Tax Rate

The tax rate for the year 2013 will be 0.12% for shares transacted on regulated markets and MTFs and 0.22% for those transacted outside of these markets. The tax rates are to decrease in 2014 to 0.10% and 0.20% respectively.

The acquisition of the underlying stock upon exercise or delivery of a derivative instrument will be subject to the higher (0.22% in 2013) rate.

Scope

The I-FTT will be applied to shares provided the issuer is resident in Italy. In addition, the I-FTT will be applied to securities representing shares issued by companies resident in Italy (example American Depository Receipts).

The acquisition of shares whose average market capitalization in November of the previous year was less than EUR 500 million will not be subject to the tax.

While at this time the Italian Tax Authorities have not defined corporate actions for which the acquisition of shares may be subject to the I-FTT, traders should be aware that as information is released, IB will assess taxes as required.

Calculation Method

The tax will be calculated on the net settlement per ISIN per final beneficiary per day. The net long share quantity will be multiplied by the average price of the purchase shares. Securities with identical settlement dates will be netted together for the determination of the tax.

In the event the net settlement includes transaction executed both on and off regulated markets, a blended tax rate will be used. For example

The final net position of the above transactions is 5

Weighted average purchase price = (10*50 + 15*51) / 25 = 50.60

Tax Base = 5 * 50.60 = 253

Average Tax Rate = (15*0.22% + 10*0.12%) / 25 = 0.18%

Tax Due = 253 * 0.18% = 0.46 EUR

The tax may be due on either the actual settlement date or the contractual settlement date of the transaction. IB intends to calculate the tax based on the contractual settlement date, which on most European venues is T+3 with the exception of the German markets where it is T+2. Please contact IB should you wish to discuss changing this default.