Investor News

Budapest, April 22, 2013 15:00

Magyar Telekom (Reuters: MTEL.BU and Bloomberg: MTELEKOM HB), the leading Hungarian telecommunications service provider announces that, in accordance with the resolution of the Company’s Annual General Meeting held on April 12, 2013, the Company will pay its shareholders HUF 50 gross dividend per ordinary Magyar Telekom share (ISIN number: HU0000073507) for the business year 2012. Dividend payment will start on May 16, 2013.

The record date related to the dividend payment is May 9, 2013. Shareholders who hold Magyar Telekom shares in their securities accounts on that day – May 9, 2013 - will receive a dividend. The last day when shares can be bought on the Budapest Stock Exchange that will be entitled to the dividend paid for the 2012 business year is May 6, 2013. In line with the lapse period specified in the Civil Code the dividend for 2012 can be collected for a further 5 years, starting from the first day of the dividend payment (i.e. not later than May 16, 2018).

The dividend will be transferred to shareholders’ accounts - attached to securities accounts at the account-keepers, or to another bank account specified by the shareholder to its account keeper - from May 16, 2013. The dividend can only be transferred if the account keeper sends all information in the specified form to the Central Depository and Clearing House (KELER Ltd.), acting as agent for the dividend payment of Magyar Telekom Plc.. Neither Magyar Telekom Plc. nor KELER Ltd. is responsible for any payment delay resulting from insufficient or incomplete information provided by account keepers or resulting from the time required for data processing. We would like to take this opportunity to remind our shareholders to contact their account keeper and check that they have all the information necessary for the dividend payment and draw their attention to submit their data in the course of the recording process. If the account keeper does not submit the data relating to the shareholder, required for dividend payment, in the course of the recording process to KELER Ltd., but at a later date, then Magyar Telekom will transfer the dividend through KELER Ltd. once in a month, by the 5th working day following the month of the reporting.

In case of individuals
In case of individuals, Magyar Telekom Plc. will, through its agent (KELER Ltd.), transfer the dividend after deduction of the personal income tax to the account-keeper’s bank account, or to another bank account specified by the shareholder to its account keeper. In case of domestic private individuals, the following data is required for dividend payment: name, birth name, date and place of birth, mother’s birth name, nationality, tax ID, sex and address of the shareholder. In case of foreign private individuals, the following data is required for dividend payment: name, birth name, date and place of birth, mother’s birth name, passport number or tax ID issued by the Hungarian tax authority, sex, nationality, permanent address of the shareholder and address (place of residence) in Hungary, if the shareholder has any. Dividends paid for business year 2012 are subject to a personal income tax of 16%. (Section 8 (1) and Section 66 (1) a) of Act CXVII of 1995 on Personal Income Tax (“Act on Personal Income Tax”))
If a foreign domiciled individual shareholder intends to receive its dividend through application of a preferred tax rate in accordance with inter-state treaties on avoidance of double taxation, such shareholder is obliged to submit to the Issuer Department of KELER Ltd. (1075 Budapest, Asbóth u. 9-11.) not later than May 10, 2013 all the documents specified in Annex 4 to the several times modified Act XCII of 2003 on Tax Procedures (“Tax Procedures Act”). We remind account-keepers that we can only accept certificates of residency issued by foreign tax authorities regarding the tax year 2013; a copy of the document issued in English and translated into Hungarian by a specialist translator will be acceptable. If a certificate of beneficial ownership is also required by the treaty on avoidance of double taxation, this certificate shall also be translated into Hungarian by a specialist translator to be acceptable. The certificate of beneficial ownership can also be issued in Hungarian. If neither certificate of residency, nor a notice that documents will be presented later, arrives at KELER by May 10, 2013, the dividend will be transferred after deduction of 16% income tax. If a foreign domiciled individual shareholder has the documents specified in Annex 4 to the several times modified Tax Procedures Act and there is an inter-state treaty on avoidance of double taxation based on which a preferential tax rate can be used, but the legal entity fails to submit the documents to KELER Ltd. by May 10, 2013 and therefore receives dividend after deduction 16% income tax, he may apply, in accordance with Section 5 of Annex 4 to the Tax Procedures Act, to the Significant Taxpayers’ Tax Office (‘Kiemelt Adózók Adógazgatósága’) of the National Tax and Customs Administration (“NAV”) of Hungary) and claim back the difference between the preferential tax rate and 16%. The tax authority shall remit the amount of such tax difference to the payment account specified by the foreign domiciled individual shareholder.

