Gross to net salary of a local executive and total cost to employer comparison for selected countries

Gross to net salary of a local executive and total cost to employer comparison for selected countries Married, two dependant children All the numbers are in EURO Country Gross Salary Employee Income Net To Net % To Marginal Employer Total Gross Cost Top Marginal Total Net Cost Social Tax Employee Employee Income Tax Rate Social To Employer Corporate To Employer Security (B) After Social (on next Euro Security (Salary + SS) Income Tax (After Corp. Tax (A) And Income of Income) (A) Bracket Benefit if Profitable) Tax (C) Percentage Column : 1 2 3 4 5 6 7 8 9 10 11 EUROPE Austria (1) 50,000 8,929 9,393 31,678 63.36% 36% 15,629 65,629 25% 49,222 Belgium (2) 50,000 6,502 12,055 31,442 62.88% 53.50% 16,343 66,343 33.99% 43,793 Cyprus 50,000 2,610 7,793 39,597 79.2% 30% 2,610 52,610 10% 47,349 Czech Republic 50,000 6,250 9,872 33,878 67.8% 32% 17,500 67,500 24% 51,300 Denmark (3) 50,000 4,000 10,600 35,400 70.80% 59% 672 50,672 28% 36,484 Estonia 50,000 1,500 11,327 37,173 74.35% 24% 16,750 66,750 22% 52,065 Finland (4) 50,000 3,216 15,181 31,603 63.2% 44% 11,800 61,800 26% 45,732 France (5) 50,000 10,478 1,481 38,041 76.08% 22.00% 23,356 73,356 34.43% 48,100 Georgia (6) 50,000 0 6,000 44,000 88.00% 12.00% 10,000 60,000 20% 48,000 Germany (7) 50,000 9,863 4,163 35,974 71.95% 29.6% 9,863 59,863 26% 44,059 Germany and Berlin (7) 50,000 9,863 4,163 35,974 71.95% 29.6% 9,863 59,863 40% 35,918 Greece (8) 50,000 8,000 10,441 31,559 63.12% 40% 14,030 64,030 29% 45,461 Hungary (9) 50,000 4,608 17,760 27,632 55.26% 38% 16,000 66,000 16% 55,440 Ireland (10) 50,000 2,529 7,352 40,119 80.24% 42% 5,375 55,375 12.5% 48,453 Italy (11) 50,000 6,604 13,217 30,179 60.36% 39% 28,244 78,244 37.25% 49,098 Latvia (12) 50,000 2,573 11,834 35,593 71.19% 25% 6,887 56,887 15% 48,354 Lithuania 50,000 1,500 16,134 32,366 64.73% 33% 15,500 65,500 18% 53,710 Luxembourg 50,000 5,856 1,465 42,679 85.36% 22.55% 5,775 55,775 29.60% 39,266 Malta 50,000 295 2,290 47,415 94.83% 35% 295 50,295 35% 32,692 Netherlands (13) 50,000 6,428 8,832 34,740 69.48% 42% 3,126 53,126 27.40% 38,569 Norway 50,000 3,900 9,977 36,123 72.25% 40.0% 7,050 57,050 28% 41,076 Poland (14) 50,000 8,138 8,484 33,378 66.76% 40% 6,254 56,254 19% 45,566 Portugal (15) 50,000 5,500 9,429 35,071 70.14% 34% 11,875 61,875 27.5% 44,859 Romania (16) 50,000 380 7,381 42,239 84.48% 16% 5,653 55,653 16% 46,749 Russia 50,000 0 6,500 43,500 87% 13% 1,690 51,690 24% 39,284 Slovakia (17) 50,000 1,736 8,033 40,231 80.46% 19% 4,990 54,990 19% 44,542 Slovenia (18) 50,000 11,050 11,323 27,627 55% 42% 15,450 65,450 25% 49,088 Spain (19) 50,000 2,144 9,931 37,925 75.85% 37% 10,331 60,331 35% 39,215 Sweden (20) 50,000 2,703 18,415 28,882 57.76% 56.0% 16,230 66,230 28% 47,686 Switzerland (Geneva) (21) 50,000 5,305 5,500 39,195 78.39% 28.8% 6,968 56,968 32% 38,738 Switzerland (Zurich) (22) 50,000 7,025 1,794 41,181 82% 13.89% 7,025 57,025 33% 38,207 Turkey (23) 50,000 3,374 12,496 34,130 68.26% 35% 10,750 60,750 30% 42,525 Ukraine (24) 50,000 246 6,468 43,286 86.57% 13% 2,598 52,598 25% 39,449 United Kingdom (25) 50,000 4,357 9,128 36,515 73.03% 22% 5,516 55,516 30% 38,861

