QUESTIONS / ANSWERS
:: Eutelsat Communications and the Stock Exchange
:: Eutelsat Communications and Dividends and Taxation
:: Eutelsat Communications and its Organisation
Eutelsat Communications : Dividends and Taxation
> What was the amount of the dividend proposed to the Shareholders' Meeting on November 10, 2008?> When was the pay-out date?
> What is the history of dividends paid?
> What tax treatment will be applied to the per share distribution?
> What tax treatment will be applied to dividends?
> What is the tax treatment that will apply to capital gains on the sale of shares?
> What is the share value that should be reported for the purposes of French wealth tax?
What was the amount of the dividend proposed to the Shareholders' Meeting on November
10, 2008?
Eutelsat Communications does not pay out a dividend but proposes to distribute a per share
amount taken from the “Share Premium”. The Shareholders’ Meeting of November 10, 2008
approved the distribution of 0.60 € euro per share, representing a pay-out ratio of 76.5% of the Group's share of net consolidated income.
When was the pay-out date?
The pay-out date was November 13, 2008 after approval by the Shareholders’ Meeting of November
10, 2008.
What is the history of dividends paid?
For financial year 2005-2006 an amount of 0.54 euro was distributed per share.
For financial year 2006-2007 an amount of 0.58 euro was distributed per share.
For financial year 2007-2008 an amount of 0.60 euro was distributed per share.
What tax treatment will be applied to the per share distribution?
As Eutelsat Communications does not pay out a dividend but proposes to distribute a per share
amount taken from the “Share Premium”, this will not be considered as a dividend payment.
There is no withholding tax for non-residents, nor any tax payable in France.
For French residents, the distribution decreases the acquisition price and therefore, may
potentially increase your capital gain when you resell your shares.
Shareholders are advised that they should contact their tax advisers and declare this income in
their country of residence to the relevant tax authorities.
What tax treatment will be applied to dividends?
- For French tax residents:
- A system of a 40% tax deduction in respect of distributed income: distributed income is subject to personal income tax (impôt sur le revenu des personnes physiques - IRPP) in respect of 60% of the amount of such income,
- Fixed annual standard tax deduction: €1,525 for single, divorced or widowed taxpayers or €3,050 for married couples filing joint tax returns or those having entered into a French form of civil partnership agreement (PACS) also filing joint tax returns,
- Annual tax credit: an annual tax credit is granted equal to 50% of the amount of the
dividends and amounting to a maximum of €115 or €230 depending on family status.
- For non-French tax residents:
The taxes that will apply depend on the shareholder's place of residence and whether or not his/her State of residence has signed an international tax treaty with France aimed at limiting double taxation.
Where France has signed a tax treaty with the shareholder's country of residence, the amount of the dividend will be calculated on the basis of the documents sent to the shareholder's custodian (TCC):- it will be subject to withholding tax at the rate of 25% where no document is submitted before the date of the dividend payment,
- it will be subject to withholding tax at the tax treaty rate if the shareholder sends to its custodian (TCC), prior to the date of payment of the dividend, a certificate of tax residence, duly completed and signed by the shareholder and also signed by the tax authorities of the shareholder's country of residence (simplified procedure).
It should be noted that the standard form of tax certificate and the explanatory notes can be downloaded from the www.impots.gouv.fr website in French, English, German, Spanish, Italian and Dutch.
Where France has not signed a tax treaty with the shareholder's country of residence, the rate of withholding source applied will be 25% without any possibility of recovery.
What is the tax treatment that will apply to capital gains on the sale of shares?
Capital gains on the sale of shares are taxed where the gross amount of sales made during the
year by the taxpayer or joint taxpayers is equal to €20,000 or more (for 2007). Where this
threshold is crossed, the total amount of the capital gains generated becomes taxable (as from the
first euro). The capital gains will be taxed on the basis of a fixed percentage of 16%, plus 11% in
social security contributions and social levies, i.e. total taxation of 27% since 1st January 2005.
Further information about the tax deductions applied due to the length of the holding period for
the shares:
A tax deduction of one third per year of holding of the shares as from the sixth year is applied to
the net gain on the sale.
This treatment applies to sales of shares made as from 1 January 2006; the holding period is
however only calculated as from 1 January 2006 for shares purchased prior to that date.
Since 2006, the holding period is calculated on the basis of a full calendar year; shares purchased
during a year are deemed to have been held since the beginning of the year in question.
Accordingly, for shares purchased in 2006 or prior to 2006:
- A tax deduction may be made for the first time (equal to one-third of the tax payable) if the shares are sold in 2012,
- A tax deduction equal to two-thirds of the tax payable will be applied if they are sold in 2013,
- A complete tax exemption will only apply if the shares are sold as from 1st January 2014 and inasmuch as the shares have been retained for a period of at least eight years at such date.
What is the share value that should be reported for the purposes of French wealth tax?
You can choose to use:
- the closing trading price for the last stock market trading session in the previous year, or
- the average of the last 30 trading prices prior to 1 January of the past year.
DOWNLOADS
Facts & Figures (PDF, 470 KB)
Corporate Brochure (PDF, 1 MB)
Eutelsat Corporate Film, 11/08
