INFORMATION ON COMPLETING TAX RETURN FORM No. 2042 AND ANCILLARY TAX FORMS
The information provided in this document is up to date in respect of the relevant regulations as at 12 January 2017 and applies to individuals who are tax residents
in France and to their personal assets. The information provided herein is intended to serve as guidance only and may be modified. For more detailed information
you may refer to the instructions provided with your Tax Return forms.
I. INCOME FROM SECURITIES
A. Income that is subject to withholding tax
Depending on the nature of the income received in 2016, the tax that your paying agent withholds may or may not fully discharge your personal income tax
liability.
1) Income
that is subject to a withholding tax that does not fully discharge the personal income tax liability (lines 2DC, 2TS, 2TR and 2FA)
Except in some specific cases and/or if a waiver was requested, income from fixed-income investments, dividends and other income collected in 2015
are subject to a mandatory withholding tax at a rate of 24% (as per Article 125 A of the French tax code) or 21% (as per Article 117 quater of the tax
code). This income is also subject to personal income tax at the applicable rate and must be indicated on your Tax Return form (No. 2042). The tax that
your paying agent withholds on this income entitles you to a tax credit (line 2CK) that is equivalent to the amount of the tax withheld and is directly
deducted from your income tax liability for 201 6. If the tax credit exceeds the amount of income tax your tax household owes you will be entitled to
receive the net tax credit surplus.
If your tax household received income in 2016 from fixed-income investments (line 2TR) the gross amount of which does not exceed 2,000 euros, you may
elect to pay a flat rate of 24% on this income. To choose this option you must indicate the amount of this interest income on line 2FA of your Tax Return
form (No. 2042), or on line 2CG if social security taxes have already been paid on this income. In correlation with this, lines 2TR and 2BH of the tax return
must be adjusted by the amount of interest income reported on lines 2FA and 2CG.
Social security taxes at a combined overall rate of 15.5% were also charged on income from fixed-income investments, dividends and other distributions .
When this income is subject to personal income tax at the applicable rate, the CSG tax liability can be deducted to up to 5.1% of taxable income.
2) Income
that is subject to a withholding tax that fully discharges the personal income tax liability (lines 2DH, 2EE)
The taxes that your paying agent may have withheld on certain types of income in 2016 fully discharge your corresponding personal income tax liability. This
mainly concerns income from:
- fixed-income investments when the debtor is established or domiciled in France and income distributed by French companies that is paid outside of
France in a non-cooperative country or territory (NCCT);
- savings products that employ a so-called “solidarity” feature;
- securities or contracts that are held anonymously;
- capitalization contracts or life insurance policies.
This income is subject to the withholding of social security taxes at an overall rate of 15.5% and must be indicated for guidance on your Tax Return form
(No. 2042).
B. Income entitled to a 40% deduction (line 2DC)
Dividend and equivalent distributions received in 2016 from the following types of companies or schemes (provided they break down their distributions)
are subject to personal income tax at the applicable rate, whether or not there was a withholding tax obligation when this income was received:
- companies that are subject to corporate income tax or to an equivalent tax or which have elected to pay such taxes and which have their registered
office in a Member State of the European Union or in a country or territory that has signed a tax treaty with France that includes a clause to provide
assistance to prevent tax evasion and fraud, provided that such dividends and distributi ons are duly approved by the competent body,
- investment companies and regional development and venture-capital funds (SDR, SUIR and SCR), in respect of distributions that are not taken from
earnings that are exempt from corporate income tax;
- the collective investment schemes specified in paragraphs a) and b) of sub-section 4° of section 3 of Article 158 of the French tax code and real estate
investment funds.
This income is taxable after deduction of:
1) an allowance of 40% of the gross amount of dividends and equivalent distributions received;
2) deductible fees and expenses.
Other income :
The gross amount of taxable income, including tax credits, must be reported. Collection charges and custody fees may be deducted on income from
securities that is subject to personal income tax at the applicable rate and must be indicated on the Tax Return form (No. 2042).
We have calculated the amount of your deductible collection charges, which must be indicated on line 2CA.
Regarding custody fees, the amount indicated in the "For information" section is the total amount (deductible and non -deductible) of the custody fees paid
(except on PEA and PEA-PME equity savings plans). It is up to you to calculate the deductible portion of these fees and add this amount to line 2CA.
Custody fees paid on your PEA and PEA-PME plans are not deductible.
