Measures Concerning Taxation (each, a Specified Financial Institution) that keeps its notes deposited with, and receives the interest through, a Japanese Payment Handling Agent with
custody of the notes (the Japanese Custodian), and such recipient submits through such Japanese Custodian to the competent tax authority the report prescribed by the Law, no withholding tax is levied on such interest. However, since the
issuer of the notes is not in a position to know in advance the recipients such tax exemption status, the recipient of interest falling within this category should inform the issuer of the notes through a paying agent of its status in a timely
manner. Failure to so notify the issuer of the notes may result in the withholding by the issuer of the notes of a 15.315% income tax.
(3) If an individual resident of Japan or a Japanese corporation (except for a Designated Financial Institution which complies
with the requirements described in paragraph 2.1(4)) receives interest on the notes not through a Japanese Payment Handling Agent, income tax at the rate of 15.315% of the amount of such interest will be withheld by the issuer of the notes.
(4) If a Japanese bank, Japanese insurance company, Japanese financial instruments business operator or other Japanese
financial institution falling under certain categories prescribed by the Cabinet Order under Article 6, Paragraph (9) of the Act on Special Measures Concerning Taxation, each, a Designated Financial Institution, receives interest on the notes
not through a Japanese Payment Handling Agent and the requirements concerning the Interest Recipient Information and the Interest Recipient Confirmation or the Written Application for Tax Exemption as referred to in paragraph 1.1(1) are complied
with, no withholding tax will be imposed.
2.2. Redemption Gain
If the recipient of the Redemption Gain is an individual resident of Japan or a Japanese corporation, such Redemption Gain
will not be subject to any withholding tax.
3. Special Additional Tax for Reconstruction from the Great East Japan
Earthquake
Due to the imposition of a special additional withholding tax of 0.315% (or 2.1% of 15%) to secure funds
for reconstruction from the Great East Japan Earthquake of March 11, 2011, the withholding tax rate has been effectively increased to 15.315% during the period beginning on January 1, 2013 and ending on December 31, 2037. On or after
January 1, 2038, all references to the tax rate of 15.315% in the foregoing descriptions will read 15%. There is also certain special additional tax imposed upon regular income tax due other than by way of withholding for individual
non-residents
of Japan, as referred to in the foregoing descriptions, for the period mentioned above.
Capital Gains, Stamp Tax and Other Similar Taxes, Inheritance and Gift Taxes
Gains derived from the sale of notes outside Japan by an individual
non-resident
of
Japan or a
non-Japanese
corporation having no permanent establishment within Japan are, in general, not subject to Japanese income tax or corporate tax.
No stamp, issue, registration or similar taxes or duties will, under current Japanese law, be payable in Japan by holders of
the notes in connection with the issue of the notes, nor will such taxes be payable by holders of the notes in connection with their transfer if such transfer takes place outside Japan.
Japanese inheritance tax or gift tax at progressive rates may be payable by an individual, wherever resident, who has acquired
notes from another individual as legatee, heir or donee.
Material U.S. Federal Income Tax Considerations
The following is a description of material U.S. federal income tax consequences of the ownership and disposition of the notes
by the U.S. Holders described below, but it does not purport to be a comprehensive
S-27