Form 20-F 2005

Interest
Interest on 2003 Notes
The gross amount of interest paid on a 2003 Note will be includible in your gross income as ordinary interest income at the time
the interest is received or accrued, depending on your method of accounting for U.S. tax purposes. A U.S. holder of 2003 Euro
Notes that uses the cash method of accounting for tax purposes will realize interest income equal to the U.S. dollar value of the
interest payment, based on the spot exchange rate on the date of receipt, regardless of whether the payment is in fact converted
into U.S. dollars.
A U.S. holder of 2003 Euro Notes that uses the accrual method of accounting for tax purposes, or who otherwise is required to
accrue interest prior to receipt, will be required to accrue interest income on the 2003 Euro Notes in euros and translate that amount
into U.S. dollars at the average spot exchange rate in effect during the interest accrual period (or, with respect to an accrual period
that spans two taxable years, at the average rate for the partial period within the U.S. holder’s taxable year). Alternatively, an accrual
basis holder may make an election (which must be applied consistently to all debt instruments from year to year and cannot be
changed without the consent of the IRS) to translate accrued interest income at the spot rate of exchange on the last day of the
accrual period (or the last day of the taxable year in the case of a partial accrual period) or at the spot rate on the date of receipt, if
that date is within five business days of the last day of the accrual period. A U.S. holder of 2003 Euro Notes that uses the accrual
method of accounting for tax purposes will recognize foreign currency gain or loss if the exchange rate in effect on the date the
payment is received differs from the rate applicable to a previous accrual of that interest. This foreign currency gain or loss will be
treated as ordinary income or loss, and generally will not be treated as an adjustment to interest income or expense.
The interest income you receive will be income from sources outside the United States, and with certain exceptions, will be treated
separately, together with other items of “passive” income or, in certain cases, “financial services” income, for purposes of computing
any foreign tax credit allowable under U.S. federal income tax laws. Under recently enacted legislation, for taxable years beginning
after December 31, 2006, interest income generally will constitute “passive category” income or in the case of certain U.S. holders,
“general category” income.
Interest on 2004 Discount Notes
The 2004 Discount Notes will be considered to have been issued with original issue discount (“OID”) as such term is defined in the
Code and specified Treasury Regulations issued thereunder. For U.S. federal income tax purposes, OID with respect to the Notes
is the excess of the stated redemption price at maturity of a 2004 Discount Note over the issue price. The issue price of a 2004
Discount Note is the first price to the public (not including bond houses, brokers or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers) at which a substantial amount of the 2004 Discount Notes was sold for
money. The stated redemption price at maturity of a 2004 Discount Note is the sum of all payments provided by the terms of the
2004 Discount Note other than qualified stated interest payments. The term qualified stated interest generally means stated interest
that is unconditionally payable in cash or property (other than our debt instruments) at least annually at a single fixed rate.
Payments of qualified stated interest on a Note will be includible in the gross income of a U.S. holder as ordinary interest income at
the time the interest is received or accrued, depending on the U.S. holder’s method of accounting for U.S. tax purposes.
A U.S. holder of 2004 Euro Discount Notes that uses the cash method of accounting for tax purposes will realize interest income
from qualified stated interest payments equal to the U.S. dollar value of the interest payment, based on the spot exchange rate on
the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars. A U.S. holder of 2004 Euro Discount
Notes that uses the accrual method of accounting for tax purposes, or who otherwise is required to accrue interest prior to receipt,
will accrue interest income on the 2004 Euro Discount Notes in euro and translate that amount into U.S. dollars at the average
spot exchange rate in effect during the interest accrual period (or, with respect to an accrual period that spans two taxable years,
at the average rate for the partial period within the U.S. holder’s taxable year). Alternatively, an accrual basis holder may make an
election (which must be applied consistently to all debt instruments from year to year and cannot be changed without the consent
of the IRS) to translate accrued interest income at the spot rate of exchange on the last day of the accrual period (or the last day of
112 Form 20 - F 2005 - Rhodia