(5/2008)

Royal Decree No. 469 under the Revenue Code was issued, with effect from 1 January 2008, to reduce the rate of specific business tax (SBT) from 3% to 0.01% for revenue derived by commercial banks and finance, securities and credit foncier businesses under the law governing finance, securities and credit foncier businesses as well as businesses with regular transactions similar to commercial banking. However, the reduced rate of SBT will apply only in the following circumstances:

(1) Interest on loans only between financial institutions or other juristic persons prescribed by the Director-General of the Revenue Department whereby the period of loan does not exceed one year;

(2) Gross profit from the resale of securities under repurchase agreements executed between financial institutions or other juristic persons prescribed by Director-General and the period of the agreement does not exceed one year;

(3) Interest on cash collateral from the repurchase agreements of securities as per (2) above;

(4) Interest or discounts on debt instruments or gross profit from the purchase or sale of debt instruments;

(5) Interest from securities lending;

(6) Gross profit from exchange or purchase or sale of currencies;

(7) Interest, fees or gross profit from the purchase or sale of forward contracts only in the case where the goods or variables of such contracts are in any currencies, debt instruments, exchange rates, interest rates, or other goods or other variables as prescribed by the Director-General and such contract is made outside the forward contract sale centre under the law governing forward contracts but excluding repurchase agreements of securities.