Académique Documents
Professionnel Documents
Culture Documents
ABN AMRO Bank (Luxembourg) S.A. - Fiscal number: 1982 2200 071
RBS Global Banking (Luxembourg) S.A. - Fiscal number: not yet attributcd
Lux-Irllnvestments No 1 S.A. - Fiscal number: 2005 2221 634
N~ame
6. Date of rcccipt:
2 1 SEP. 2009
PricewaterhouseCoopers
Socit responsabilit limite
Rviseur d'entreprises
400, route d'Esclt
13.P. 1443
L-1014 Luxembourg
Telephone +352 494848-1
Facsimi lc 1352 494848-2900
www.pwc.com/lu
info@lu.pwc.com
21 September 2009
References: MLGY/ AEHN/MASR/AABO/ A 1809008M-ECCI
Dear Mr Kohl,
ln our capacity of tax consultant of the above-mentioned client, we discussed in our
meeting dated 31 August 2009 the tax treatmcnt applicable to the transactions foreseen by
our client This letter aims at confinning the conclusions reached during this meeting and
will serve as a basis for the preparation of the tax returns of the Luxembourg companics
involved.
A.
Factua.l background
l.
Further to a common bid made in 2007, a consortium of three banks' acquired the
group ABN AMRO. For further details on the acquisition of the group ABN
AMRO by the consortium p lease refer to Appendix 1.
2.
Royal Bank of Scotland, Fortis and Banco Santander agreed to take over the
different banking activities of the group ABN AMRO. In Luxembourg, the two
main activities of ABN AMRO Bank (Luxembourg) S.A. (hereafter "ABN Lux" or
the "Bank") will be attributed as follows:
The Private Clients business line ("PC business"), including the participation
in the Luxembourg life insurance company ABN AMRO Life S.A., will
remain in the hands of ABN Lux;
3.
The separation ofboth business !ines of ABN Lux will be realizcd as follows:
Prcliminary stcps
4.
On 31 August 2009, ABN AMRO Bank N.V. has conhibutcd the shares of ABN
AMRO Bank (Luxembourg) S.A. to a Dutch company, ABN AMRO Private
Clients Holdings B.V. (hereafter "PC Hold ings"), in exchange for an issue of
shares.
5.
Bcfore the end of October 2009, ABN AMRO Bank N.Y. will transfer the shares of
PC Holdings to a Dutch company, Aurora N.V., against a note and a hybrid note. It
has to be noted that Aurora N.Y. will receive its banking liccnsc before the
acquisition of the shares in PC Holdings.
6.
The "Ulster deal" refers to the invcstment made by ABN Lux in the Luxembourg
company, Lux-Ir! lnvestments N 1 S.A., for an amount of GBP I SOm. For furthcr
details on this investment and its Luxembourg tax implications, please refer to the
Jetters datcd 28 June 2005 (Reference: 5327/CZ/MP) and 4 April 2006
(Reference: 5327/CZ/MP/sa).
7.
On 30 October 2009, Cuvia Finance Ltd., an Irish company held by Lux Irl, will
reimburse the Joan grantcd by Lux lrl for an amount of GBP 150m. Lux Irl will
then immediately reimburse its share premium to ABN Lux tor a corresponding
amount of GBP 150m. Finally, ABN Lux will reimburse the GBP 150m Joan
grantcd by ABN AMRO Bank N.V.
Step 2: Contribution by ABN Lux of the shares in Lux Irl to RBS Lux
8.
Effective 151 November 2009, ABN Lux will contribute the shares in Lux lrl to
RBS Lux in exchange for an issue of shares by RBS Lux. At the leve! of ABN Lux,
the contribution will be made at book value accounting wise and at book value tax
wise. At the level of RBS Lux, the contribution will be made at fair market value
for both accounting and tax purposes.
9.
Effective 151 November 2009 - after complction of step 2), ABN Lux will be
subject to a partial demerger according to which:
(2)
The PC business (including the participation in ABN AMRO Life S.A.) will
remain in ABN Lux;
1O.
