Statement - update
Brussels, 18 February 2016 (update from statement of 23 February 2015)
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KBC Tax Rulings in Belgium: to provide clarification on interpretation of tax rules
In 2012, KBC Asset Management obtained a number of tax rulings providing clarity and certainty on the tax qualification of investment products it issued.
KBC Bank and KBC Group have also received several tax rulings.
During the financial crisis, KBC Bank was obliged to grant a debt waiver to KBC Investments Ltd. In a decision taken in April 2010, the Ruling Commission agreed to this debt waiver being deducted from taxes.
KBC Bank and KBC Group also received several tax rulings on the tax treatment of hybrid financial instruments they issued (qualifying as equity for regulatory purposes):
In a ruling in April 2009, KBC Group received confirmation that the payments on the yield enhanced securities (YES) subscribed by the Flemish Regional Government should be considered for tax purposes as dividend payment.
In a ruling in January 2013, KBC Bank received confirmation that the interest payments on its contingent capital securities (CoCo) were tax deductible.
In a ruling in March 2014, the Ruling Commission confirmed that the payments on the Additional Tier-1 notes issued by KBC Group and the payments on the mirroring Additional Tier-1 loan between KBC Group and KBC Bank, should be treated as tax deductible interest. In response to media coverage on this ruling, KBC published a statement on its website (www.kbc.com) on 27 March 2014 clarifying the nature of this ruling request. In its application, KBC asked for similar tax treatment to that decided on by the local tax authorities in many other European countries following publication of the stricter requirements for Basel III instruments. This treatment has already been formally approved by the local authorities in the UK, France and Spain for the financial institutions established in those countries. Based on those local rules, other European banks have already issued Additional Tier-1 instruments. All KBC has done in Belgium is request similar treatment to avoid a competitive disadvantage relative to foreign players operating in Belgium.
In October 2015, KBC Bank NV obtained a ruling confirming tax treatment of the liquidation loss it suffered upon closing its US subsidiary KBC Financial Holding Inc.
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KBC Tax Rulings in Luxembourg
In 2006, KBC Asset Management SA obtained a ruling allowing for tax goodwill related to the financial and fund management expertise that was available in the entity. The goodwill amount is regularly recalculated based on current market conditions and market valuation in the Luxembourg fund management market. This ruling expires in 2016.
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KBC Tax Rulings in the UK
In November 2010, KBC Investments Ltd entered into an agreement with the UK tax authorities (HMRC) on the debt waiver granted by KBC Bank NV in April 2010 (see item 1 above 'KBC tax rulings in Belgium')
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KBC Tax Rulings in Hungary
In Hungary, a number of rulings were concluded in order to agree on the tax treatment of corporate restructurings, especially mergers.
Besides these rulings, K&H also received two rulings that relate to VAT.
- Other countries
There are no rulings with the Czech, Slovak, US or Irish tax authorities. Bulgarian tax legislation does not contain a rulings procedure.
For more information, please contact:
Wim Allegaert, General Manager, Investor Relations, KBC Group Tel +32 2 429 50 51 - E-mail: wim.allegaert@kbc.be
Viviane Huybrecht, General Manager, Corporate Communication/Spokesperson, KBC Group Tel +32 2 429 85 45 - E-mail: pressofficekbc@kbc.be
KBC Group NV Havenlaan 2 - 1080 Brussels Viviane Huybrecht General Manager Corporate Communication /Spokesperson Tel. +32 2 429 85 45 | Press Office Tel. +32 2 429 65 01 Stef Leunens Tel. +32 2 429 29 15 Ilse De Muyer Fax +32 2 429 81 60 E-mail: pressofficekbc@kbc.be | KBC press releases are available at www.kbc.comor can be obtained by sending an e-mail to pressofficekbc@kbc.be Follow us on www.twitter.com/kbc_group |
KBC Group NV issued this content on 18 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 18 February 2016 10:03:04 UTC
Original Document: https://www.kbc.com/system/files/doc/newsroom/pressreleases/2016/20160218_Rulings_overview_update2016_ENG.pdf