LensCrafters 2009 Annual Report Download - page 108

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> 106 | ANNUAL REPORT 2009
subject to corporation tax and resident in countries that are members of the European Union (the "EU") or
participants in the European Economic Area (the "EEA") and are included in the list provided for by Italian
Ministerial Decree, September 4, 1996 (as amended and supplemented) (the "Decree"), are entitled to
reduced tax rate of 1.375% on distributions of profi ts for the tax years ending after December 31, 2007; and
(ii) pension funds established in a EU or EEA country included in the list provided for by the Decree, are
entitled to reduced tax rate of 11 percent on profi ts distributed on or after July 29, 2009.
The substitute tax regime does not apply if ordinary shares representing a "non-qualifi ed" interest in Lux-
ottica Group are held by an Italian resident shareholder in a discretionary investment portfolio managed
by an authorized professional intermediary, and the shareholder elects to be taxed at a fl at rate of 12.5
percent 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 ADSs
Dividends paid to benefi cial owners who are not Italian residents and do not have a permanent establish-
ment in Italy to which the ADSs are effectively connected are generally subject to a 27.0 percent substitute
tax rate. Accordingly, the amount of the dividend paid to Deutsche Bank Trust Company Americas, as
depositary of the Ordinary Shares and the issuer of the ADSs, through Deutsche Bank S.p.A., as custodian
under the Deposit Agreement, will be subject to such Italian substitute tax. Therefore, the amount of the
dividends that the holders of ADS will initially receive will be net of such Italian substitute tax.
All owners of ADSs will be given the opportunity to submit to Deutsche Bank Trust Company Americas,
in accordance with the procedure set forth by it, the documentation attesting to (i) their residence for tax
purposes in Italy or in countries which have entered into anti-double taxation treaties with the Republic of
Italy, pursuant to which reduced/NIL tax rates may become directly applicable; (ii) their status as companies
or entities subject to corporation tax and resident in a country that is a member of the EU or participants in
the EEA and are included in the list provided for by the Decree, and as such entitled to a reduced tax rate of
1.375 percent on distributions of profi ts of the tax years ending after December 31, 2007; or (iii) their status
as pensions funds established in an EU or EEA country and included in the list provided for by the Decree
and as such entitled to a reduced tax rate of 11 percent on profi ts distributed on or after July 29, 2009.
Concurrently with the delivery of the Proxy Statement, the Depositary has mailed to all ADS holders a
document and necessary forms setting forth the detailed procedure to be used by ADS holders for the
purpose of obtaining the direct application of the reduced tax rate under an applicable tax treaty or under
the Italian domestic law.
As soon as the required documentation is delivered by Deutsche Bank Trust Company Americas to Deut-
sche Bank S.p.A., such bank shall endeavor to effect repayment of the entire 27.0 percent withheld or the
balance between the 27.0 percent withheld at the time of payment and the rate actually applicable to
the non-Italian resident ADS holder under a tax treaty or under the Italian domestic law, as the case may
be. By way of example, Italy and the United States (as well as many other countries) are parties to a tax
treaty pursuant to which the rate of the tax applicable to dividends paid by an Italian resident company to
a US resident entitled to the benefi ts under the treaty may, in certain cases, be reduced to 15.0 percent.
Therefore, US resident ADS holders entitled to the 15.0 percent rate provided by the currently applicable
Italy-United States tax treaty have the opportunity of being repaid a further 12.0 percent of the gross
dividend, that is the difference between the 27.0 percent withheld at the time of payment of the dividend
and the 15.0 percent substitute tax provided for by the Italy-United States tax treaty.