TI1e pru1ial demerger of ABN Lux will be realized at book value for both
accounting and tax purposes.
11.
As a consequence of the partial demerger, RBS Lux will hold own shares, which
will be immediately cancelled against a concsponding capital reduction (no P/L
impact).
On or about 151 November 2009, PC Holdings will distribute the shares held in RBS
Lux to Aurora (via disttibution in kind). Aurora will then transfer the shares in RBS
Lux to RBS Bank N.V ( fonnerly ABN AMRO Bank N.V.) against redemption of
the note.
ln the beginning of2010, Lux lrl will be put into liquidation. Consequcntly, Lux lrl
will pay its retained eamings to RBS Lux via liquidation proceeds (or a11 advance
on liquidation proceeds).
14.
As a result of the above mentioned restructuling stcps, the PC business will remain
at the leve) of ABN Lux, ultimately owned by Aurora N.V. The CC business will
be held by RBS Lux, u ltimately owned by the group RBS through the intennediary
ofABN AMRO Bank N.V.
15.
The current sirnplified organization chart and the structure after completion of steps
2 and 3 are represented in Appendix 2. The final structure will be as follows:
(3)
AURORAN.V.
(Netherlands)
1
PC Holdings
(Netherlands)
cc
business
1=====,.,=6 ======r
1:
Lux lrllnvestments 11
l1
N 1 SA
1:
:~-=-=-=-.J~;;~~!~~==j
PC
busi ness
+
ABN AMRO Life SA
(Luxembourg)
(4)
B.
16.
The rcimburscment of the Joan granted by Lux lrl to Cuvia Ltd. as weil as the
rcimburscment of the share premium by Lux lrl to ABN Lux for an amount of
GBP 150m wj)] be converted into EUR for tax purposes2 based on the GBP!EUR
exchange rate at the date of the reimbursement (i.e. on 30 October 2009).
17.
As the Joan is booked in the tax balance shect of Lux lrl at its historical GBP/EUR
exchange rate (approximately EUR 220.98m), Lux lrl will rcalize a forex gain or
loss on the rcimbursement of the LTDN depending on the GBP/EUR exchange rate
at the date of the reimbursement. In this respect, any forcx gain would be tax
exempt as this loan is assimilated to a participation for tax purposes3, while any
forex loss would be tax deductible.
18.
As the sharc premium is booked in the tax balance shect of Lux Irl at its historical
GBP/EUR exchange rate (approximately EUR 220.98m), the rcimbursement of the
share premium will have the following impacts depending on the GBP!EUR
cxchangc rate at the date of the reimbursement:
19.
Either the EUR share premiurn will not be rcduccd to zero, but would rernain
positive (even if the GBP share premium will be full y reimbursed accounting
wise);
Duc to its retained ea~.nings accumulated over the last ycars, Lux Irl should not be
considcrcd as having legitimate economie reasons to rctum its share premium in
accordancc with art 97(3)b LITL. Therefore, the allocations in consideration of the
4
share premium reimbursement will be assimilated to incarne from securities in
principlc subjcct to withholding tax. Howevcr, as the conditions of the withholding
tax exemption laid dawn in article 147 LITL arc met, the sharc prcmium
reimburscment will not be subject to any withholding tax.
20.
'
~
'
The reimbursement of the share premium by Lux lrl to ABN Lux as well as the
rcimbursement of the Joan granted by ABN AMRO Bank N.V. to ABN Lux for an
amount of GBP 150m will be converted into EU R for accounting and tax purposes5
based on the GBP/EUR exchange rate at the date of the reimbursement (i.e. on
30 Octobcr 2009).
TI1c annual nccounts of Lux Ir! are cxpressed in GBP. Therefore, a tax balance shcct in EUR i~ cstablished lor tax purposcs.
l~or fu11hcr details, plc.:asc rcfcr LO the !cuers dated 28 June 2005 (Reference: 5327/CZJMP) and 4 April 2006 (Rclrcnc:
5327/CVMP/sa).
