Individual taxes, summary

Individual taxes, summary Significant developments There have been no significant tax or regulatory developments in the past year. Territoriality and residence Switzerland taxes its residents on their worldwide income, with the exception of income from foreign permanent establishments and real estate situated abroad. Individuals are regarded as resident if they are residing within Switzerland with the intention of staying there permanently. Nonresidents are treated as residents for tax purposes if they are residing in Switzerland and/or are performing a gainful activity (employed or self-employed). Nonresidents staying in Switzerland but not performing a gainful activity are also treated as residents after they have been in Switzerland for a certain period. Taxes are governed by federal law and 26 cantonal tax laws. As of January 1, 2001, all cantonal tax laws are required to comply with the Federal Tax Harmonization Act. Therefore, the general principles of taxation now are the same in all cantons. How ever, the amount of deductions and the tax rates are not subject to the Harmonization Act, so taxation will still vary considerably in the various cantons. Additionally, in most cantons communal taxes are levied as a percentage of cantonal taxes, and each commune independently determines its own percentage. Therefore, the choice of location between canton and, to a lesser degree, commune is of some importance for taxpayers provided movement is not limited by the holding of a work permit/residence permit issued by the canton where the employing company is based. The share of the total tax burden attributable to federal, cantonal and communal taxes may be estimated at one-third each. The follow ing outline is based on the tax laws of the cantons of Zurich and Geneva and the federal tax law. Gross income Employee gross income/an employee resident in Switzerland for tax purposes is taxed on any salary and any other monetary benefits (including reimbursements of living expenses, etc.) received from the employer and based on the employment contract. This holds true regardless of the length of the employment, where the work has been performed, where payment is made, and whether it is remitted. Any income of the spouse and dependent children is included in the employee s taxable income. 490

Switzerland There are some special concessions for expatriates in many cantons such as Zurich and Geneva, which allow special deductions for expatriates, and Basle (Land and City), which allows a tax holiday for certain benefits. Many cantons allow educational expenses for children as a tax-free benefit if the company enters into a cooperation agreement with the school. As per January 1, 2001 new expatriate concessions were implemented also on the federal level. As a general rule, it should be possible to claim the following concessions in all cantons: Transportation Moving costs to Switzerland (e.g. transportation of household) as well as the moving costs upon return to their home country are deductible for expatriates. The same applies for travel expenses for the expatriate and his family at the beginning and at the end of the assignment. Housing If an expatriate maintains his foreign apartment or house during the period of his assignment in Switzerland, the costs of additional housing in Switzerland are deductible, provided such costs do not exceed a reasonable amount. School fees Children of expatriates often attend international rather than national schools. Expenses incurred to send school aged children to foreign language private schools, where the public school do not provide adequate instruction, are tax deductible. Capital gains and investment income/ Capital gains on movable property realized by employees are normally tax-exempt. Capital gains on disposal of Swiss real estate are subject to separate taxation for cantonal but exempt for federal tax purposes (unless they are qualified as being professional ). Investment income, such as dividends, interest and royalties, is subject to income tax on a worldwide basis, subject to treaty based tax credit relief. Rental income from real estate situated abroad is basically tax-exempt. However, this income is to be taken into account in the determination of the tax rate applicable on Swiss taxable income. Deductions Business deductions/an individual may deduct any expenses necessary for earning employment income to the extent they are not reimbursed, such as business-related travel expenses, business-related automobile expenses, travel costs to and from work, business entertainment expenses (subject to restrictions), additional costs for outside meals, professional literature and continuing education. Moving expenses may not be deductible. Tax regulations provide for basic standard deductions, but actual costs are normally deductible if they are higher than standard deductions. Nonbusiness expenses/a wide variety of deductions is allowed and generally includes any interest charges on mortgages or other borrowings (limited to the total private investment income, hypothetical or actual rental value plus CHF50,000), as well as any contributions to compulsory federal social security and pension fund schemes. Certain donations to recognized charitable organizations in Switzerland are deductible up to a certain percentage of net income. Other deductions may be claimed up to the maximums set forth below. 491

