9.3. Tax Regime

9.3. Tax Regime Applicable To Holding Tokens In France

Subscribers from all countries are responsible for complying with the applicable tax regime in their respective countries.

The following describes the material French income tax consequences to Subscribers that are tax residents in France of subscribing and disposing of the tokens. It does not purport to be a complete analysis or listing of all potential tax effects of subscribing and disposing of the tokens to any particular investor.

All of the following is subject to change. Such changes could apply retroactively and could affect the consequences described below.

Subscribers of the 4IR tokens are urged to consult their own tax advisors regarding the tax consequences of the purchase, ownership and disposition of tokens in light of their particular circumstances.

a) French resident individuals

(i) French resident individuals that do not usually acquire digital assets in view of their resale

Gains realized by French resident individuals that do not usually acquire digital assets in view of their resale upon disposal of the 4IR Tokens would be subject to the so-called flat tax of 30% (which includes personal income tax at a fixed rate of 12.8% and 17.2% social levies).

French resident individuals that do not usually acquire digital assets in view of their resale, will be taxed on the gains realised upon disposal of their 4IR Tokens where the consideration consists of either:

• any currency which is legal tender,

• any goods other than digital assets,

• any service, or

• other digital assets together with one of the above.

Pursuant to Article 150 VH bis of the French tax code (Code general des impôts), the taxable gain is equal to the difference between (i) the sale price and (ii) a portion of the total acquisition price of the entire portfolio of digital assets held by the French resident individual, which is determined by multiplying the total acquisition price of the entire portfolio of digital assets by a ratio between the sale price and the total value of the portfolio: Taxable gain = sale price – (total acquisition price x (sale price / value of the portfolio)).

The French tax authorities have issued guidelines regarding the calculation of the taxable gains. In case the tokens are exchanged against other digital assets, the gain is not taxed immediately. The taxation of the gain is differed and occurs upon sale of the digital assets received or exchange for services or goods (other than digital assets).

A taxation threshold applies where the aggregate price of the digital assets disposed during a given year does not exceed €305. In that case, the gains are not taxed.

Capital losses on digital assets may be offset exclusively against capital gains on digital assets realized during the same year.

(ii) French resident individuals that usually acquire digital assets in view of their resale

Gains realized by French resident individuals that usually acquire digital assets in view of their resale are taxed as business incomes (bénéfices industriels et commerciaux) and are subject to personal income tax under the standard progressive scale (barème progressif de l'impôt sur le revenu) and to social contributions.

The French tax authorities have indicated that the characterization of usual acquisitions in view of resale should be analyzed on a case by case basis. The following criteria would be taken into account: number of transactions, frequency of the transactions and respective importance of the incomes generated by this activity against other incomes.

Please note that, as of 1st January 2023, the French tax code aligned the "professional" regime for digital assets with the regime for stock market transactions carried out under conditions similar to those of a professional. Gains realized by French resident individuals that usually acquire digital assets in view of their resale would therefore be taxed as non- commercial income (bénéfices non-commerciaux) and subject to personal income tax under the standard progressive scale and to social contributions. The characterization of an usual activity should be aligned accordingly.

b) French resident companies subject to corporate income tax

Gains realized by French resident corporate entities would be subject to French Corporate Income Tax (CIT) under standard conditions.