Within the m~'llntng of m11clc 97 LITL (i.e. revenus de capituux mobiliers).
n1c annual nccounts of ABN LU!l arc cxprcss~-d in EUR.
(5)
21.
22.
As both the shares in Lux Irl and the loan granted by ABN AMRO Bank N.V. are
booked in both accounting and tax balance sheets of ABN Lux at the closing
GBP/EUR exchange rate (approximately EUR 170m as at 31 December 2008),
ABN Lux will rcalize dcpending on the GBP/EUR exchange rate as at 30 October
2009:
Either a forex gain on the reimburscment of the share premium fTom Lux lrl
and a corresponding forex loss on the loan reimbursement to ABN AMRO
Bank N.V.;
Or a forex Joss on the reimbursement of the share premium from Lux Irl and a
corresponding forex gain on the Joan reimbursement to ABN AMRO Bank
N.V.
The reimbursement of the share premium by Lux Irl and the repayment of the loan
grantcd by ABN AMRO Bank N.V. will therefore be ncutral at the leve! of ABN
Lux, as any foreign exchange result will be fully compensated accow1ting and tax
WiSe.
23.
The conttibution of the shares in Lux Irl to RBS Lux will entai) an exchange of
shares at the level of ABN Lux. The Bank will opt for the tax neutra! exchange of
shares as the conditions laid down in article 22bis of the Luxembourg ln come Tax
Law ("LITL") are met. For further details on these conditions, please rcfer to
Appcndix 3.
25.
ln this respect, unrealized capital gain on the shares in Lux Irl will not be disclosed
upon the contribution as the acquisition priee of the shares received in exchange
(i.e. sharcs in RBS Lux) will correspond tax wise to the acquisition priee of the
shares given in exchange (i.e. shares in Lux Irlt Similarly, the acquisition date of
the shares in RBS Lux will also correspond to the acquisition date of the shares
7
previously held in Lux lrl .
26.
ln addition, the expenses to be recaptmed at the level of ABN Lux with respect to
the shares in Lux Irl will be transferred on the RBS Lux shares.
'
(6)
As the contribution of the shares in Lux lrl will be done at fair market value at the
levet of RBS Lux for both accounting and tax purposes, the acquisition priee of
those shares will correspond to their fair market value at the time of the
contri but ion.
28.
Furtbermore, the acqmsttlon date of those shares will be the date of their
contribution to RBS Lux.
The pat1ial demerger will be realized tax free m the hands of ABN Lux rn
accordance wth article 170(3) LITL.
30.
ln this respect, the assets and liabilities transferred to RBS Lux further to U1e partial
demerger (including the shares in RBS Lux) will be booked at the values
previously booked in the hands of ABN Lux. Further to the partial demerger, the
value of the participation in RBS Lux for commercial pmposes and its "tax value"
will not be different due to the tax neutral contribution of shares (step 2) and the
different contribution values booked respectively by ABN Lux and RBS Lux. In
this respect, the "tax val ue" of the participation in RBS Lux in the bands of
ABN Lux will continue to be booked by RBS Lux in its tax balance sheet further to
the partial demerger. The continuity of the book values required by
ru1icle 170 LITL will therefore be fulfilled.
31 .
32.
In addition, the PC business (including the participation in ABN AMRO Life S.A.)
constitutes an independent part of enterprise within the meaning of article 170(3)
LITL, as it consists in a private banking activity and ABN AMRO Li fe S.A. is the
!ife insurance company offering tailor made insurance solutions to High Net Worth
individuals, being therefore part of the private banking activity of the Bank.
33.
Moreover, the shareholder of the Bank (i.e. PC Holdings) will receive shares in the
beneficiary company (i.e. RBS Lux) as remuneration of the contribution of the CC
business.
34.
(7)
35.
