SAPPI LIMITED

a bank;
a life insurance company;
a tax-exempt organization;
a person that holds our ordinary shares or ADSs as part of a straddle or a hedging, integrated,
constructive sale or conversion transaction for tax purposes;
United States holder (as defined below) whose functional currency for tax purposes is not the US
dollar;
a person liable for alternative minimum tax; or
a person that owns, or is treated as owning, 10% or more of any class of our ordinary shares or
ADSs.
For purposes of the discussion below, you are a ‘‘United States holder’’ if you are a beneficial owner
of our ordinary shares or ADSs who or which is:
an individual United States citizen or resident alien;
a corporation, or entity taxable as a corporation, that was created under United States law (federal
or state); or
an estate or trust whose worldwide income is subject to United States Federal income tax.
If you are not a United States holder, you are a ‘‘non-United States holder’’ and the discussion below
titled ‘‘United States Federal Income Tax Consequences to non-United States Holders’’ will apply to you.
If a partnership holds our ordinary shares or ADSs, the tax treatment of a partner will generally
depend upon the status of the partner and upon the activities of the partnership. If you are a partner of a
partnership holding our ordinary shares or ADSs, you should consult your tax advisor.
United States Federal Income Tax Consequences to United States Holders
ADSs. In general, for United States Federal income tax purposes, United States Holders of ADSs
will be treated as the beneficial owners of the ordinary shares underlying those ADSs.
Distributions. Subject to the discussion of ‘‘passive foreign investment companies’’ below, the
gross amount of any distribution (other than in liquidation), including the fair market value of all
distributions of ordinary shares whenever a holder may elect to receive cash distributions in lieu of
ordinary share distributions, that you receive with respect to our ordinary shares or ADSs (before
reduction for South African income tax, if any, withheld from such distributions) generally will be included
in your gross income on the day on which you, in the case where you own ordinary shares, or the
Depositary, in the case where you own ADSs, receive the distribution. This distribution will be taxed to
you as a dividend (that is, ordinary income) to the extent such distribution does not exceed our current or
accumulated earnings and profits, as calculated for United States Federal income tax purposes (‘‘E&P’’).
Dividends received by an individual United States holder during taxable years before 2011 should be
considered ‘‘qualified dividend income’’ and will generally be taxed at a maximum rate of 15%, provided
certain holding period requirements and other conditions are satisfied. Dividends received by an
individual United States holder for taxable years after 2010 will be subject to tax at ordinary income rates,
absent legislative action fixing a different rate. To the extent any distribution exceeds our E&P, the
distribution will first be treated as a tax-free return of capital to the extent of your adjusted tax basis in our
ordinary shares or ADSs, as applicable, and will be applied against and reduce such basis
dollar-for-dollar (thereby increasing the amount of gain and decreasing the amount of loss recognized
on a subsequent disposition of such ordinary shares or ADSs). To the extent that such distribution
exceeds your adjusted tax basis, the distribution will be taxed as gain recognized on a sale or exchange
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