JPMorgan - KASE

income may be subject to withholding of Kazakhstan tax at a rate of up to 20% unless reduced
or exempted by an applicable double taxation treaty. Payments, if any, under the guarantee to a
noteholder entitled to the benefits of a Kazakhstan double taxation treaty may be subject to a
reduced rate of withholding tax. For example, noteholders entitled to the benefits of the
Kazakhstan double taxation treaty with United States, Germany, Italy, Sweden or the United
Kingdom would be entitled to a reduced rate of withholding tax of 10%.
Consequences to Foreign Holders
Under the Code, as presently in effect, payments of principal and interest on the notes to an
individual who is a beneficial owner and is a non-resident of Kazakhstan or to a legal entity that
is neither established in accordance with the legislation of Kazakhstan, nor has its actual
governing body (place of management) in the Republic of Kazakhstan, nor maintains a
permanent establishment (under the Code or applicable treaty) or otherwise in any manner has
no taxable presence in Kazakhstan will not be subject to taxation in Kazakhstan, and no
withholding of any Kazakhstan tax will be required on any such payments.
Payments under the Kazakhstan-Netherlands Income Tax Treaty
HKM, is a resident for Kazakhstan income tax and treaty purposes. The issuer will on-lend the
loan proceeds to HKM. HKM will make payments of principal and interest to the issuer to fund
the issuer's obligations to make payments under the Notes. The interest payments made from
HKM to the issuer will be subject to Kazakhstan withholding tax at ten (10) percent pursuant to
the CONVENTION BETWEEN THE KINGDOM OF THE NETHERLANDS AND THE REPUBLIC OF
KAZAKHSTAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL
EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL, effective January 1, 1996. The
intercompany loan agreement between HKM and the issuer will contain assurances that any
amounts paid subject to withholding will be grossed-up to compensate for any withholding tax
withheld and that the issuer will receive the full amount of the payment required as if no
withholding tax were paid on such payments.
Certain Dutch Income Tax Considerations
General
The information set out below is only a summarised description of certain material Dutch tax
consequences of the purchase, holding and disposition of the notes and it does not purport to be
a comprehensive description of all the tax considerations that may be relevant to a decision to
purchase the notes. This summary does not describe any tax consequences arising under the laws
of any state, locality or taxing jurisdiction other than the Netherlands.
This summary is based on the tax laws of the Netherlands as in effect on the date of this offering
memorandum, as well as regulations, rulings and decisions of the Netherlands and its taxing and other
authorities available on or before such date and now in effect. All of the foregoing is subject to change,
which change could apply retroactively and could affect the continued validity of this summary.
Because it is a general summary, holders of the notes should consult their own tax advisors as to
the Dutch or other tax consequences of the purchase, holding and disposition of the notes,
including, in particular, the application to their particular situations of the tax considerations
discussed below, as well as the application of state, local, foreign or other tax laws.
Withholding tax
All payments to be made by the issuer under the notes may be made free of withholding or
deduction for or on the account of any taxes of whatsoever nature imposed, levied, withheld or
assessed by the Netherlands or any political subdivision or taxing authority thereof or therein.
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