Direct Zurich Geneva federal tax cantonal tax cantonal tax CHF CHF CHF Premiums for personal insurance (1) and interest on savings accounts: Married taxpayer... 3,100 4,600 3,000 Single taxpayer... 1,500 2,300 2,000 Single, divorced or widowed taxpayer living with dependent children or other dependents... 2,000 For each dependent child... 700 700 750 Medical bills: Married taxpayer (2)... 4,500 Single taxpayer (2)... 3,000 For each dependent child or other dependent... 750 Deduction from wife s employment Income (if any): 20% (Zurich), (Geneva) (3), up to... 7,000 5,200 3,500 Deduction for Swiss social security pension... (4) (4) (4) Notes: 1. Geneva Deduction limits apply only to life insurance premiums. Sickness and accident insurance premiums are fully deductible. 2. Only the part exceeding the 1% of the net taxable income. 3. To be taken into account separately in the computation of the tax discount introduced further to the Federal Tax Harmonization Act as of January 1, 2001. 4. Computed accordingly to the type of pension received and to the gross income excluding the pension. 492

Switzerland Personal allowances/personal allowances are granted according to individual circumstances, as shown below. Direct Zurich Geneva (Note 1) federal tax cantonal tax cantonal tax CHF CHF CHF Married taxpayer... 27,500 Single taxpayer... 15,000 Single, divorced or widowed taxpayer living with dependent children or other dependents... 27,500 For each dependent child... 5,600 5,400 4,500 For each additional dependent child... 6,500 For each dependent other than wife or child... 5,600 2,400 4,500 For each additional dependent... 6,500 Childminder expenses (2)... 2,500 Notes: 1. Geneva: these deductions are to be taken into account in the separate computation of the tax discount introduced further to the Federal Tax Harmonization Act as of January 1, 2001. 2. For a dependent child of less than 12 years old. The same amount is to be taken into account whether the taxpayer has one or several dependent children fulfilling the condition. An authorized lump-sum foreign service residence tax deduction (commonly called Residency allowance deduction) from Geneva cantonal tax may be negotiated for expatriates, provided certain conditions are fulfilled. As from the 1999 tax year, the deduction has been of 10% of the base compensation, limited to the total of expatriate allow ances paid (in practice, this deduction also applies for federal taxes assessed in Geneva because the calculation and levying are delegated to the cantonal authorities). However, based on the new Swiss federal tax Ordinance relating to expatriates, the practice will change in Geneva, probably by 2004, towards a specific, but sometimes limited, exemption of the Transportations moving costs, as well as of the housing on school fees of expatriate and specialist hires working/residing in Sw itzerland for a limited period of time (see Gross income section above). Tax credits A credit may be claimed for unrelieved foreign withholding taxes on dividends, interest and royalties derived from most countries with which Switzerland has concluded a double taxation convention. When the tax payable by an employed individual has possibly been computed based on an ordinary tax return, the tax liability is reduced by the tax already paid by wage tax (if any) and any Swiss anticipatory tax on dividends and interest (if any) withheld at source. Other taxes Social security tax/for 2002 the taxpayer s share of social security contributions (old-age and dependent pension schemes, disability insurance and military service compensation schemes) is 5.05% with no upper limit (9.5% for self-employment 493