II. CAPITAL GAINS
A. On the sale of securities and equity rights
1) Taxation
Capital gains on securities sold in 2016 are subject to personal income tax at the applicable rate. The net gain on the sale and redemption of shares and
equity rights in companies, and on the sale and redemption of shares or units of certain types of collective investment schemes that invest over 75% of their
assets in the shares of companies, are subject to personal income tax at the applicable rate after the standard deduction that is allowed on securities that
are held for a specified time. This deduction is 50% when shares are held from two to eight years and is 65% when held for eight years or more.
Also included in this category and eligible for this same deduction, are capital gains distributed by certain types of collec tive investment schemes that invest
over 75% of their assets in the shares of companies or in related equity rights, capital gains distributed by venture-capital firms, and distributions by FCPR
venture capital funds and FCPI private equity funds.
Capital gains on the sale of securities in small and medium -sized enterprises (SME) that are less than 10 years old and which meet the criteria set forth
in Article 150-0 D 1 quater B of the French tax code, capital gains on the sale of over 25% of the equity in a family-owned company, and capital gains on
the sale of shares in SME by their senior managers upon retirement, are eligible for a 50% deduction provided that these securities are held from one to
four years, to a 65% deduction if held from four to eight years, and to a 85% deduction if held for eight or more years. For SME senior managers, the
deduction comes on top of a 500,000-euro exemption.
Deductions that are subject to a holding time requirement are not taken into account when determining the tax base for the “contribution
exceptionnelle” tax for which high-income taxpayers are liable.
Capital gains on the sale of securities are also subject to social security taxes at an overall rate of 15.5% and are levied by assessment. Deductions that
are subject to a holding time requirement are not taken into account when determining the tax base. When capital gains are subject to personal income
tax at the applicable rate, the CSG tax liability can be deducted to up to 5.1% of taxable income.
The amount of capital gains or losses on the sale of securities that we calculate is indicated at the bottom of the Summary Return on Securities
Transactions and Income from Securities form (No. 2561 ter) and does not take into account any deductions that are subject to a holding time requirement to which
you may be entitled. You may use the Tax Return Assistance Service if you have access to this.

You would like to use the capital gain or loss amounts indicated at the bottom of the Summary Return on Securities Transactions and Income from Securities
form (No. 2561 ter).
- If you believe that you are not entitled to a deduction on capital gains on securities that are subject to a holding time requirement and if you wish to report capital
gains and losses based on the information we have, all you have to do is enter the amounts indicated on the aforementioned form on line 3VG or 3VH of your Tax
Return form (No. 2042). You must keep the Summary Return on Securities Transactions and Income from Securities form (No. 2561 ter) and, if
requested, send it to your local tax authority along with the bottom section.
- If you believe you are entitled to a deduction on capital gains on securities that are subject to a holding time requirement, you must determine the amount of
these deductions yourself or use the Tax Return Assistance Service if you have access to this. You must indicate the amount of net capital gains
or losses net of the deductions (on line 3VG or line 3VH) and the amount of the deductions on the capital gains (on line 3SG) on the Tax Return
form (No. 2042), and if necessary on the Deduction Calculation form No. 2074-ABT. You must keep the Summary Return on Securities Transactions
and Income from Securities form (No. 2561 ter) and, if requested, send it to your local tax authority. The bottom section does not have to be attached.

You do not wish to use the capital gain and loss amounts indicated at the bottom of the Summary Return on Securities Transactions and Income from
Securities form (No. 2561 ter).
In this case you must do your own calculations and in addition to the Tax Return form (No. 2042), fill out the Capital Gains and Losses form (No. 2074) and
the Deduction Calculation Form (No. 2074-ABT). You must keep the Summary Return on Securities Transactions and Income from Securities form
(No. 2561 ter) and, if requested, send it to your local tax authority. The bottom section does not have to be attached.
To calculate these deductions, the holding time begins on the date at which you subscribed for or acquired your securities or rights, except in some specific cases. For
more information you may refer to the Instructions for Completing your Tax Return (No. 2041-NOT) provided by the tax authorities, and if necessary to the
Instructions for Reporting Deferred Capital Gains and Losses (No. 2074-NOT).
Please note: 1) You must recalculate your capital gains if you sell securities or equity rights that entitle you a tax deduction for investing in SME (as per Article 199
terdecies-0-A of the French tax code). To calculate the capital gain or loss, the amount of the tax deduction must be subtracted from the price at which the securities
were purchased.
2) Since it takes two trading days after the trade date to transfer title to listed securities, capital gains and losses upon sale are calculated on transactions from
30 December 2015 until 29 December 2016. This rule does not apply to subscriptions or redemptions of shares or units in collective investment schemes.
