J.P. Morgan Thailand DW41

US Tax Disclaimer

US Tax Disclaimer
  • Additional information relating to taxation laws of the Unites States of America

    Material U.S. federal income tax considerations for non-U.S. Holders

    The following summary supplements, and to the extent inconsistent supersedes, the discussion of U.S. federal income taxation in the Annual Report (Form 56-DW) of the DW Issuer under “Payments made by us to certain holders with respect to the derivative warrants may be subject to United States withholding tax under the United States Foreign Account Tax Compliance Act.” This summary is intended to be a general description of the material U.S. federal income tax considerations relating to the Warrants with respect to Non-U.S. Holders (as defined in the Annual Report (Form 56-DW)). It does not purport to be a complete analysis of all tax considerations relating to the Warrants. This summary is based upon the relevant U.S. tax laws as in effect on the date of this terms supplement and is subject to any change in law that may take effect after such date.

    Prospective purchasers of the Warrants should consult their tax advisors as to the consequences, under the tax laws of the country of which they are resident for tax purposes and of the United States, of acquiring, holding and disposing of the Warrants and receiving payments under the Warrants.

    Section 871(m)

    Under section 871(m) of the Code, a “dividend equivalent” payment is treated as a dividend from sources within the United States. Such payments generally would be subject to a 30% U.S. withholding tax if paid to a Non-U.S. Holder. Under U.S. Treasury Department regulations, payments (including deemed payments) with respect to equity-linked instruments (“ELIs”) that are “specified ELIs” may be treated as dividend equivalents if such specified ELIs reference an interest in an “underlying security,” which is generally any interest in an entity taxable as a corporation for U.S. federal income tax purposes, if a payment with respect to such interest could give rise to a U.S. source dividend. However, the U.S. Internal Revenue Service (“IRS”) has issued guidance providing that such dividend equivalent withholding tax generally will not apply to specified ELIs that are not delta-one instruments and that are issued before January 1, 2023. There are specific rules determining when an instrument is treated as issued for this purpose — for example, the Warrants could be treated as reissued for U.S. federal income tax purposes upon the occurrence of certain events affecting the Warrants or the underlying securities (such as a rebalancing of the Index).

    In addition, the dividend equivalent withholding tax generally will not apply to specified ELIs that reference certain “qualified indexes” (as defined under U.S. Treasury Department regulations). A qualified index is generally a passive index that is based on a diverse basket of publicly-traded securities and that are widely-used by numerous market participants.

    Non-U.S. Holders that enter, or have entered, into any transactions in respect of the Warrants or the underlying securities should consult their tax advisors as to the application of the dividend equivalent withholding tax in the context of the Warrants and their other transactions. Payments made with respect to or in connection with the Warrants could be subject to this 30% U.S. withholding tax if they are treated as dividend equivalent payments under the applicable rules.

    Uncertain tax treatment

    The tax treatment of the Warrants is uncertain and alternative characterizations of the Warrants by IRS for U.S. federal income tax purposes are possible. We do not plan to withhold any U.S. tax or request a ruling from the IRS regarding the tax treatment of the Warrants. The IRS or a court may not agree with the tax treatment described in this plan. Should an alternative characterization, including by reason of change or clarification of the law, by regulation or otherwise, cause payments on the Warrants to become subject to withholding tax, we will withhold tax at the applicable statutory rate and we will not pay additional amounts to a holder in respect of any such withholding.

    Also, the U.S. tax treatment of financial instruments that purport to be “prepaid forward contracts” remains unclear. Income in respect of such instruments could be subject to U.S. withholding tax. We will not be required to pay any additional amounts in respect of such withholding. Prospective investors should consult their own tax advisors in this regard.

    Foreign Account Tax Compliance Act

    Please see the discussion under “Payments made by us to certain holders with respect to the derivative warrants may be subject to United States withholding tax under the United States Foreign Account Tax Compliance Act” in the Annual Report (Form 56-DW) of the DW Issuer for a description of the applicability of FATCA withholding rules to payments made on the Warrants.



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