1. Taxation of Foreign Nationals in the U.S. avec Houston Accueil – part deux February 2011 Serge Heidrich, Gus Juneau

2. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY KPMG TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (I) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (II) PROMOTING, MARKETING, OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN. You (and your employees, representatives, or agents) may disclose to any and all persons, without limitation, the tax treatment or tax structure, or both, of any transaction described in the associated materials we provide to you, including, but not limited to, any tax opinions, memoranda, or other tax analyses contained in those materials. The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.

3. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Agenda Executive Summary – Income Tax Residency Issues ITINs Sale of Home Stock Awards and Stock Options FBAR Tax Treaty Exit Tax Estate Tax Questions

4. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Executive Summary Overall maximum income tax rate in U.S. is 35% (10, 15, 28, 33 and 35%) Social tax maximum rate is 5.65% (7.65% 2010) Deductions include: items for home purchase (mortgage interest and real estate taxes) charitable contributions spouse and children Taxation of residents on worldwide income Unique rules for year of arrival and departure

5. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Becoming a U.S. Resident Establishing U.S. Residency Immigration status – Green Card Test Substantial presence In general, if alien is physically located within the U.S. during 183 days then they will typically be considered a resident. Look-back provision, if alien was in the U.S. for more than 31 days during the current year and if the total of 1/3 of the days spent in the U.S. in the first prior year and 1/6 of the days spent in the U.S. in the second prior year and the number of days spent in the U.S. during the current year is greater than 183 days then the alien is a resident.

6. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Example – Substantial Presence Test John Doe enters the U.S. on October 1, 2009 with L-1 Visa. He has been in the U.S. 15 days between January 1, 2009 and October 1, 2009. Total days in U.S.: 107 Taxed as a nonresident for 2009

7. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. 12/31/08 4/1/08 1/1/08ResidentNon-resident Example – Substantial Presence Test (continued) John Doe enters the U.S. on April 1, 2009 with L-1 Visa He has been in the U.S. 0 days between January 1, 2009 and April 1, 2009 Total days in U.S.: 274 Taxed as a resident for 2009 for portion of year after April 1, 2009

8. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Substantial Presence Test Calculation: Physical presence in the United States Present at least 31 days during the current year; and Sum of current year days, plus 1/3 of prior year days, plus 1/6 of second preceding year days equals or exceed 183 days Includes partial days

9. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Example – Substantial Presence Test (Look-Back Rule) John Doe enters the U.S. on August 1, 2009 with L-1 Visa He has been in the U.S. 0 days between January 1, 2009 and August 1, 2009 Total days in U.S. in 2009:151 Total days in U.S. in 2008:120 Total days in U.S. in 2007:6 Taxed as a resident for 2009 200920082007 ==== 151 192 Days +1/3120+1/66

10. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. U.S. Tax System – Nonresident Taxable on U.S. source income Tax Return 1040NR Due April 15 of the following year Generally taxed on salary at graduated rates Personal exemption (possible for family members depending on resident country) No standard deduction Single or married filing separate rates

11. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. U.S. Tax System – Resident Basis Taxable on worldwide income Tax Return 1040 Due April 15 of following year Dual residency filing during initial year Foreign tax credit for taxes paid to another country Personal exemption Standard deduction (full year residents only)

12. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Nonimmigrant Visas A Diplomats and foreign government officials B Temporary visitors for business or pleasure F Students enrolled in U.S. colleges G Employees of international organizations H Perform services for, or receive training from certain employers and distinguished merit J Students, scholars, trainees, and teachers L Intracompany transferees M Full-course study at vocation institution Q International cultural exchange program TN Trade NAFTA (TD for their dependents)

13. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. U.S. Tax System – First Year Filing Options Resident versus nonresident Election to be taxed as a resident for part of the year Election to be taxed as a resident for the whole year

14. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. U.S. Taxation of Dual Status Taxpayers Occurs when an individual is both resident alien and nonresident alien in the year Generally occurs in the year that an individual arrives in or departs from the U.S.

15. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Residency Start Date First-day test is met Green card test met on first day present in the U.S. with a green card SPT met first day physically present in the U.S. 10 days de minimis Used for start date determination Can exclude up to 10 days total Can exclude only if all the days in that period can be excluded

16. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Individual Tax Identification Numbers Who are they for? Spouse not on a working Visa (L-2 will have ability to apply) Dependents Why are they necessary? IRS requires ITIN or Social Security Number to file tax returns. Dependent deductions are disallowed if no ITIN or social security number is provided on the returns. Obtaining an ITIN Complete Form W-7 Obtain notarized copies of passport and visa page Attach to front of tax return

17. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Other Issues – Sale of Home If residence sold during U.S. residency the gain may be taxable. Gain is determined by looking at purchase and sale amounts using the exchange rates at the respective dates. All or portion of gain excluded if lived in home as principal residence 2 out of the last 5 years. Exclusion amount is limited to $500,000 for married taxpayers filing jointly, and $250,000 for single heads of household and married taxpayers filing separately.

18. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Other Issues – Mortgage Gain Any gain on repayment of a foreign currency mortgage loan is considered taxable income. Gain/loss is determined by comparing the dollar equivalent at time of acquisition with the dollar equivalent at disposal. If there is a loss, there is not tax deduction. If there is a gain, it is taxable.

19. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Example – Mortgage Gain Mortgage repayment amount EUR$673,000 Date mortgage was taken out Feb 2008 (exchange rate.673) Date mortgage extinguished Feb 2010 (exchange rate.721)

20. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Example – Mortgage Gain (continued) Mortgage Gain: EUR $ AmountExchange RateUS $ Amount Original Mortgage AmountEUR$673,000.673US$1,000,000 Mortgage Amount @SaleEUR$673,000.721US$933,000 Mortgage GainEUR$0US$67,000

21. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Stock Awards These are restricted stock or RSUs The value of the stock is taxable on the date of vesting U.S. will allow foreign tax credit for U.S. tax liability up to portion of awards considered foreign source Subject to withholding at time of vesting Federal Income Tax 25% (may be less than actual liability) Social Security 4.2% (if applicable) Medicare 1.45%

22. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Stock Options Options are not taxed until exercise Entire spread will be subject to tax if exercised during U.S. residency period Subject to withholding at time of exercise Federal Income Tax 25% (may be less than actual liability) Social Security 4.2% (if applicable) Medicare 1.45%

23. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR) If a U.S. person; who has a financial interest in or signature or other authority over any financial accounts, in a foreign country, and if the aggregate value of the accounts exceeds $10,000 at any point during the year, the U.S. person must file an FBAR. Penalties could be significant. Effective for 2011 tax returns, individuals who hold more than $50,000 in “specified foreign financial assets” will be required to report information about those assets on their U.S. income tax returns. The disclosure will be made on new Form 8938, Statement of Foreign Financial Assets.

24. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Exit Tax What is an Exit Tax? Does the U.S. Have an Exit Tax? Who is Subject to the Exit Tax? How Does the U.S. Exit Tax Work? Is There Any Way to Avoid Paying the Exit Tax? Once I’ve Paid the Exit Tax, Am I Finished with U.S. Taxation? What Happens When I Sell the Property Later and Pay Tax on the Gain?

25. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. What is an Exit Tax? Most countries have a residence-based tax system. Residents pay tax on worldwide income. Nonresidents only pay tax on income that arises in that country. Some countries impose an “exit tax” on people who cease to be a resident. A person who is subject to an exit tax is treated as if all his or her assets were sold for Fair Market Value (FMV) at the time the individual ceased to be a resident of that country. The resulting gain is subject to tax.

26. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Does the U.S. Have an Exit Tax? Yes. Effective June 17, 2008, President Bush signed the Heroes Earnings Assistance and Relief Act of 2008 (“the Act”). This Act created for the first time an exit tax applicable to certain former citizens and residents of the United States. Replaces old expatriation tax that applied to certain former U.S. citizens and residents for 10 years after expatriation.

27. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Who is Subject to the Exit Tax? Under the new law, a “covered expatriate” is defined as: A U.S. citizen who gives up his or her citizenship, or A permanent resident (“green card” holder) who gives up his or her green card after having it held IN eight of the prior 15 years And the former citizen or former permanent resident meets certain other requirements.

28. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Who is Subject to the Exit Tax? Example of a “Long-Term Resident” Adam received his U.S. green card on November 1, 2002. He terminated his U.S. residency on August 1, 2009. Adam is considered a “Long-Term Resident” since he held the U.S. green card IN at least eight out of the 15 years before his expatriate date. Any partial year counts as a tax year for purpose of this definition.

29. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Who is Subject to the Exit Tax? The conditions that former citizens or green card holders must have to be considered a “covered expatriate” are: Their net worth is $2 million or more on the expatriation date, or Their average U.S. federal income tax liability for the five- year period ending before the year of expatriation exceeds $145,000 (2009 and 2010 amount), or They fail to certify to the U.S. Internal Revenue Service (IRS) that they have been in compliance with U.S. Federal obligations for the past five years.

30. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. How Does the U.S. Exit Tax Work? For assets owned when the person first become a U.S. resident, gain/loss is figured with reference to the asset’s value at the date U.S. resident status took effect. Can elect to use original cost instead. Election applies to all property – cannot apply on an asset by asset basis. If the gain from the deemed disposition exceeds $627,000 (in 2010), the covered expatriate must pay U.S. income tax on the gain in excess of $627,000.

31. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. How Does the U.S. Exit Tax Work? (continued) When is the tax due on the mark-to-market on deemed sale of the property assets? The tax is paid with the return, or the covered expatriate can make an irrevocable election to defer the payment of the additional tax on these particular assets. The election is on an asset-by-asset basis. Treaty rights are waived and adequate security is required to IRS.

32. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Is There Any Way to Avoid Paying the Exit Tax? No, but it can be postponed. A covered expatriate can elect to defer payment of the exit tax until the year that the property that is subject to the exit tax is actually sold.

33. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Tax Treaties Treaties may mitigate double taxation Required to disclose the treaty position U.S. France Treaty Two benefits to note Dividends taxed at preferred rate 15% (special provision for closely held 5%) SS and Pension – source country taxation Contributions by employer to home country plans not taxable in host country to the extent excluded in home country

34. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Estate Tax If Domicile in the US – worldwide assets are taxed Life insurance, retirement plans, shares, real estate, etc. $5million exclusion 35% highest rate Expires 2012

35. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Questions… State Taxes Travel for work Self-employment Earnings Offshore Shares Withholding at source, taxed in U.S. but provision for FTC

36. © 20XX KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Questions? Gus Juneau +17133193683 gjuneau@kpmg.com Serge Heidrich +17133193254 sheidrich@kpmg.com