2) Capital losses
Net capital losses realised in 2016 can be carried forward for 10 years. To apply a capital loss against future personal income tax and social security
taxes, the loss must be reported on the Realised Capital Gains and Losses form (No. 2074) and/or on the Tax Return form (No. 2042).
B. Capital gains and losses on derivative instruments
Capital gains and losses on derivative financial instruments realised on an occasional basis by individuals who are tax residents in France, either directly or
through an intermediary, are subject to personal income tax at the applicable rate as "Capital gains on the sale of securities and equity rights" with no
deduction in proportion to the length of time held.
If you (or a member of your tax household) conducted no other transactions involving securities in 2015, you may use the Summary Return on Securities
Transactions and Income from Securities form (No. 2561 ter) and indicate the net capital gain or loss on line 3VG or 3VH of your Tax Return form (No.
2042). If this is not the case you must complete the Realised Capital Gains and Losses form (No. 2074). Losses incurred in a given year can only be
applied against profits of the same type realised that year and over the next 10 years.
Capital gains on derivative instruments are also subject to social security taxes at the overall rate of 15.5%, which are levied by assessment. A deduction of up to 5.1%
of taxable income is allowed for the CSG tax liability.
Capital gains and losses realised on a regular basis are taxed as "non-commercial profits". Losses can only be applied against profits of the same type realised
that year and over the next six years.
III. EQUITY SAVINGS PLANS (“PEA” PLANS) AND EQUITY SAVINGS PLANS FOR SMALL AND MEDIUM SIZED ENTERPRISES (“PEA-PME” PLANS)
1) Reporting requirements and taxation
If a PEA or a PEA-PME plan is closed before its fifth year has expired, capital gains are taxable:

at a rate of 22.5%, if the plan is closed within two years after being opened;

at a rate of 19%, if the plan is closed between its second and fifth year.
The above rates do not include social security taxes at an overall rate of 15.5%, which are levied by assessment.
If you have simply closed a PEA or a PEA-PME plan before it is five years old you must directly enter the amount of the capital gain on line 3VT (if the gain
is taxed at 19%) or on line 3VM (if the gain is taxed at 22.5%) of the Supplementary Tax Return form (No. 2042C). A capital loss must be indicated on line
3VH of the Tax Return form (No. 2042). If this is not the case you must complete the Realised Capital Gains and Losses form (No. 2074).
Closing of a PEA plan after five years or partial withdrawal after eight years : Capital gains are not subject to personal income tax but are subject to social
security taxes, which are deducted by the bank and paid to the tax authorities. A capital loss may be applied against gains realised outside of the PEA plan,
provided that all of the securities have been sold before closing the plan. In this case, you do not have to submit the Realised Capital Gains and Losses form
(No. 2074) if your paying agent has calculated this loss. You may indicate this loss on your Tax Return form (No. 2042).
2) Income from unlisted securities
If you hold a PEA and/or a PEA-PME plan that includes unlisted securities, the exemption from personal income tax on the income from these securities
is limited to 10% of the initial price paid for these securities. The share of the income from unlisted securities that exceeds this 10% limit is subject to
personal income tax and social security taxes. The social security taxes are levied by assessment. On your tax return you must therefore indicate the
taxable portion of this income (including any tax credits) that you have calculated based on the amounts indicated on lines 2FU and 2TS. Likewise, only
the portion of tax credits that correspond to the income you have calculated on line 2FU must be indicated on line 8TA of the Supplementary Tax
Return form (No. 2042C).
IV. SAVINGS DIRECTIVE: for residents of the territories of Aruba and Sint Maarten
The European Savings Tax Directive has arranged an exchange of information between Member States, in order to allow taxation, in the beneficiary's country of residence, of
“interest payments” received in another Member State, was only maintained for interests paid in 2016 to residents of the territories of Aruba and Sint Maarten (Dutch part of
Saint-Martin Island).
In this context, the transmission, to the French tax authorities, of the amount of "interest payments" received in 2016 by individual clients residing in those territories is
mandatory.
The French authorities shall transmit these informations to the tax authorities of the said territories.
These amounts do not necessarily constitute the taxable amount that will be withheld by the tax authorities of your home jurisdiction to calculate your tax liability.
These measures target: interests on savings products; interests distributed by certain mutual funds; the amount of the assignments, redemptions, or repayments of certain
receivables, units or shares of certain UCIs.