Cofinimmo - Annual Financial Report 2014

206

STANDING DOCUMENT /

General information

of the Executive Committee” in the chapter “Corporate

Governance Statement”.

DECLARATION CONCERNING INFORMATION

FROM THIRD PARTIES

The information published in this Annual Financial Report provided

by third parties, such as the report by the real estate experts and

the Statutory Auditor’s report, has been included with the consent

of the person who has vouched for the content, form and context

of this part of the registration document. This information has been

faithfully reproduced and, as far as the Board of Directors knows

and is able to ensure in the light of data published by this third

party, no facts have been omitted that might render the repro-

duced information incorrect or misleading.

HISTORICAL FINANCIAL INFORMATION

REFERRED TO BY REFERENCE

The Annual Financial Reports of the past five years - namely those

of the financial years 2012 and 2013 which are included as refer-

ence in this Annual Financial Report - which comprise the com-

pany annual accounts, the consolidated annual accounts and

the Statutory Auditor’s reports, as well as the Half-Yearly Financial

Reports, can be consulted on the website

www.cofinimmo.com.

FISCAL REGIMES

THE PUBLIC REGULATED REAL ESTATE COMPANY

(RREC)

The public Regulated Real Estate Company (RREC) has a similar

status than the one existing in numerous countries: Real Estate

Investment Trusts (REITs) in the US, Fiscale Beleggingsinstellingen

(FBI) in the Netherlands, G-REITs in Germany, Sociétés d’Investisse-

ments Immobiliers Cotées (SIIC) in France and UK-REITs in the UK.

This regime is currently governed by the Law of 12.05.2014 and

the Royal Decree of 13.07.2014 regarding Regulated Real Estate

Companies

The main characteristics of the RREC are:

•

closed-end company;

•

stock exchange listing;

•

activity consisting of providing buildings to users; as an

ancillary activity, the RREC can invest its assets in listed

securities;

•

possibility for the Belgian subsidiaries of the public RREC to be

approved as institutional RREC;

•

diversification of risk: no more than 20% of the consolidated

property portfolio invested in a single property;

•

consolidated debt limited to 65% of the market value of the

assets; the amount of mortgages and other securities is limited

to 50% of the total fair value of the properties and to 75% of the

value of the mortgaged property;

•

very strict rules governing conflicts of interest;

•

regular valuation of the property portfolio by independent real

estate experts;

•

properties recognised at their fair value;

•

no depreciation;

•

results (rental income and capital gains on sales less operating

expenses and financial charges) are exempt from corporate

tax;

•

at least 80% of the sum of the corrected result and the net

realised gains on disposals of property assets not exempted

from the compulsory distribution are subject to a compulsory

distribution; the decrease in debt during the year can however

be subtracted from the amount to be distributed;

•

withholding tax of 25% for physical persons residing in Belgium.

Companies applying for the public or institutional RREC status,

or which merge with a RREC, are subject to an exit tax, which is

treated in the same way as a liquidation tax, on net unrealised

gains and on tax-exempt reserves, at a rate of 16,5% (increased by

an additional crisis contribution of 3%, giving a total of 16.995%).

Cofinimmo obtained its RREC status on 26.08.2014. Until then and

since 01.04.1966, it benefitted from the Sicafi/Bevak status.

INSTITUTIONAL REGULATED REAL ESTATE COMPANY

UNDER BELGIAN LAW

The institutional RREC, introduced by the Law of 12.05.2014 and the

Royal Decree of 13.07.2014, is a light version of the public RREC. It

enables the public RREC to extend the taxation characteristics of

its legal form to its subsidiaries and to undertake specific partner-

ships and projects with third parties. The institutional RREC status

is acquired upon registration with the FSMA.

The main characteristics of the institutional RREC are:

•

non-listed company controlled by a public RREC;

•

registered shares held by eligible investors;

•

no diversification or debt ratio requirement (consolidation at

public RREC level);

•

dividend distribution obligation;

•

owned jointly or exclusively by a public RREC;

•

exclusive purpose of providing buildings to users;

•

no obligation to appoint a real estate expert, the real estate

assets being appraised by the expert of the public RREC;

•

statutory accounts drawn up in accordance with IFRS

regulations (same accounting scheme as the public RREC);

•

strict rules on operations and conflicts of interest;

•

subject to auditing by the FSMA.

THE “SOCIÉTÉ D’INVESTISSEMENTS IMMOBILIERS

COTÉE” (SIIC)

The “Société d’Investissements Immobiliers Cotée” (SIIC) fiscal

regime, introduced by the Finance Law for 2003 No. 2002-1575 of

30.12.2002 authorises the creation in France of real estate com-

panies subject to a specific tax regime, similar to that of the RREC

regime in Belgium.

Cofinimmo opted for the SIIC regime on 04.08.2008, Cofinimmo

Investissements et Services and its subsidiaries on 23.01.2009.

This regime allows Cofinimmo to benefit, for its French branch and

subsidiaries, from an exemption from corporate tax on its rental

income and realised gains in return for an obligation to distribute

95% of the profits from the letting of its properties.

The main characteristics of the SIIC regime are:

•

exemption from corporate tax on the fraction of the profit

arising from i) the letting of buildings, ii) capital gains on

property disposals, iii) capital gains on disposals of shares

in subsidiaries having opted for the SIIC regime or in other

companies with a similar purpose, iv) proceeds distributed

by their subsidiaries having opted for the SIIC regime, and

v) shares in profits of companies engaged in a real estate

activity;

•

results distribution obligation: 95% of the exempted profits

arising from rental income, 60% of the exempted profits

arising from the disposal of properties, shares in companies

and subsidiaries subject to the SIIC regime, and 100% of the

dividends distributed to them by their subsidiaries subject to

corporate tax having opted for the SIIC regime;

•

when opting for the SIIC regime, payment over four years of an

exit tax at the reduced rate of 19% on unrealised capital gains

relating to properties and shares of companies not subject to

corporate tax held by the SIIC or its subsidiaries having opted

for the SIIC regime.

Cofinimmo’s adoption date of the RREC status is 06.11.2014.