income) and 1.5% for unemployment insurance on the first CHF106,800 and an additional 1% from CHF106,800 up to CHF267,000. In Geneva, as from July 1, 2001 an additional compulsory maternity insurance contribution of 0,2%, with no ceiling, is also perceived. The same rate of contribution applies to the employer. See also No nbusiness expenses above. Health insurance is compulsory and must be organized privately by each individual. Cantonal and communal taxe s/as outlined above, in most cantons a communal tax on income is levied, mainly as a percentage of cantonal taxes. In addition, most of the cantons levy a surcharge on their tax (parish or church tax) to support the three recognized churches (Protestant, Roman Catholic and Christian Catholic), if applicable. For individuals who belong to another faith or who are not a member of any faith, the tax is not levied. In the canton of Zurich, it is important to indicate religious denomination clearly on the registration form at the town hall when first entering Switzerland, as this will serve as the basis for assessing parish tax. In the canton of Geneva, payment of the parish or church tax is not compulsory. Wealth ta x/all cantons levy a wealth tax based on net owned assets. The direct federal tax is not imposed on private property. Net assets include all assets (real estate property, net business assets, securities, receivables, deposits, surrender value of life and similar insurance policies, movable property and loans, advances, mortgages and private borrow ings). To arrive at the taxable wealth, standard allowances prescribed by the law according to personal circumstances may be deducted. Personal tax of CHF24 (CHF48 for joint filing) in Zurich and CHF25 in Geneva is levied on each return. Tax administration Returns/ Normally, income and net wealth items are added together to determine the joint taxable income of wife and husband for Swiss tax purposes. However, special rates apply for married couples. Furthermore, the concept of income splitting between spouses is being heavily debated at the moment. There might be changes in the future as some cantons already apply this system. For direct federal tax purposes, tax returns must be filed annually or biannually (only applicable for the cantons of Vaud, Ticino and Wallis), starting with an odd year, (i.e., 2001/2002). In the other cantons, tax returns must be filed annually. Employed persons are required to enclose a certificate of remuneration issued by their employers. Taxpayers must file their returns on a calendar-year basis. The tax administration may request further evidence, particularly in respect of deductions, and may interview the taxpayer. For federal tax and cantonal tax purposes (except from the cantons of Vaud, Ticino and Wallis that will probably change their timing system in 2003), the tax period is the current year. Upon receipt of notification of final assessment, the period for filing an appeal commences. Foreign employees with no permit to settle permanently in Sw itzerland and whose employer is resident in Switzerland are usually taxed at source. How ever, they are obliged to file a tax return if their gross annual income exceeds CHF120,000 (for the canton of Geneva, CHF 500,000 but 4 other conditions exist in Geneva). There are some exceptions to taxation at source, e.g., when the salary is paid directly by a non-swiss company with no charge-back of costs to Switzerland. 494

Switzerland Payment of ta x/ Under the system of taxation at source, income tax is withheld from salaries if the employee has no permit to settle permanently in Switzerland. Otherwise, payment of tax is based on the tax bills (issued based on the tax returns filed) received, and it basically must be settled in three installments for Zurich cantonal tax purposes, in ten installments for Geneva cantonal tax purposes and by the end of March each year for federal tax purposes. Tax rates Direct federal tax on income I Spouses Living Together (prior year) only valid for the cantons of Vaud, Ticino and Wallis Taxable income Tax on Percentage Over Not over Column 1 on excess (Column 1) CHF 0 CHF 22,600... 22,600 40,600... 1 40,600 46,600... CHF 180 2 46,600 60,100... 300 3 60,100 72,100... 705 4 72,100 82,600... 1,185 5 82,600 91,700... 1,710 6 91,700 99,200... 2,256 7 99,200 105,200... 2,781 8 105,200 109,700... 3,261 9 109,700 112,800... 3,666 10 112,800 114,300... 3,976 11 114,300 115,800... 4,141 12 115,800 715,500... 4,321 13 715,500... 82,282 715,600... 82,294* *11.5% of total income (11.5% being the maximum rate applicable). 495