In case of shares held on long term investment account (”Tartós Befektetési Számla”)
In case of shares held by domestic and foreign individuals on long term investment account, no tax will be deducted from the dividends (pursuant to Section 67/B (6) b) of Act on Personal Income Tax and Annex 4 to the Tax Procedures Act). Account-keepers are required to indicate to KELER Ltd., acting as agent in the dividend payment of Magyar Telekom Plc., that shares held on long term investment account parallel with claiming the dividend, otherwise the dividends will be paid after deducting a personal income tax of 16%.

In case of legal entities
In case of legal entities, Magyar Telekom Plc. will, through its agent (KELER Ltd.), based on the specified data (in the case of Hungarian domiciled legal entities: company name, registered office, tax ID number; in the case of foreign domiciled legal entities: company name, registered office), transfer the dividends to the bank account specified by the shareholder’s account keeper. In case of legal entities, no tax will be deducted from the dividends .

In case of nominees
The dividends will be paid to nominees, as defined in the Capital Markets Act CXX of 2001, based on the shareholder identification ordered for this purpose. As a general rule, the dividends will be paid to nominees after deducting personal income tax of 16%.If the account keeper of the nominee specifies in the course of the recording process the number of shares held by individual shareholders and the number of shares held by legal entities (not individual shareholders) from the total number of shares represented by the nominee, then the dividends will be paid after applying the relevant tax rate. In the case of dividends for shares held by legal entities, no tax will be deducted from the dividends. In the case of shares held by individual shareholders, personal income tax of 16% will be deducted from the dividends. If the shares represented by the nominee relate to foreign domiciled individual shareholders who intend to receive their dividends through the application of a preferred tax rate, then those shareholder should be recorded separately in the course of the recording process and they should act according to the paragraph above starting with “If a foreign domiciled individual shareholder”.
We would like to draw the attention of nominees that Magyar Telekom Plc. will apply the tax rate and perform its data supply obligation based on the information received in the course of the recording process and according to the appropriate regulations. As the taxation of dividends paid to legal entities and those paid to private individuals are different, nominees will be liable for damages (e.g. legal consequences) caused by incorrect information being provided by the nominees.

Tax certificates
Magyar Telekom Plc. will issue and will send to its shareholders no later than January 31, 2014, a certificate stating the name of payer, the name (corporate name), tax identification number, registered office (sites) or home address of the income’s recipient, the legal title of payment, the year when the dividend was paid, the date of issue of the certificate, the tax base and the amount of tax assessed.
In cases where dividends are paid to nominees and the nominee declares, pursuant to Section 9 of Annex 4 to the Tax Procedures Act, in a duly signed document issued by the last day of the calendar year when the payment is made, in Hungarian or Hungarian and English language, the name (corporate name), permanent residence, registered offices, date and place of birth and nationality of the foreign persons to whom the dividend is (to be) paid and the amount of dividend (to be) paid to them in HUF, then Magyar Telekom Plc. will issue the tax certificate and will perform its data supply obligation based on this nominee declaration.
If the above mentioned detailed declaration is not available, Magyar Telekom Plc. will issue the tax certificate stating the name (corporate name) and registered office of the nominee and in the case of Hungarian domiciled entities, the tax identification number and the amount of dividends paid will be provided.

Dividend payment for previous years
Magyar Telekom Plc. paid a HUF 74 gross dividend for the business year 2007, HUF 74 gross dividend for the business year 2008, HUF 74 gross dividend for the business year 2009, HUF 50 gross dividend for the business year 2010 and HUF 50 gross dividend for the business year 2011.
Payment of uncollected dividends from prior years can be requested in the same way and subject to the above conditions, simultaneously with the dividend for 2012.

Magyar Telekom Plc. started payment of the 2007 dividend on May 27, 2008. In line with the lapse period specified in the Civil Code, the dividend for 2007 can be collected for a further 5 years, starting from the first day of the dividend payment, i.e. not later than May 27, 2013. We would like to remind shareholders who have still not received their dividend for 2007 to contact their securities account manager and request payment of the dividend within the deadline mentioned.
Dividends paid for previous years for private individuals are subject to 16% personal income tax.
In case of legal entities, no tax will be deducted from the dividends for prior years. 

Please call Magyar Telekom’s toll free number +36 80 38 38 38 or contact
the office of KELER Ltd. (1075 Budapest, Asbóth u. 9-11) +36 1 483 6100
if you have questions on any aspect of the dividend payment.

This investor news may contain forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should not have undue reliance placed upon them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors are described in, among other things, our Annual Reports for the year ended December 31, 2012 available on our website at https://www.telekom.hu.