600k x 10%

€42 000

€18 000

Country C €200 000

€10 000

€190 000

€30 000

(€200k- €50k) x 20%

€7 000

€3 000

Country D €500 000

€100 000

€400 000

€60 000

(€500k – €200k) x 20%

€42 000

€18 000

Comments:

Column 4:

the amount of tax credit is in any event capped at the amount of Saint-Martin tax on the taxable income in question (difference between,

on the one hand, the gross amount mentioned in column 1 and, on the other hand, expenses deductible from income under Saint-Martin domestic

legislation such as management expenses and refinancing charges). For shares eligible for the reduced rate of 10% (Country A and Country B) such

charges are deemed to be nil.

Column 5

et

Column 6:

Tax deducted at the source in the foreign country, capped if appropriate (see Col 4), is offset for up to 70% of the amount of

corporate tax due under the year N; the balance (30%) increased, if appropriate, by the fraction that could not be offset under the year N, is carried forward

to following years indefinitely and for an unlimited amount.

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JUNE 2014 EDITION

VERY FAVORABLE CORPORATE TAX