Form 20-F 2005

You should consult your tax advisor in this regard. Any election to amortize bond premium will apply to Notes held by you at the
beginning of the first taxable year to which the election applies or thereafter acquired and is irrevocable without the consent of the
IRS. If you elect to amortize bond premium, you must reduce your tax basis in the Notes by the amount of the premium amortized.
If you do not make the election to amortize the bond premium, the bond premium generally will decrease the gain or increase the
loss otherwise recognized upon a taxable disposition of the Note.
In the case of Euro Notes, the amount of amortizable bond premium that will reduce your interest income is determined each year
in euro. At the time amortizable bond premium offsets your interest income, foreign currency gain or loss (which will be taxable
as ordinary income or loss) will be realized with respect to amortizable bond premium on the Euro Note based on the difference
between the spot rate of exchange on the date or dates the premium is recovered through interest payments on the Euro Note and
the spot rate of exchange on the date you acquired such Euro Note.
If you purchased your Notes after their original issuance with market discount, acquisition premium or bond premium, you should
consult your tax advisor regarding the tax consequences of owning and disposing of the Notes, including the availability of certain
elections.
Sale and Disposition of the Notes
Your adjusted tax basis in a Note generally will equal the U.S. dollar cost of the Note, increased by any market discount or in the
case of 2004 Discount Notes, any OID previously included in gross income and reduced by any principal payments received and
any amortizable bond premium deducted. The cost of a Euro Note generally will be the U.S. dollar value of the euro purchase
price on the date of purchase, calculated at the exchange rate in effect on that date. If the Euro Note is considered traded on an
established securities market for U.S. federal income tax purposes, a cash basis taxpayer (and if it elects, an accrual basis taxpayer)
will determine the U.S. dollar value of the cost of the Euro Note at the spot rate on the settlement date of the purchase.
Except as discussed above with respect to market discount and below with respect to foreign currency gains or losses, gain or
loss recognized upon the sale, exchange or other disposition of a Note generally will be U.S. source capital gain or loss, and will
be long-term capital gain or loss if you have held the Note for more than one year at the time of the sale or other disposition. The
deductibility of capital losses is subject to significant limitations. If you are an individual, any capital gain generally will be subject
to U.S. federal income tax at preferential rates if specified minimum holding periods are met.
Upon the sale, or other taxable disposition of a Note, you generally will recognize gain or loss in an amount equal to the difference
between the amount realized (other than amounts attributable to accrued and unpaid interest, which will be taxable as ordinary
interest income in accordance with your method of tax accounting as described above) and your adjusted tax basis in the Note. To
the extent of any market discount that has accrued on the Note but not been previously included in your gross income, any gain
will be treated as ordinary income. If you receive non-U.S. currency (including euro) on the disposition of a Euro Note, the amount
realized generally will equal the U.S. dollar value of the non-U.S. currency received, determined on the date of disposition, in the case
of an accrual basis U.S. holder, or the date payment is received, in the case of a cash basis U.S. holder. If a Euro Note is considered
traded on an established securities market for U.S. federal income tax purposes, a cash basis taxpayer (and if it elects, an accrual
basis taxpayer) will determine the U.S. dollar equivalent of the amount realized by translating that amount at the spot rate on the
settlement date of the sale, exchange or other disposition. If an accrual method taxpayer makes such an election, the election must
be applied consistently to all debt instruments from year to year and cannot be changed without the consent of the IRS.
Gain or loss recognized upon the sale, exchange or other disposition of a Euro Note will constitute foreign currency gain or loss
to the extent described below. This foreign currency gain or loss will be taxable as U.S. source ordinary income or loss, but
generally will not be treated as interest income or expense. Upon the sale, exchange or other disposition of a Euro Note, you
generally will recognize foreign currency gain or loss on the principal amount of the Euro Note equal to the difference between
(i) the U.S. dollar value of the purchase price determined at the spot rate on the date payment is received or the Note is disposed
of, and (ii) the U.S. dollar value of the purchase price for the Euro Note determined at the spot rate on the date the U.S. holder
Form 20 - F 2005 - Rhodia
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