II Other Taxpayers (prior year) Vaud, Ticino and Wallis Taxable income Tax on Percentage Over Not over Column 1 on excess (Column 1) CHF 0 CHF 11,600... 11,600 25,300... 0.77 25,300 33,100... CHF 105.45 0.88 33,100 44,100... 174.05 2.64 44,100 57,900... 464.45 2.97 57,900 62,400... 874.30 5.94 62,400 82,700... 1,141.60 6.60 82,700 107,500... 2,481.40 8.80 107,500 140,500... 4,663.80 11.00 140,500 603,000... 8,293.80 13.20 603,000... 69,343.80 603,100... 69,356.50* *11.5% of total income (11.5% being the maximum rate applicable). III Spouses Living Together (current year) Taxable income Tax on Percentage Over Not over Column 1 on excess (Column 1) CHF 0 CHF 24,900... 24,900 44,700... 1 44,700 51,300... CHF 198 2 51,300 66,200... 330 3 66,200 79,400... 777 4 79,400 91,000... 1,305 5 91,000 101,000... 1,885 6 101,000 109,300... 2,485 7 109,300 115,900... 3,066 8 115,900 120,900... 3,594 9 120,900 124,300... 4,044 10 124,300 126,000... 4,384 11 126,000 127,700... 4,571 12 127,700 788,400... 4,775 13 788,400... 90,666 788,500... 90,678* *11.5% of total income (11.5% being the maximum rate applicable). 496

Switzerland IV Other Taxpayers (current year) Taxable income Tax on Percentage Over Not over Column 1 on excess (Column 1) CHF 0 CHF 12,800... 12,800 27,900... 0.77 27,900 36,500... CHF 116.25 0.88 36,500 48,600... 191.90 2.64 48,600 63,800... 511.30 2.97 63,800 68,800... 962.70 5.94 68,800 91,100... 1,259.70 6.60 91,100 118,400... 2,731.50 8.80 118,400 154,700... 5,133.90 11.00 154,700 664,300... 9,126.90 13.20 664,300... 76,394.10 664,400... 76,406.00* *11.5% of total income (11.5% being the maximum rate applicable). Zurich cantonal tax V Income Tax Table A Married Taxpayers/Taxpayers Living with Children in Own Household Taxable income Basic tax Percentage Over Not over on Column 1 on excess (Column 1) CHF 0 CHF 11,000... 0 11,000 16,400... 2 16,400 23,200... CHF 108 3 23,200 31,400... 312 4 31,400 40,900... 640 5 40,900 53,100... 1,115 6 53,100 80,300... 1,847 7 80,300 107,500... 3,751 8 107,500 148,300... 5,927 9 148,300 197,200... 9,599 10 197,200 250,200... 14,489 11 250,200 311,400... 20,319 12 311,400... 27,663 13 497

Table B Other Taxpayers Taxable income Basic tax Percentage Over Not over on Column 1 on excess (Column 1) CHF 0 CHF 5,500... 0 5,500 9,600... 2 9,600 13,700... CHF 82 3 13,700 20,400... 205 4 20,400 28,600... 473 5 28,600 38,100... 883 6 38,100 49,000... 1,453 7 49,000 63,900... 2,216 8 63,900 92,500... 3,408 9 92,500 121,000... 5,982 10 121,000 165,900... 8,832 11 165,900 224,300... 13,771 12 224,300... 20,779 13 VI Wealth Tax Table A Married Taxpayers/Taxpayers Living with Children in Own Household Taxable wealth Basic tax Percentage Over Not over on Column 1 on excess (Column 1) CHF 0 CHF 136,000... 0 136,000 340,000... 0.05 340,000 680,000... CHF 102 0.10 680,000 1,223,000... 442 0.15 1,223,000 2,039,000... 1,256.50 0.20 2,039,000 2,854,000... 2,888.50 0.25 2,854,000... 4,926.00 0.30 Table B Other Taxpayers Taxable wealth Basic tax Percentage Over Not over on Column 1 on excess (Column 1) CHF 0 CHF 68,000... 0 68,000 272,000... 0.05 272,000 612,000... CHF 102 0.10 612,000 1,155,000... 442 0.15 1,155,000 1,971,000... 1,256.50 0.20 1,971,000 2,786,000... 2,888.50 0.25 2,786,000... 4,926.00 0.30 Effective cantonal income and wealth tax is determined by multiplying the basic tax by the multiplier applicable for the tax (calendar) year in question. For Zurich for 2002, effective cantonal tax is 105% of basic tax. 498

