The Commission of the European Union sent the State a formal request to give up the special share the State holds in us (described below). The State has reacted that it has no intention of giving up its special share in our company. The State is, however, considering the possibility of transferring the postal concession from TPG N.V. to Royal TPG Post B.V., our subsidiary for postal services and limiting the applicability of the rights attached to the special share to apply only to that subsidiary. On 17 December 2003 the Commission has announced its intention to bring the matter before the European Court of Justice to compel the State to give up the special rights conferred by the special share, although is has not yet done so.

Special Share

The State holds a special share that gives it the right to approve decisions that lead to fundamental changes in our group structure. The State has committed itself to exercising the rights attached to the special share only to safeguard the general interest in having an efficiently operating postal system in the Netherlands and also to protect its financial interest as a shareholder. The State may not exercise its special share to protect us from unwanted shareholder influence. The State may not transfer or encumber the special share without the approval of our Board of Management and Supervisory Board. Ownership of the special share gives the State the right to approve certain actions, see for these actions note 26 of the consolidated financial statements on page 143.

MEMOR ANDUM AND ARTICLES OF ASSOCIATION

Following is a brief description of certain provisions of our articles of association dated 1 September 2004, pertaining to the rights and restrictions applicable to our ordinary shares. This description does not purport to be complete and is qualified in its entirety by reference to our articles of association, book 2 of the Dutch Civil Code and other Dutch laws. Copies of our articles of association are available on our website and upon request from us. The articles of association are filed with the Securities and Exchange Commission in the United States.

General

Pursuant to the Enabling Act as currently in force, we are subject to the Dutch full “large” company regime. Under these rules, we are required to adopt a two-tier system of corporate governance, comprising a board of management and a supervisory board. Under these rules, subject to statutory exceptions, the supervisory board, rather than the general meeting of shareholders,

• has the right to make a recommendation for the nomination of members of the supervisory board for appointment by the general meeting of shareholders,
• appoints and dismisses members of the board of management,
• adopts the annual accounts, and
• must approve certain resolutions by the board of

management. We have our corporate seat in Amsterdam, the Netherlands. We are registered in the Commercial Register at Amsterdam under number 27168968.

Corporate purpose

Article 4 of our articles of association provides that our business activity shall be, among other things:

the Foundation and we may agree) with the Foundation for the Protection of TPG, subject to the Foundation’s ability to pay the purchase price. The Foundation has recently renewed its credit facility agreements to be able to pay the purchase price. In addition, the Foundation has a call option to acquire a number of preference shares B not exceeding the total issued amount of ordinary shares and the special share, minus one and minus any shares already issued to the Foundation.

The exercise price with respect to each of the options is the nominal value of €0.48 per preference share B, although upon exercise only €0.12 per preference share B is required to be paid. The additional €0.36 per preference share B would not be required to be paid by the Foundation until we made a call for payment by resolution of our Board of Management, which resolution would be subject to the approval of the Supervisory Board.

Beginning two years after the date of issuance of any preference shares B to the Foundation, the Foundation would have the right to demand that we propose to our general meeting of shareholders that those preference shares B be cancelled and the paid up amount returned to the Foundation. This would occur upon approval of the general meeting of shareholders. The Foundation could make this demand earlier if it had received a demand for the repayment of the funds under the credit arrangement it has arranged in order to make payments on the preference shares B.

The independent members of the board of the Foundation are

J. den Hoed RA (chairman), S.C. Kortmann and R. Pieterse. There is one vacancy. With the members of the board of the Foundation, we share the view that the foundation is independent in the sense referred to in Appendix X of the Listing Rules of Euronext Amsterdam.

The preference shares B are our only anti-takeover measure as described in Annex X of the Euronext Listing Rules. In the event of a takeover attempt which by our Board of Management and the Supervisory Board is not considered to be in the interest of the company, the business connected with it and all appropriate interests associated with the company, we may initiate such actions as we may deem appropriate within the boundaries of Dutch law to preserve the long term interests of the company, the business connected with it and all appropriate interests associated with the company.