In this respect, unrealized capital gains on the assets and liabilities transferred to
RBS Lux (including the shares in RBS Lux) will not be disclosed upon the
demerger. The expenses to be recaptured will not be transferred to the beneficiary
company (i.e. RBS Lux). Similarly, expcnses deducted by ABN AMRO in relation
to the RBS shares will not be recaptured later on in the hand of ABN AMRO as this
latter will no longer hold the participation in RBS Lux.
36.
RBS Lux will have to cancel its own shares received further to the partial
demerger. The cancellation of its own shares will not be a taxable event. The RBS
Lux's share capital will indeed be reduced correspondingly to the cancellation of
the own shares (no P/L impact).
37.
Furthermore, the share capital reduction of RBS Lux will not be subject to
withholding tax, as it is considered as having Jegitimate economie reasons to return
its share capital due to the absence of retained earnings (article 97(3)b LITL).
Step 4: Transfer of RBS Lux's shares to RBS Bank N.V. (formcrly ABN AMRO Bank
N.V.)
38.
The transfer of the shares in RBS Lux to Aurora (via a distribution in kind of PC
Holdings) and then from Aurora N .V. to RBS Bank N.Y. (formerly ABN AMRO
Bank N. V.) will not trigger any tax implications in Luxembourg.
40.
41 .
Liquidation proceeds received by RBS Lux in excess of the acquisition cost will be
fully subject to taxation, as the 12 month holding period requirement mentioned in
article 166 LITL will not be fulfilled.
(8)
We remain at your disposai should you need any further information and would like to
thank you tor the attention that you will give to our request.
Y ours siijcerely,
1\Ji
Michel
Partner
Gui!lu1
Appendix 1:
Append ix 2:
Appendix 3:
This Jax agreement is based on the facts as presented to PricewaterhouseCoopers Srl as at the date Jhe advice was given. The
agreement 1s dependent on specifie facts and circumstances and may not be approprlale lo another party them the one for which 11 was
prepared. 711/S fax agreemenJ11as prepared wilh on/y the inlerests ufABN Amro Bank (Luxembourg) SA. ln minci, tmd was not planned
or carried 0111 in comemplation of any use by any other party. PricewaterhouseCoopers Srl. ils parmers, employees and or agents.
nciJher owe nor accepl any dury of core or any responsibility 10 any other party. whether in contract or in tor/ (including withow
limitation. negligence or breac:h ofstatu/ory duty) however arising, and sha/1 not be /labie in respecJ of any loss, damage or expense of
whCitever nature which is caused to any other party.
(9)
Appendix 1
Worldwide restructuring of the ABN AMRO Group
1.
On 17 October 2007, ABN AMRO Holding N.V. was acquired through RFS
Holdings B.V. (hereafter "RFS Holdings") by a consortium of banks consisting of
Royal Bank of Scotland, Fortis and ilanco Santander. ABN AMRO Holding N.V.
was delistcd on 25 April 2008 from the Euronext Amsterdam and the NYSE and a
squeeze-out procedure to buy minority shareholders' interest was completcd on
22 Septernber 2008, after which RFS Holdings becamc the sole shareholder in
ABN AMRO llolding N .V.
2.
On 3 October 2008, the State of Nethcrlands acquired ali Fortis' businesses in the
Netherlands, including the Fortis share in RFS Holdings hcld by Fortis Bank
Ncthcrland (Holding) N.V. On 24 Dccernber 2008, the Dutch State purchascd from
Fortis Bank Netherland (Holding) N.V. its investment in RFS lloldings to becomc
a direct shareholder in RFS Holdings. The interest acquired by the Dutch State will
be spun off by way of a legal split into a newly establishcd Dutch company, Aurora
N.V.
3.
The consortium agreed to take over various business activities of the group ABN
AMRO ali over the world. In Luxembourg, at the lcvcl of ABN AMRO Bank
(Luxembourg) S.A. 9 , it has been decidcd to separatc its cw-rcnt business aetivities
as follows:
Ultimatcly owncll by RFS llolllings N. V. throu~h the mtcnnelliary of ABN AMRO llolding N. V and ABN AMRO Oank N V
( 10)
Appendix 2
Simplified organization ch arts of the restructuring
A
_l
ABN AMRO Bank
(Luxembourg) SA
(Luxembourg)
PC business
CC business
1
1
(Luxembourg)
(Luxembourg)
I F : R O Bank N.V.
therlands)
Aurora N.V.