Switzerland Zurich communal tax/each commune levies its taxes as a percentage of basic cantonal tax. For 2002 the effective communal tax of the city of Zurich is 122% of basic tax. Parish tax/parish tax is levied as a percentage of basic cantonal tax. For 2002 the follow ing percentages are applicable in the city of Zurich. % Protestant... 10 Roman Catholic... 12 Christian Catholic... 14 Geneva cantonal tax Preliminary note: The Geneva (cantonal/communal tax estimates shown hereafter are still based on the 2001 tax scales, as the 2002 tax scales had not yet been issued on June 21, 2002. VII Income Tax Table A Married Taxpayers and Taxpayers Living with Children in Own Household Base cantonal (1) tax Tax rate before tax discount Taxable income CHF CHF % 20,000... 1,082.10 5.41 30,000... 2,083.45 6.94 40,000... 3,230.40 8.08 50,000... 4,471.65 8.94 75,000... 8,028.65 10.70 100,000... 11,822.20 11.82 150,000... 19,807.60 13.21 200,000... 28,201.70 14.10 300,000... 45,803.75 15.27 500,000... 82,658.05 16.53 1,000,000... 177,217.85 17.72 (1) Before cantonal /communal multiplicators, personal tax discount and 12% communal taxes rebate. 499

Table B Other Taxpayers Base cantonal (1) tax Tax rate before tax discount Taxable income CHF CHF % 20,000... 1,615.20 8.08 30,000... 2,879.65 9.60 40,000... 4,226.35 10.57 50,000... 5,620.40 11.24 75,000... 9,248.65 12.33 100,000... 13,042.55 13.04 150,000... 21,027.95 14.02 200,000... 29,422.05 14.71 300,000... 47,024.15 15.67 500,000... 83,878.45 16.78 1,000,000... 178,438.20 17.84 (1) Before cantonal/communal multiplicators, personal tax discount and 12% communal taxes rebate. 500

Switzerland VIII Wealth Tax Table A Basic Tax Taxable wealth Maximum tax for the Over Not over band Percentage CHF 1 CHF 101,418... CHF 177.50 0.175 101,419 202,836... 228.20 0.225 202,837 304,253... 278.90 0.275 304,254 405,671... 304.25 0.300 405,672 608,507... 659.20 0.325 608,508 811,342... 709.90 0.350 811,343 1,014,178... 760.65 0.375 1,014,179 1,217,013... 811.35 0.400 1,217,014 1,521,267... 1,293.10 0.425 1,521,267... 0.450 Table B Supplementary Tax on Basic Tax Taxable wealth Maximum tax for the Over Not over band Percentage CHF 1 CHF 101,418... CHF 0 0 101,419 202,836... 11.40 0.01125 202,837 304,253... 13.95 0.01375 304,254 405,671... 30.45 0.03000 405,672 608,507... 65.90 0.03250 608,508 811,342... 106.50 0.05250 811,343 1,014,178... 114.10 0.05625 1,014,179 1,217,013... 162.25 0.08000 1,217,014 1,521,267... 258.60 0.08500 1,521,268 3,042,533... 1,711.40 0.11250 3,042,533... 0.13500 The above tax rates are basically applicable to taxpayers filing a tax return. Effective cantonal income and wealth tax is determined by multiplying the basic tax by the multiplier applicable for the tax (calendar) year in question, which is 148.5% for tax year 2001, and then by adding the supplementary tax on wealth. Geneva communal tax/each commune levies its taxes as a percentage of the above tax. For 2001 the effective communal tax of the city of Geneva is 45.5% of basic tax. 501