Gross to net salary of a local executive and total cost to employer comparison for selected countries Married, two dependant children All the numbers are in EURO Country Gross Salary Employee Income Net To Net % To Marginal Employer Total Gross Cost Top Marginal Total Net Cost Social Tax Employee Employee Income Tax Rate Social To Employer Corporate To Employer Security (B) After Social (on next Euro Security (Salary + SS) Income Tax (After Corp. Tax (A) And Income of Income) (A) Bracket Benefit if Profitable) Tax (C) Percentage Column : 1 2 3 4 5 6 7 8 9 10 11 AMERICA Argentina 50,000 2,344 12,464 35,192 70.38% 35% 8,623 58,623 35% 38,105 Brazil (26) 50,000 1,049 11,327 37,624 75.25% 27.5% 18,650 68,650 34% 45,309 Canada (Ontario) (27) 50,000 1,608 12,449 35,943 71.89% 43.41% 1,795 51,795 36.12% 33,087 Mexico (28) 50,000 867 11,956 37,177 74.35% 24% 4,983 54,983 28% 39,588 USA 50,000 3,825 4,445 41,730 83.46% 13% 3,825 53,825 35% 34,986 USA and Reform 50,000 3,825 0 46,175 92.35% 0% 3,825 53,825 25% 40,369 USA and Illinois 50,000 3,825 5,763 40,412 80.8% 17% 3,825 53,825 38% 33,372 USA and New York 50,000 3,825 7,533 38,642 77.28% 23% 3,825 53,825 46% 29,066 USA and Texas 50,000 3,825 4,445 41,730 83.46% 13% 3,825 53,825 38% 33,372 ASIA/MIDDLE EAST/AFRICA Australia (29) 50,000 750 14,963 34,287 68.57% 47.0% 4,500 54,500 30% 38,150 China (30) 50,000 1,096 10,634 38,270 76.54% 30% 2,648 52,648 33% 35,274 Hong Kong 50,000 0 3,902 46,098 92.20% 20% 0 50,000 17.5% 41,250 India (31) 50,000 0 16,152 33,848 67.70% 34% 0 50,000 42.000% 29,000 Indonesia (32) 50,000 1,000 14,004 34,996 69.99% 35% 2,120 52,120 30% 36,484 Israel (33) 50,000 4,761 13,759 31,480 62.96% 39% 2,965 52,965 29% 37,605 Japan (34) 50,000 5,883 2,740 41,377 82.75% 20% 6,058 56,058 42.00% 32,514 Malaysia (35) 50,000 5,500 9,980 34,520 69.04% 27% 6,000 56,000 28% 40,320 Singapore (36) 50,000 5,597 2,425 41,978 84.0% 15% 3,638 53,638 20% 42,910 South Africa (37) 50,000 137 14,778 35,085 70.17% 40% 137 50,137 29% 35,597 South Korea 50,000 2,628 6,553 40,819 81.64% 29.7% 3,053 53,053 29.7% 37,296 Taiwan 50,000 2,239 5,695 42,066 84.13% 21% 2,346 52,346 25% 39,260 Thailand (38) 50,000 178 10,865 38,957 77.91% 30% 178 50,178 30% 35,125 UAE (39) 50,000 2,500 0 47,500 95.00% 0% 6,250 56,250 0% 56,250 (A) Before application to expatriates of Totalization Agreements and EU Directives on social security. (B) Before application of special expatriate tax rulings, e.g. HQ ruling in France, treaty provisionsand special statutory rules. (C) This marginal income tax rate is applied to the next amount of additional income received. (1) Austria - In column 8, Employer Social Security includes Social Security, employer part and other payroll taxes to be paid by the employer. The tax calculations are based on the assumption that the annual salary is paid out in 14 installments (as usual in Austria) in order to achieve the most favorable tax rate.

