Annual financial report 2013

This regime is currently governed by the Royal Decree of 07.12.2010 which

replaces the previous texts. The Law of 23.12.1994 regulated the taxation

impacts of the transformation into a Sicafi/Bevak.

The main characteristics of a public Sicafi/Bevak are as follows:

•

closed-end company;

•

stock exchange listing;

•

activity limited to real estate investment; as an ancillary activity, the

Sicafi/Bevak can invest its assets in listed securities;

•

possibility for the Belgian subsidiaries of the public Sicafi/Bevak to

be approved as an institutional Sicafi/Bevak;

•

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

assets invested in a single property;

•

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

company’s 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 asset 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 gains

on realised disposals of real estate 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. No

withholding tax is deducted for non-resident investors which are not

engaged in a profit-making activity.

Companies applying for the public or institutional Sicafi/Bevak status,

or which merge with a Sicafi/Bevak, 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 a supplementary

crisis contribution of 3%, giving a total of 16.995%). Cofinimmo obtained its

Sicafi/ Bevak status on 01.04.1996.

INSTITUTIONAL FIXED CAPITAL REAL ESTATE INVESTMENT

TRUST UNDER BELGIAN LAW

The institutional Sicafi/Bevak, introduced by the Royal Decree of

07.12.2010, is a light version of the public Sicafi/Bevak. It enables the

public Sicafi/Bevak to extend the taxation characteristics of its legal

form to its subsidiaries and to undertake specific partnerships and pro-

jects with third parties. The institutional Sicafi/Bevak status is acquired

upon registration with the FSMA.

Its status is governed by the Royal Decree of 07.12.2010, the Law of

03.08.2012 on Collective Investment Undertakings and the Company Code.

The main characteristics of the institutional Sicafi/Bevak are as follows:

•

non-listed company controlled by a public Sicafi/Bevak;

•

registered shares held by institutional or public investors;

•

no diversification or debt ratio requirement (consolidation with

public Sicafi/Bevak);

•

dividend distribution obligation;

•

owned jointly or exclusively by a public Sicafi/Bevak;

•

exclusive purpose of investment in real estate assets;

•

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

being appraised by the public Sicafi/Bevak’s expert;

•

statutory accounts drawn up in accordance with IFRS regulations

(same accounting scheme as the public Sicafi/Bevak);

•

strict rules on operations and conflicts of interest;

•

subject to auditing by the FSMA.

THE “SOCIETE D’INVESTISSEMENT IMMOBILIER COTEE” (SIIC)

The “Société d’Investissement Immobilier Cotée” (SIIC) fiscal regime, intro-

duced by the Finance Law for 2003 No. 2002-1575 of 30.12.2002 author-

ises the creation in France of real estate companies subject to a specific

tax regime, similar to the Sicafi/Bevak 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 85%

of the profits from its

property lettings.

The main characteristics of the SIIC regime are as follows:

•

exemption from corporate tax on the fraction of the profit arising from

i) property lettings, 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 acticity, 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;

•

profit distribution obligation: 85% of the exempted profits arising from

rental income, 50% 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 rate of 19% on unrealised capital gains relating to properties

held by the SIIC or its subsidiaries having opted for the SIIC regime

and to the shares of companies not subject to corporate tax.

Calculated according to the schemes appearing in chapters 3 and 4 of Annex C of the Royal Decree of 07.12.2010.

Formerly Cofinimmo France SA.

Obligation to distribute 95% of its profits arising from the letting of property assets as from 2014.

As from 2014: 95% of the exempted profits arising from ental income and 60% of the exempted profits arising from the disposal of properties, shares in companies and subsidiaries

subject to the SIIC regime.

Standing Document /

General Information

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