U.S. FEDERAL INCOME TAXATION
For a discussion of certain U.S. federal income tax considerations relating to the purchase, ownership and disposition of the Notes, please refer to the section entitled “Taxation — United States Federal Income Taxation” in the accompanying prospectus.
In addition, subject to certain limitations, a U.S. holder may be entitled to a credit against its U.S. federal income tax liability, or at such holder’s election, may be eligible for a deduction in computing such holder’s U.S. federal taxable income, for any non-refundable non-U.S. taxes withheld (at a rate not exceeding any applicable treaty rate) with respect to interest payments on the Notes. An election to deduct creditable foreign taxes instead of claiming foreign tax credits must be applied to all foreign taxes paid or accrued in the U.S. holder’s taxable year. Interest generally will constitute “passive category income” for purposes of the foreign tax credit. The rules governing foreign tax credits are complex, and Final Regulations issued by the U.S. Treasury (the “Final FTC Regulations”) have imposed additional requirements that must be met for a foreign tax to be creditable, and the Issuer does not intend to determine whether such requirements will be met. However, the IRS has issued notices (the “Notices”) indicating that the U.S. Treasury Department and the IRS are considering proposing amendments to the Final FTC Regulations. The Notices allow taxpayers, subject to certain conditions, to defer the application of many aspects of the Final FTC Regulations until the date when a notice or other guidance withdrawing or modifying this temporary relief is issued (or any later date specified in such notice or other guidance). U.S. holders should consult their tax advisors concerning the foreign tax credit and deductibility implications of any non-U.S. taxes withheld.
With respect to gain or loss realized by a U.S. holder on the sale or retirement of a Note (which generally will be U.S. source), the creditability of non-U.S. taxes imposed on disposition gains is subject to significant, complex and evolving limitations. Accordingly, U.S. holders should assume that they may not be able to obtain foreign tax credits for non-U.S. taxes (if any) imposed on the disposition of Notes in many circumstances. The rules relating to foreign tax credits are complex, and each U.S. holder should consult its own tax advisors regarding the U.S. federal income tax consequences (including creditability, deductibility and determination of amount realized) with respect to any non-U.S. tax imposed on a sale or other disposition of the Notes and such U.S. holder’s ability to obtain an exemption from or a refund of such non-U.S. taxes in its particular circumstances.