(2) Belgium - An average of 7% communal tax has been applied for the calculations. For the employer social security in column 8, an estimate of 35% has been applied. The calculations were based on the assumption of a non working spouse and the children being older than 3. In column 4, the special social security contributions have been included in the calculation. In column 10, the calculation includes an estimates of 3% crisis tax (3) Denmark - Proposal is likely to reduce the corporate tax rate at 28% if the proposal is passed through the parliament. (4) Finland - In column 3, pension insurance payment of 4,6% is applied. A higher rate of 5,8% is applied to employees over years old. In column 4, the National Income Tax and Municipal Tax are included. Church Tax is excluded. Municipal Tax ranges from 16% to 21%.. In this calculation, the percentage of Helsinki (17,5%) is applied (5) France - In column 3 and 7, the flat tax CSG / CRDS of 8% of which 5,1% is deductible is included. Above 100,000 the 11% rate applicable to passive income is used, DLF has opined this is an income tax. In column 3 and 8, 2006 French standard social security contributions rates and brackets and 2006 supplementary social contributions rates. Assuming the employee is not a legal director or member of the board In column 4, 2006 French income tax rates and schedules. Assuming no other personal income is taken into account. Column 10 does not consider local taxes such as professional tax (6) Georgia - Income tax rate is flat and comprises 12%. Corporate income tax is payable at the rate 20% of taxable income by entreprises carying out economic activities in Georgia. Georgian tax legislation does not provide special payroll taxation regime for single persons and married with two children ones. (7) Germany - In column 3 - Social Security calculations including additional employee rate for nursing care is employee is etween 23 and 65 of age with no children (where applicable) In column 4 - The individual Income Tax includes solidarity surcharge; excludin church tax. In column 7 - The marginal tax rates are with the solidarity surcharge of 5,5% of the income tax. Marginal rates shown are new rates originally for 2004 and now for 2005. New top rate for 2007 is 45%. In column 9 - The solidarity surcharge of 5,5% of the corporate tax included. In column 10 - This is the original corporate rate after the failure of the Schroder reform 19% corporate tax rate. The Corporate Income Tax excludes the local trade tax which is, for example, an additional 14% in Berlin. (8) Greece - for employees insured prior to January 1, 1993. (9) Hungary - In column 3, if the individual is a Hungarian national and is employed by a Hungarian entity, 8.5% pension contribution (capped at a salary-level of HUF 5,307,000 p.a.) and 4% health contribution are payable on the gross income. (Furthermore the Hungarian entity has to pay 1% contribution the the so called Unemployment Solidarity Fund.) In column 7, the Hungarian tax rates are progressive up to 38%. In column 8, if the individual is a Hungarian national and is employed by a Hungarian entity, the employer has to pay 29% social security contribution on the gross income and HUF 3450 per month/person Health Fund contribution. (Furthermore the company is obliged to pay 1.5% Training Fund contribution.) (10) Ireland - In column 3 and 8, Calculations in respect of the married individual assume that his/her spouse will not have any taxable income during 2005. In column 4 - The standard rate of corporation tax for a trading company is 12,5% for 2005. The top rate of corporation tax for 2005 is 25%. This rate applies to passive non-trading income. The rate of corporation tax payable by a company depends on whether the income earned by the copny is trading or non-trading. (11) Italy - In column 3, It is assumed that the local executive works in an Italian commercial company where the National agreement of "Dirigenti" (executive) of trading company is applied. In column 4, befor application of treaty provisions. For local tax purpose, it assumes that the individual lives in Milan. In column 10, is included 33% for ordinary corporate tax and 4.25% for regional corporate tax ("IRAP") (12) Latvia - Th emaximum annual income subject to social security contributions is LVL 19,900, however, this is likely to be increased to LVL 22,700. (13) Netherlands - The partner's tax credit has been taken into account even though this credit can only be claimed by the partner.

