LensCrafters 2004 Annual Report Download - page 77

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76
TAX REGIME - HOLDERS
OF ORDINARY SHARES
The gross amount of dividend paid to shareholders of
Italian listed companies whose shares are registered
in a centralized deposit system managed by Monte
Titoli S.p.A, who are individuals and are Italian
residents for tax purposes, will be subject to a 12.5%
final substitute tax, provided the shareholding is not
related to the conduct of a business, and if these
persons do not hold a “qualified” shareholding. The
12.5% final substitute tax will not be applied only if they
timely declare that they satisfy the relevant
requirements (i.e. qualified shareholding or related to
the conduct of a business).
This substitute tax will be levied by the Italian
authorized intermediary that participates in the Monte
Titoli system and with which the securities are
deposited, as well as by non-Italian centralized
deposit system participating in the Monte Titoli system
(directly or through a non-Italian deposit system
participating in the Monte Titoli system), through a
fiscal representative to be appointed in Italy.
Individuals who timely declare that they hold a
qualified shareholding or related to the conduct of a
business, will receive the gross amounts of dividends
paid and include dividends in their worldwide taxable
income, subject to the ordinary income tax rules. The
dividend paid to other subjects different from the
above mentioned individuals, who are resident in Italy
for tax purposes, including those companies subject
to IRES/IRE and foreign companies with permanent
establishment in Italy to which the shares are
effectively connected, investment funds, pension
funds, real estate investment funds and subjects
excluded from income tax pursuant to Art. 74 of
Presidential Decree No. 917/86, are not subject to
substitute tax. Dividends paid to entities subject to
IRES/IRE different from individuals holding a non-
qualified shareholding or not related to the conduct of
a business, will be subject to the ordinary income tax
rules. Italian law provides for a 27% final substitute tax
rate on dividends paid to Italian residents who are
exempt from corporate income tax.
Dividends paid to beneficial owners who are not Italian
residents and do not have a permanent establishment
in Italy to which the shares are effectively connected,
are subject to 27% substitute tax rate. However
reduced rates (normally 15%) of substitute tax on
dividends apply to non-residential beneficial owners,
who are entitled to and comply with procedures for
claiming benefits under an applicable income tax
treaty entered into by Italy. Under the currently
applicable Italy-U.S. Treaty, an Italian substitute tax at a
reduced rate of 15% will generally apply to dividends
paid by Luxottica Group to a U.S. resident entitled to
treaty benefits who complies with the procedures for
claiming such benefits, provided the dividends are not
effectively connected with a permanent establishment
in Italy through which the U.S. resident carries on a
business or with a fixed base in Italy through which the
U.S. resident performs independent personal services.
The substitute tax regime does not apply if ordinary
shares representing a “non-qualified” interest in
Luxottica Group are held by a shareholder in a
discretionary investment portfolio managed by an
authorized professional intermediary, and the
shareholder elects to be taxed at a flat rate of 12.5%
on the appreciation of the investment portfolio accrued
at year-end (which appreciation includes any
dividends), pursuant to the so-called discretionary
investment portfolio regime - regime del risparmio
gestito.
TAX REGIME - HOLDERS
OF ADS
Dividends paid to beneficial owners who are not
Italian residents and do not have a permanent
establishment in Italy, are subject to 27% substitute
tax rate. Accordingly, the amount of the dividend paid
to The Bank of New York, as depositary of the ordinary
shares and the issuer of the ADSs, through
UniCredito Italiano S.p.A., as custodian under the
Deposit Agreement, will be subject to such Italian
substitute tax. Therefore, the amount of the dividend
that the holders of ADS will initially receive will be net
of such substitute tax.
All owners of ADSs have been given the opportunity
to submit to The Bank of New York, in accordance
PROPOSED DIVIDEND AND RELATED TAX REGIME