Pegas Nonwovens dividend attracts Luxembourg tax rules

The payment to be distributed by PEGAS NONWOVENS S.A. to its shareholders in 2013 shall be subject to Luxembourg withholding tax. The withholding tax will be deducted at source by the Company from the Dividends paid to all shareholders with an exemption of shareholders meeting the participation exemption rules. The current withholding tax rate is 15%.

The Company prepared general guidelines for all shareholders regarding the withholding tax applicable to dividends distributed by PEGAS in 2013.

1. Withholding tax on dividends paid to shareholders, who are private individuals and non-residents in Luxembourg. The Company’s shareholders, who are private individuals and non-residents in Luxembourg are subject to Luxembourg withholding tax on dividends (current rate of 15%) without possibility for reduction or claim back unless there is a double tax treaty in force between Luxembourg and the shareholders’ country of residence.

These shareholders may be able to receive tax credit for the withholding tax suffered or exempt the dividend income depending on the tax regulations in the country of their residence.

2. Withholding tax on dividends paid to shareholders, who are legal entities and non-residents in Luxembourg. The Company’s shareholders, who are legal entities and non-residents in Luxembourg, may be entitled to a reduced withholding tax rate on dividends, if there is a double tax treaty in force between Luxembourg and the shareholders’ country of residence or by application of the Luxembourg participation exemption (described in section 3).

The benefit of a reduced or zero withholding tax rate applicable will be granted by the Luxembourg tax authorities provided that the non-resident shareholder can give evidence that he is the beneficial owner of the income derived from the shares held in the Company. A shareholder is generally considered as the beneficial owner if he receives dividends for his own benefit and not as an intermediary/depositary agent and if he can freely use his dividend income according to his needs.

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Pegas Nonwoven