(14) Poland - there is no tax benefits due to the number of children. We assumed that the executive has non-earning spouse. In order to benefit from the preferential taxation in joint tax return, the executive has to be married the entire tax year and there should be joint marital property regime between them In column 3, the employee social security contributions include the healthcare contribution, which is not technically the part of social security, but it is levied on the employee's remuneration and constitutes the additional burden. The marginal tax bracket percentage is 40% for the income exceeding the amount of 15 206 per annum, 50%, top rate deemed unconstitutional for 2005, but applicable for 2006. (15) Portugal - In column 8, Assuming that they are Board members. Otherwise the social tax applicable would be 10% for the employee and 21.25% for the employer and a cap is also available. Inc olumn 10, the corporate income tax includes a 10% muniocipal surcharge (25%+2.5%) (16) Romania - no personal deductions are deducted for monthly gross incomes over ROL 30,000,000 (equivalent for approx. EUR 824) The figures are rather estimatives, due to specific requirements regarding the computation of certain social security contributions (e.g. number of employees, risk of the activity etc.) (17) Slovakia - In column 3, the amount of contributions is valid until 30 june 2005, the assessment base will change on the basis of the average wage in Slovakia in 2004. In column 4, should the spousal deduction and child bonus be applicable. (18) Slovenia - In column 8, Employer Social Security includes the employer's tax on salaries paid. (if the monthly salary is in excess of SIT 750,000 employer's tax on salaries = 14,8%. Employer's social security contribution = 16,1%) (19) Spain - It is assumed that children are between 3 and 25 years old. (20) Sweden - The employee's pension fee is 7% of the salary and benefits, capped at SEK 349,400. 12.5% of the paid pension fee is deductible against income and 87.5% is creditable against income tax The pension fee is included in the preliminary tax withheld. Employer social security contributions are 32.46% of the salary and benefits. No cap apply. Corporate Income tax is a flat rate tax of 28%, however, due to the possibility to make tax allocations reserves the effective tax rate can be lower. In column 7, the income tax rate includes the average Municipal Tax rate for Stockholm, Sweden (31%). The rate varies depending on where the individual is resident and range between 29% and 36%, including church tax, which you pay if your are a member of the Swedish church (0.8-1.0%) The Swedish Income tax legislation does not vary depending on your civil status, except for Net Wealth Tax purposes where a married couple with common net wealth exceeding SEK 3 million is subject to the tax while the limit for non married individuals is SEK 1.5 millon (including dependent children). For foreigners the Net Wealth Tax is only due if they stay in Sweden for a period exceeding 3 years. (note that if the intention is to stay in Sweden for more than 3 years, Net Wealth Tax is due from year 1) (21) Switzerland (Geneva) - In column 4, the Tax rates of the Canton and City of Geneva have been used. (22) Switzerland (Zurich) - In column 10, Corporate Income Tax rate is progressive, highest rate is used. Taxes are without Church Tax. (23) Turkey - In column 4, stamp duty has been included. (24) Ukraine - All calculations reflects amounts per year In column 3 and 8, the maximum amount subject to social security contributions is capped at UAH 4,100 per employee per month. In column 8, the amounts are calculated based on the minimum total percentage of the employer social security contributions (37%) as it includes, in particular, contributions to the social security fund against accidents at work that depends on the class of professional hazard established by the fund for each employer. The maximum total percentage is equal to 50.6% and relates to e.g. mining industry. (25) United Kingdom - The calculations are based on the UK tax rates for the year ending 5 april 2005 (i.e. those at 1 March 2005) Social security rates are based on a "not contracted out" basis for State pension purposes. Contracted out rates result in slight reduction in social secutity cost up to 31,720. If an employer pension scheme is contracted out the total employee social security will reduced by 432. The total employer social security figur will be reduced by 944 to 270 dependin (26) Brazil - The deductible amount per dependent is R$ 117,00/month per individual. The Social Security Contribution ceiling for the employee is R$ 275,96/month. In column 8, for the purpose of this calculation some labor costs such as vacation, 1/3 additional salary for vacation, prior notice indemnity, etc. were not considered. This calculation included the Employer Social Security (28,8%) plus the FGTS or Government Severance Indemnity Fund for employees (8,5%). In column 10, Corporate Income Tax (25%) plus Social Contribution Tax (9%). (27) Canada (Ontario) - Calculations are based on the 2005 Federal and Provincial rates applicable in the Ontario Province. In columns 3 and 8, Employment Insurance payments are included. Column 4 does not include the Ontario Health Care Premium.