INDIVIDUAL TAX CALCULATION CANTON AND CITY OF ZURICH Calculation for direct federal tax and cantonal and communal taxes, canton and city of Zurich 2000. Assumptions 1. Married couple with two children, member of the Protestant Church, living in Zurich. 2. Employment income CHF175,000 for 2002, net of social security taxes and pension fund contributions. 3. Compensation as director CHF3,200. 4. Securities and savings accounts total CHF140,000; income thereon CHF4,000 (including interest on savings accounts of CHF2,200). 5. Living in own apartment; assessed value CHF180,000, estimated net rental income of personally used real estate property CHF12,500; mortgage CHF100,000; mortgage interest CHF5,000. 6. Income-related expenses CHF7,000 per annum (travel to and from work, external boarding, etc.). 7. Insurance premiums CHF2,300 per annum; surrender value of life and annuity insurance total CHF5,000. 8. Motorcar with market value of CHF25,000. 502

Switzerland Determination of taxable income Direct federal Zurich tax 2002 tax 2002 Income of Income of 2002 2002 CHF CHF Determination of net income Gross income: Income from employment... 175,000 175,000 Secondary income Director s fees... 3,200 3,200 Net income from real estate property... 12,500 12,500 Income from securities and receivables... 4,000 4,000 Total... 194,700 194,700 Deductions: Income-related expenses... 7,000 7,000 Insurance premiums and interest on savings accounts: Direct federal tax Maximum for married couples 3,100 plus 700 for each minor child... 4,500 Cantonal tax Maximum for married couples 4,600 plus 700 for each minor child... 6,000 Interest on mortgage... 5,000 5,000 Other interest on debts... Charitable donations... 300 300 Total... 16,800 18,300 Net income: Total of gross income... 194,700 194,700 Total of deductions... 16,800 18,300 177,900 176,400 Direct federal tax 2002 CHF Zurich tax 2002 CHF Determination of taxable income Net income... 177,900 176,400 Tax-free amounts (social allowances): Direct federal tax: For each child 5,600... (11,200) Cantonal tax: Deduction for each minor child 5,400... (10,800) Taxable income... 166,700 165,600 503

Determination of taxable wealth (Zurich tax, December 31, 2002) Determination of net assets Assets: Real estate property... 180,000 Securities and receivables... 140,000 Surrender value of life and annuity insurance... 5,000 Motorcar... 25,000 Other assets...? Total... 350,000 Liabilities: Mortgage... 100,000 Other debts...? Total... 100,000 Net assets: Total assets... 350,000 Total liabilities... (100,000) 250,000 Taxable wealth CHF Taxable wealth... 250,000 Tax computation Direct federal tax Income tax on taxable income of 166,700 per year (rounded off)... CHF 9,845 Cantonal, communal and parish tax Computation of basic tax: Income tax on taxable income of 165,600... 11,329 Wealth tax on taxable wealth of 250,000... 57 Basic tax... 11,386 Total tax liability Cantonal tax 105% of basic tax... 11,955 Communal tax 122% of basic tax... 13,891 Parish tax (Protestant Church) 10% of basic tax... 1,139 Personal tax... 48 26,033 Total of taxes payable in canton of Zurich... CHF 35,878 504

Switzerland INDIVIDUAL TAX CALCULATION CANTON AND CITY OF GENEVA Calculation for direct federal tax 2001 and cantonal and communal taxes, canton and city of Geneva 2001. Assumptions 1. Foreign executive transferred by an international group to Switzerland for a maximum period of five years; married with two children (aged more than 12); one spouse earns all the income. 2. Employment income, net of social security taxes and pension fund contributions. 2001 CHF Base salary... 153,000 Residency allowances... 22,000 Total... 175,000 3. Compensation as director: CHF3,200. 4. Securities and savings accounts total CHF140,000; income thereon, CHF4,000 (including interest on savings accounts of CHF 2,200). 5. Living in own apartment, assessed value of CHF180,000; estimated net deemed rental income of personally used real estate property: CHF12,500 for Geneva cantonal and federal tax purposes; mortgage: CHF100,000; mortgage interest: CHF5,000. 6. Income-related expenses: CHF7,000 per annum (travel to and from work, external boarding). 7. Sickness and accident insurance premiums: CHF2,000 per annum. Life insurance premiums: CHF300 per annum; surrender value of life insurance: CHF5,000. 8. Medical bills: CHF3,000. 9. Deposits on children s savings accounts: CHF600 per child. 10. Charitable donations: CHF3,500. 11. Car market value: CHF25,000. 505

