TAX ON BONUSES

Cette présentation appartient à Sefico. Elle est protégée par le code de la propriété intellectuelle : toute reproduction ou diffusion est interdite sans autorisation. CONTENTS I - Introduction II - Tax on bonuses’ origins III - Who is concerned by this tax ? IV - Scope of the tax on bonuses V - The impacts VI - Conclusion

Cette présentation appartient à Sefico. Elle est protégée par le code de la propriété intellectuelle : toute reproduction ou diffusion est interdite sans autorisation. In 2009, the financial situation of French Banks get better. Most of them have generated excess profits due to the Government supports. Important bonuses are going to be paid to traders in Thus, the Government has decided to set up a one-off tax on 2009 bonuses. INTRODUCTION

Cette présentation appartient à Sefico. Elle est protégée par le code de la propriété intellectuelle : toute reproduction ou diffusion est interdite sans autorisation. January 2008 : Jérôme Kerviel’s scandal started a polemic on traders’ bonuses. October 2008 : Due to the financial crisis, the French Government injected banking system with 360 billion euro. TAX ON BONUSES’ ORIGINS

Cette présentation appartient à Sefico. Elle est protégée par le code de la propriété intellectuelle : toute reproduction ou diffusion est interdite sans autorisation. January 2009 : Banks promised to limit the payment of dividends and leaders bonuses. December 2009 : British Government set up a one-off tax on bonuses which would raise £550 million. December 2009 : Nicolas Sarkozy announced the setting up of a tax on bonuses. TAX ON BONUSES’ ORIGINS

Cette présentation appartient à Sefico. Elle est protégée par le code de la propriété intellectuelle : toute reproduction ou diffusion est interdite sans autorisation. All traders bonuses over 27,500 euro will be taxed at 50%. Only bonuses related to 2009 and paid in 2010 are concerned. WHO IS AFFECTED BY THIS TAX ?

Cette présentation appartient à Sefico. Elle est protégée par le code de la propriété intellectuelle : toute reproduction ou diffusion est interdite sans autorisation. All bonuses concerning traders who work in France will be taxed, whatever the way of attribution (cash or shares, immediate or deferred). Investment banking, private equity, hedge funds and traders who work abroad would not be affected by this tax. WHO IS CONCERNED BY THIS TAX ?

Cette présentation appartient à Sefico. Elle est protégée par le code de la propriété intellectuelle : toute reproduction ou diffusion est interdite sans autorisation. For the time being, this law is reviewed by the « Conseil d’Etat » for approval (Council of State). Bonuses must be taxed at the end of March It is a one-off tax, therefore it is applicable only for one year. Practical details are still unknown. SCOPE OF THE TAX ON BONUSES

Cette présentation appartient à Sefico. Elle est protégée par le code de la propriété intellectuelle : toute reproduction ou diffusion est interdite sans autorisation. The tax is estimated at 144,000 euro per trader and 2,500 employees are concerned. Thus, French Banks risk to be less attractive and traders might go abroad to earn better salaries. To avoid traders leaving, French Banks have already increased traders’ fixed salary. THE IMPACTS

Cette présentation appartient à Sefico. Elle est protégée par le code de la propriété intellectuelle : toute reproduction ou diffusion est interdite sans autorisation. French Government expects 360 million euro from this one-off tax on bank bonuses. A main part (270 million euro) will be used to support the « Fonds de Garantie des dépôts » Deposit Guarantee Funds in order to strengthen the security of account- holders. The other part (90 million euro) will go to the Government. The Government examines another issue. Funds could be used to support OSEO (a french Fund financing Small and Medium Enterprises). CONCLUSION

CONCLUSION In addition to this tax on bonuses, the French Government (like US and Sweden are thinking about) wants to institute a new tax concerning Banks. This tax will be based on the balance sheet of those companies or on their financial transactions in order to finance again financial crisis. Nothing is actually defined.

Yves SONIER & Jérôme CAYROCHE Partners GROUPE SEFICO