Issuance of ordinary shares

We may issue ordinary shares and grant rights to subscribe for shares, including options and warrants, pursuant to a resolution of the Board of Management, subject to the approval of the Supervisory Board and the State as holder of the special share. Under our articles of association, up to 719,740,478 ordinary shares remained available for issuance. On 7 April 2004, the annual general meeting of shareholders granted the Board of Management the authority to issue these ordinary shares. This authority will terminate on 7 October 2005. The general meeting of shareholders can, in accordance with our articles of association, extend this authority for a period not exceeding five years or extend this authority by amending our articles of association to that effect. If no such extension is given, the issuance of ordinary shares or rights to subscribe for shares

Dividend rights

Our articles of association provide that within five months after the end of our financial year, the Board of Management must prepare financial statements accompanied by an annual report, which must then be adopted by the general meeting of shareholders. The general meeting of shareholders can extend this period by a maximum of six months on account of special circumstances.

We pay dividends on profits or by exception out of the distributable part of our shareholders’ equity as shown in our financial statements. We may not pay dividends if the payment would reduce shareholders’ equity below the sum of the paid-up capital and any reserves required by Dutch law or our articles of association. Subject to certain exceptions, if a loss is sustained in any year, we may not distribute dividends for that year and we may not pay dividends in subsequent years until the loss has been compensated for out of subsequent years’ profits.

We first have to pay dividends on the special share equal to 7% of its par value each year. If preference shares B have been issued and there are remaining profits available for dividends, we then have to pay dividends on the paid-up portion of the par value of such shares, at a rate of one point above the average 12-monthly EURIBOR (EURO Interbank Offered Rate)— weighted to reflect the number of days for which the payment is made—over the financial year to which the distribution relates.

After payment of dividends on the special share and the preference shares B, the Board of Management may then determine, with the approval of the Supervisory Board, to appropriate part of the remaining profit to reserves. The profit remaining after appropriation to reserves is at the disposal of the annual general meeting of shareholders.

The Board of Management may pass a resolution that has been approved by the Supervisory board and the holder of the special share that any dividend on ordinary shares be paid, at the holder’s option, wholly or partly in our ordinary shares rather than in cash. The State, in its capacity as holder of the special share, has agreed with us that it will give any such approval within a period of two business days after a written request from us. The State will give this approval without prejudice to the option, if such option is made available to holders of ordinary shares, of the State in its capacity as holder of ordinary shares to choose between a dividend paid in cash or in ordinary shares.

Pursuant and subject to the Dutch civil code, the Board of Management may, with the prior approval of the Supervisory Board and subject to Dutch statutory provisions, distribute one or more interim dividends.

Shares we hold in our own capital shall not be the computation of the profit distribution, unless the Board of Management resolves otherwise, which resolution is subject to the approval of the Supervisory Board.

Our policy on additions to reserves and on dividends (the level and purpose of the addition to reserves, the amount of the dividend and the type of dividend) at the time of determination and in the event of any change and the resolution to determine

Discriminating provisions

There are no discriminating provisions against any of our shareholders as a result of owning a number of substantial shares.

Pre-emptive rights

Except for issuances of ordinary shares for non-cash consideration and issuances to our employees, holders of ordinary shares have pro rata pre-emptive rights to subscribe for new issuances of ordinary shares in proportion to their shareholdings. These rights may be restricted or excluded by a resolution of the Board of Management, subject to the approval of the Supervisory Board and the holder of the special share. The State, in its capacity as holder of ordinary shares and the special share, has agreed with us that it will vote in favour of any proposal submitted annually to the annual general meeting of shareholders by the Board of Management to extend the authority of the Board of Management to restrict or exclude the pre-emptive rights of holders of ordinary shares. Holders of ADSs may not be able to exercise pre-emptive rights granted to holders of ordinary shares.

Reduction of capital

Upon a proposal of the Board of Management, which proposal must be approved by the Supervisory Board, the general meeting of shareholders may reduce outstanding share capital by cancelling shares or by reducing the nominal value of shares subject to the provisions of the articles of association.

The Board of Management has submitted a proposal to our annual general meeting expected to take place on 7 April 2005 to cancel the 20.7 million shares purchased from the State of the Netherlands as announced on 28 September 2004. See further chapter 12.

Release from liabilities (Kwijting)

At each annual general meeting of shareholders, our shareholders are, after the approval of the annual accounts, requested to adopt a separate resolution releasing the members of the Board of Management and the members of the Supervisory Board from actual or potential liabilities in connection with the execution of their duties during the financial year. The release from liability obtained by the Board of Management and the Supervisory Board is limited to the facts reflected in the financial statements or otherwise disclosed to the general meeting of shareholders prior to the approval of the financial statements. However, the scope of a release from liability is subject to limitations by virtue of the law.