(28) Mexico - Some States impose a 1% or 2% payroll tax which should be paid by the employer to the local authorities. In Mexico City, companies pay a 2% payroll tax. (29) Australia - The amount in column 3 is based on the assumption that the taxpayer is not liable to an additional medicare levy surcharge of 1,5% on taxable income on the basis that the single taxpayer (or the married taxpayer and family) is covered by private patient hospital insurance cover. We have claimed spouse rebate of A$1,535 on the assumption the taxpayer maintains his/her spouse, the spouse's separate net income is less than A$6,421, the spouse is a tax resident of Australia and he/she is not entitled to claim family tax benefit Part B (with children under age of 5) For social security calculation, we have assumed the compulsory superannuation contribution obligation is satisfied by the employer in order to ensure the executive is still paid the gross amount of salary. Compulsory superannuation contribution in Australia is 9% of base salary (capped at maximum earning base of A$122,240) (30) China - Local PRC national employee hypothesis (Social Security is only applicable to local PRC national employees). In column 4, income tax is calculated based on taxable income net of employee Social Security. In columns 3 and 8, the current Social Security Contributions rates applicable to the City of Shanghaï was used. (31) India - The Indian tax year runs from April 1 to March 31. The calculations have, therefore been based on income earned during the year April 1, 2003 to March 31, 2004. The tax rates for the year 2004-2005 include a surcharge of 10% for incomes over and above Rs.8,50,000 and education Cess of 2% on total tax and surcharge. An employee is eligible for a standard deduction from salary of Rs.30,000 or 40% (whichever is less) if income from salary is less than Rs.500,000 and Rs.20,000 (whichever is less) if income from salary is more than Rs.500,000. India has no system of social taxes. Instead for employees whose base salary is less than Rs. 6500 per month, there is a mandatory participation in Employee ProvidentFund (EPF). Employee & Employer contribute @ 12% of base salary respectively. As in the given case, Salary is higher than Rs. 6500 per month there are no applicable mandatory PF contributions In Column 10, the maximum marginal tax rate for the Indian domestic company has been mentioned, i.e., 35% + 2.5% surcharge + 2% education Cess. However, foreign companies in India are taxed at 41.82% (40%+2.5% surcharge + 2% education Cess). (32) Indonesia - In column 3, employee social security is 2% of the gross salary. This represents payment of pension funds (old-age insurance) incurred by the emplyee and is deducted from the employee's salary. In column 8, employer socal security is 4.24% of the gross salary contributed by the employer. Included in the percentage is 0.54% insurance premium, which is included as the employee's gross income in calculation. The 0.54% insurance premium is the lowest rate for companies of services industry. The rate varies according to the type of industry the employer engages in. (33) Israel - Male local executive hypothesis. Income Tax rates are lower for women. (34) Japan - As an assumption for the calculation, the taxpayer's age is less than 40 years old (35) Malaysia - It is assumed that in the case of a married couple with children, those children are under 18 years of age and the spouse has no personal income in Malaysia. (36) Singapore - Local Singaporean national employee hypothesis (Social Security - CPF - is only applicable to Singaporean and Singapore Permanent Resident employees). (37) South Africa - where expat is not required to return home at the end of the contract period, unemployment insurance fund contributions of 1% of Gross Salary up to R106032pa is withheld from employee and an equal amount is contributed by the employer. (38) Thailand - It is assumed that in the case of a married couple with children, the spouse is non-working and the two children are attending school in Thailand. (39) UAE - The social security is calculated on the Gross Salary of the employee. While calculating social security it does not matter whether or not the employee is married or single since the calculation is based as follows: 12.5% of employees gross salary is contributed by the employer, 5% of the employees gross salary is contributed by the employee and 2.5% of the employees gross salary is contributed by federal government. The social security only applies to UAE nationals and not expartriates. There is no individual or corporate income tax in the UAE