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Special taxation regime applicable to the merger
Some taxation provisions are specifically applicable to the GDF SUEZ merger. Please note, there will not be any specific impact in taxation terms for existing Gaz de France shareholders.
Tax regime applicable to the distribution of the SUEZ ENVIRONNEMENT shares
France’s Direction générale des impôts [tax authority] originally granted SUEZ an agreement in principle over the taxation neutrality of the distribution of shares in SUEZ ENVIRONNEMENT company to shareholders who are French residents. After reviewing the final documents of the operation, Direction générale des impôts provided its final seal of approval to SUEZ as per article 115-2 of France’s Code général des impôts [tax laws]. The cost of acquisition of the SUEZ ENVIRONNEMENT shares shall be deemed to be “nil” on the date of their allocation for beneficiaries who are natural persons. If and when the shares are sold on, the entire price shall therefore in principle be deemed to constitute capital gains and shall be taxed as such at a rate of 29% in the case of any sales in excess of the threshold of 25,000 euros per annum per consolidated household for tax purposes in 2008. If it proceeds as part of an employee savings plan, the operation shall be deemed to be neutral from a taxation point of view (excluding the CSG/CRDS mandatory contributions).
Tax regime applicable to the GDF SUEZ merger operation
The merger operation shall be deemed to be neutral from a taxation point of view for French residents. Thus:
- There will not be any immediate taxation of latent capital gains, nor any immediate deduction of latent capital losses, nor will the exchange of shares be taken into consideration when calculating the yearly threshold of share transfers.
- The capital gains will only be taxed, in case of a sale in 2008 of the GDF SUEZ shares received pursuant to the merger, if the total transfers of securities in the year exceed 25,000 euros (per consolidated household for tax purposes). In general, the capital gains (or capital loss, if any) will be calculated based on the break-even cost for tax purposes of the SUEZ shares exchanged as part of the merger.
- Shareholders are advised to retain any transaction notes in connection with purchases of SUEZ shares in order to be able to provide evidence for their tax calculations upon a sale of the GDF SUEZ shares received in exchange. This neutrality from a taxation point of view also applies to shares which are registered in an employee savings account if the GDF SUEZ shares that are received are eligible for incorporation into an employee savings account.