US Taxation and Refund of German Withholding Tax

Under German law, German company dividends are subject to a 21.1% German withholding tax. Under the terms of the Germany-U.S. Income Tax Treaty (the “Treaty) however, U.S. shareholders may be refunded up to 6.1% of the withholding tax from the German government. Qualified U.S. pension funds, which are eligible under the new Treaty, may be refunded the entire 21.1% withholding tax.. Under U.S. law, U.S. shareholders may be able to claim a foreign tax credit or itemized deduction on their U.S. Federal income tax return for the non-refundable 15% remainder. In the case of a U.S. resident taxpayer, 100% of the dividends from the company are considered from foreign source. Additional U.S. Federal tax treatment is addressed below.

Summary of German Withholding Tax Paid and Refund and Foreign Tax Credit Available for U.S. Shareholders (Not applicable to Daimler stock held in a pension fund).

German Withholding Tax	21.1%
Less: Refundable Portion from German Tax Authorities	6.1%
Amount Eligible for U.S. Foreign Tax Credit	15.0%

What process do U.S. shareholders utilize to obtain a refund of the 6.1% of German taxes withheld on any dividends paid in 2008 or future years?

If you are a record holder of ordinary shares who is registered in Daimler’s share register, our transfer agent, the Bank of New York Mellon, will initially receive your dividends and distribute them to you. The U.S. transfer agent can assist you in obtaining the refund of German withholding tax. We recommend that you contact the Bank of New York Mellon regarding further information on fees and conditions. Consistent with past practice, the U.S. transfer agent will file a claim for refund with the German tax authorities as soon as practicable after the dividend payment date. A response is expected within 8 – 12 weeks following submission of the claim. Refund checks will be mailed promptly following receipt of funds from the German government.

If you have any questions about the process, contact the Bank of New York Mellon toll-free at 1-800-470-7418, or in writing to:

Daimler
c/o The Bank of New York Mellon
P.O. Box 11258
New York, NY 10286-1258
e-mail: shareowner-svcs@BankofNY.com

If you are a record holder of ordinary shares who is registered in Daimler’s share register, and you would prefer to claim the refundable portion directly from German tax authorities, then you must submit a special claim. Your refund claim must include the original or certified copy of the bank voucher that you received from the U.S. transfer agent. This voucher must show the amount of tax that was withheld. You must submit your claim within four years from the end of the calendar year in which you received the dividend. You can obtain a form for your claim for refund from:

(i) the German tax authorities at the same address where you would file any refund claim, which is:

Bundeszentralamt fuer Steuern,
D-53221 Bonn
Germany, or

(ii) the Embassy of the Federal Republic of Germany,
4645 Reservoir Road, N.W.,
Washington, D.C. 2007-1998.

If you have not done so within the last three years, you must also submit to the German tax authorities IRS Form 6166, Certification of United States Residency. A shareholder seeking the Form 6166 certification must complete IRS Form 8802, Application for United States Residency Certification. A user fee is charged by the IRS to process Form 8802. The user fee is $35 for a request for up to 20 original Forms 6166 issued under a single taxpayer identification number (“TIN”). Additional user fees apply to additional requests for Form 6166 under the same TIN or requests for Form 6166 under a different TIN. The user fee must be in the form of a check or money order payable in U.S. dollars to the United States Treasury.

You must send the completed Form 8802, all required statements and documentation and the appropriate user fee to the Internal Revenue Service, P.O. Box 42530, Philadelphia, PA 19101-2530, USA, or by private delivery service to Citibank, Attn: IRS Lockbox Operations, 1617 Brett Road, New Castle, DE 19720-2425. The Certification requests are generally processed within 45 days from the date received. This certification remains valid for three years. Form 8802 and the related instructions can be obtained from the IRS website at http://www.irs.gov.

For more information on the "Reduced Taxation under the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA)", please see the corresponding chapter of this Q&A section.