(Netherlands)
PC Holdings
(Netherlands)
CC business
PC business
ABNAMRO
Life SA
(Luxembourg)
(Luxembourg)
Lux lrllnvestments
No.1 SA
(Luxembourg)
(11)
Il
Aurora N.V.
(Netherlands)
1
PC Holdings.
(Netherlands)
_l
PC
business
cc
business
ABNAMRO
Life SA
(Luxembourg)
AURORAN.V.
(Netherlands)
1
PC H
..,
(Netherlands)
cc
business
PC
business
1
ABN AMRO Life SA
(Luxembourg)
(12)
Appendix 3
A
At the leve! of ABN Lux, the contribution of the shares in Lux Ir! to RBS Lux will
be tax neutra! as the conditions of article 22bis(2)3 LITL will be fulfilled, i.e.:
RBS Lux and Lux Irl are EU companies falling in the scope of article 3 of the
amended Council Directive 90/434/CEE dated 23 Julyl990, as they are
Luxembourg full y taxable joint-stock companies. This condition will be met;
The shares in Lux Jrl acquired by RBS Lux will confer the majority of the
voting rights in Lux Irl. This condition will be met;
The partial demerger of ABN Lux will be realized tax frce as the conditions of
Article 170(3) LlTL are met, i.e.:
The companies taking part in the transaction (i.e. ABN Lux and RBS Lux)
must be Luxembourg fully taxable joint-stock cornpanies. ln the present case,
this condition will be met;
(13)
The assets and liabilities transferred have to encompass at !east one enterprise
or one independent part of enter-prise. The samc applics for the asscts and
liabilities kept by the demcrgcr company. This condition will be met, as RBS
Lux will receive the CC business 10 and ABN Lux will kcep the PC business
(including the participation held in ABN AMRO Life .1\.);
Further to the partial demerger, the value of the participation in RBS Lux for
commercial purposes and its "tax value" will be different due to the tax neutra!
contribution of shares (step 2) and the different contribution values booked
respectively by ABN Lux and RBS Lux. ln this respect, the "tax value'' of the
participation in RBS Lux in the hands of ABN Lux will continue to be booked by
RBS Lux in its tax balance sheet further to the partial demcrger. The continuity of
the book values required by a1ticlc 170 LlTL will thercfore be fulfilled .
Consequently, unrealized capital gain on the assets and liabilities transferred will not be
disclosed upon the pwtial demerger. lmmediately after the partial demcrger, RBS Lux will
have to cancel its own shares. This transaction will not be a taxable event in Lux.embourg,
as it will have no P/L impact (i.e. cancellation of the own shares against capital reduction).
10
lncludmg the partictpauon in RBS Lux (rcprcscntmg the sharcs previously held in l.ux lrl). lmmediatcly aller the panial demcrgcr,
the own shares held by RBS Lux will be cancelled.
(14)
LE GOUVERNEMENT
DU GRAND- DUCH DE LUXE MBOURG
Administratio n des contributions directes
Bureau d'imposition
Socits 6
Companies involved: ABN AMRO Bank (Luxembourg) S.A. - Fiscal number: 1982 2200 071
RBS Global Banking (Luxembourg) S.A. - Fiscal number: not yet attributed
Lux-lrllnvestments No 1 S.A. - Fiscal number: 2005 2221 634
21 September 2009
Dear Sir,
lt is understood thal my above confirmation m.ay only be used within the framework of the
transactions contemplated by the abovementioned letter and thal the principles described in
your letter shall not apply ipso facto ta other situations.
Le prpos
bureau
d'impositionfoocits 6
Mariu,s Kohl
Adresse postale
Site Internet
Luxembourg
L-2982 Luxembourg
www.impotsdlrects.public.lu