1. the EU Savings Tax Directive Roberth Josefsson

2. 2 The EU Savings Tax Directive Information update and cover letter – Will be sent to all clients (individuals) end of January – Cover letter - 2 different letters 1 Non-EU citizens living outside the EU 1 EU citizens living outside the EU (tax residence certificate required) 2 Non-EU citizens living inside the EU 2 EU citizens living inside the EU – Joint accounts - separately treated if different addresses – Corporate and trust accounts - excluded and will not receive anything

3. 3 The EU Savings Tax Directive First page – Based on the Luxembourg implementation - rules may differ between the EU Member States and other affected countries – Unclear issues - Switzerland referendum. Other implementation technicalities Background on the directive – Exchange of information Effect from 1 July 2005 – See first page

4. 4 The EU Savings Tax Directive Banking secrecy or exchange of information – In EU only Luxembourg, Belgium and Austria will apply withholding tax – 3 different methods: 1 withholding tax - no exchange of information 2 exchange of information - only information on interest income. No information on other income or assets 3 certificate - obtained from local authority. Certificate with name, address, bank, account number and/or specific securities concerned. UK will allow for such certificates. Note: method 3 will not lead to exchange of information – Method 2 & 3: no withholding tax

5. 5 The EU Savings Tax Directive Where does the EU savings directive apply? – Switzerland, Monaco, Andorra, Liechtenstein and San Marino - withholding tax – Isle of Man & Channel Islands - withholding tax – Most Caribbean territories - withholding tax – Cayman Islands & Gibraltar - exchange of information Who is affected? – Physical persons resident in the EU – EU citizens in non-EU Countries that became clients after 1 Jan 04 - tax residence certificate required – Another country - must be a cross border transaction

6. 6 The EU Savings Tax Directive Procedure - withholding tax – Tax is withheld when interest is credited to the account investment funds are redeemed/sold not taxed on accrual basis – Luxembourg tax authority will collect and administer the withholding tax. Luxembourg will keep 25% - 75% to the country of residence Which investments are affected – Bonds - Denmark, UK and France have made additional issues on government bonds – Structured products - only guaranteed yield will be inside scope – Pools - still uncertain. Probably treated as funds

7. 7 The EU Savings Tax Directive Which investments are affected (cont.) Investment funds – Investment policy & underlying investments decide treatment – SICAV part II outside scope, e.g. funds that may have leveraged investments, etc. Attractive compared to similar funds in other jurisdictions – Distributing funds - 15% threshold in Luxembourg – Accumulation funds - 40/60% rule – Funds outside the EU - still uncertain treatment. May be treated differently in different EU countries

8. 8 The EU Savings Tax Directive Investments not affected – Life assurance - outside scope, the insurance company owns the assets – Companies & trusts - outside scope. Be careful about certain trusts Nordea products – SAFE products reaching beyond 1 July 05 - not any guaranteed yield. Therefore, outside scope Matrix – Based on a payment from Nordea in Luxembourg to a client not living in Luxembourg QUESTIONS?