Determination of taxable income Direct federal tax Geneva tax 2001 2001 Income of Income of 2001 2001 CHF CHF Determination of net income Gross income: Income from employment... 175,000 175,000 Secondary income Director s fee... 3,200 3,200 Net income from real estate property... 12,500 12,500 Income from securities and receivables... 4,000 4,000 Total... 194,700 194,700 Deductions: Income-connected expenses, lump-sum representation expenses... 8,750 8,750 Travel to and from work: Federal tax Depending on distance... 840 Authorized tax deduction: Lower of 10% of gross employment income or residency allowances (1)... 17,500 17,500 Sickness and accident insurance premiums... 2,000 2,000 Life insurance premiums and interest on savings accounts... 2,500 2,500 Medical bills (Note 2 for Geneva tax and Note 3 for direct federal tax)... 1,410 Interest on mortgage... 5,000 5,000 Total... 35,750 37,160 Net income: Total of gross income... 194,700 194,700 Total of deductions... (35,750) (37,160) Less Portion of charitable donations deductible (Note 4 for Geneva tax; Note 5 for direct federal tax)... (3,500) (3,500) 155,450 154,040 Notes: 1. As per 2002 practice. Changes to come, probably by 2004. 2. Only the part exceeding the 1% of the net taxable income. 3. Only the part exceeding the 5% of the net taxable income. 4. Cash donations to charities up to 5% of the net taxable income. 5. Cash donation to charities up to 10% of the net taxable income. 506

Switzerland Direct federal tax Geneva tax 2001 2001 Income of Income of 2001 2001 CHF CHF Determination of taxable income Net income... 155,450 154,040 Tax-free amounts (social allowances): For married persons... For dependent children... (11,200) Taxable income... 144,250 154,040 Determination of taxable wealth (Geneva tax, December 31, 2001) Determination of net assets CHF Assets: Real estate property... 180,000 Securities and receivables... 140,000 Surrender value of life insurance... 5,000 Car... 25,000 Total... 350,000 Liabilities: Mortgage... 100,000 Total... 100,000 Net assets: Total assets... 350,000 Total liabilities... (100,000) 250,000 Taxable wealth Net assets... 250,000 Tax-free amount (social allowance): For married persons with two children... (150,000) Taxable wealth... 100,000 507

Tax computation Direct federal tax Income tax on taxable income of 144,250 (rounded off)... CHF 8,383 Cantonal and communal tax Computation of basic tax: Income tax on taxable income of 154,040... 17,420.75 Wealth tax on taxable wealth of 100,000... 175 Basic tax... 17,595.75 Total tax liability Cantonal tax 147.5% of basic tax (rounded off)... 25,953.75 Less Reduction of initiative 111 12 % of cantonal tax (CHF25,695.60, see note 1)... (3,083.45) Supplementary cantonal tax 1% of basic tax 174.20 Communal tax 45.5% of basic tax... 8,006.05 Supplementary wealth tax on 100,000... Personal tax... 25 Real estate cantonal tax (0.1% of CHF180,000)... 180 31,257.30 Total of taxes payable in canton of Geneva... CHF 39,639.80 Notes: 1. Discount on income cantonal tax only. 2. Exchange rate of the Swiss franc at December 31, 2001: US$1 = CHF1.63. PwC contact For additional information on taxation in Switzerland, contact: Georg Ladner PricewaterhouseCoopers AG Stampfenbachstrasse 52 8035 Zurich, Switzerland Telephone: (41) (1) 630 11 11 Fax: (41) (1) 630 45 15 e-mail: mailto:georg.ladner@ch.pwcglobal.com 508