AMENDMENTS OF THE ARTICLES OF ASSOCIATION, LEGAL MERGER AND DISSOLUTION

A resolution of the general meeting of shareholders to amend the articles of association (including with respect to changing the rights of holders of our ordinary shares), to merge or demerge within the meaning of Part 7, Book 2 of the Dutch civil code or to dissolve us may only be adopted on a motion of our Board of Management that is approved by our Supervisory Board. Proposals to amend the provisions of the articles of association described on page 170 -“Ownership interests of the State of the Netherlands” need the prior approval of the holder of the special share.

• Appointment, suspension and dismissal of members of the Supervisory Board

Under the new provisions of the large company regime, the members of the Supervisory Board are appointed by the annual shareholders meeting following nomination by the Supervisory Board. Both the annual shareholders meeting and the central works council may make recommendations and must be informed about this right as well as of the profile of vacancies. Nominations by the Supervisory Board must be reasoned against the Supervisory Board profile. The Supervisory Board profile which will be made available and must be discussed with the annual shareholders meeting and the central works council at the time of determination and in the event of any change.

The central works council has a special right of recommendation for one-third of the total number of Supervisory Board members. The only circumstances in which the Supervisory Board may decide not to put a person on the nomination as recommended by the central works council are if the nominee is considered unsuitable to fulfil the function of a Supervisory Board member or if, upon acceptance, the Supervisory Board would not be composed properly. The Enterprise Chamber is the competent court to decide on disputes between the central works council and the Supervisory Board in this respect.

The annual shareholders meeting may reject a nomination by the Supervisory Board with a majority of votes representing one third of the outstanding capital. If the quorum is not met, a new meeting should be convened, in which case the quorum requirement is not applicable. Under the new law the annual shareholders meeting can dismiss the Supervisory Board with a majority of votes representing one third of the outstanding share capital.

The transitional arrangement of the new law obligates the Supervisory Board to grant the special right of recommendation to the central works council on every second vacancy until one third of the Supervisory Board members has been appointed accordingly.

• Adoption of the financial statements.

The difference between the adoption and approval of the financial statements no longer exists. The financial statements shall be adopted by the general meeting and no longer by the Supervisory Board. This shall be included in article 34 paragraph 4 and article 38 paragraph 2 (b).

Restriction on non-Dutch shareholders’ rights

Under our articles of association there are no limitations on the rights on Dutch, non-resident or foreign shareholders to hold or exercise voting rights in respect of our securities, and we are not aware of any such restrictions under Dutch corporate law.

Material contracts

On 23 June 1998, we entered into an agreement with the State of the Netherlands. The terms of this agreement were modified, subject to the approval of the Dutch Parliament, by a letter agreement dated 9 March 2001, between us and the State of the Netherlands. For a description of certain terms of this agreement (and certain proposed changes to this agreement), see page 170

– “The ownership interests of the State of the Netherlands”.

SIGNIFICANT SUBSIDIARIES

TPG N.V. is the parent company of the group. The following table sets forth, as of 22 February 2005, the name and jurisdiction of incorporation of our significant subsidiaries.

The name and jurisdiction of incorporation of our significant subsidiaries

Company	Country	Equity Interest
Royal TPG Post B.V.	Netherlands	100%
TNT Express Holdings B.V.	Netherlands	100%
TNT Logistics Holdings B.V.	Netherlands	100%
TNT Holdings B.V.	Netherlands	100%
TNT Holdings Deutschland GmbH	Germany	100%

The full list containing the information referred to in Article 379 and article 414, Part 9, Book 2 of the Dutch civil code is filed at the office of the Chamber of Commerce in Amsterdam.

PROPERTY, PLANTS & EQUIPMENT

We use approximately 1,933 buildings.

OTHER REGIONS
Except for our employees in Australia and those of our logistics division in the US, our employees outside Europe are generally neither represented by trade unions nor employed pursuant to collective labour agreements. Trade unions represent less than 50% of our employees in Australia and fewer than 50% within our US logistics operations. Labour relations have been good and we have not, apart from certain labour disputes and some small (1/2 – 1 day) work stoppings in 2004 in Australia, experienced any material work stoppages in recent years.

LEGAL PROCEEDINGS

For an overview of the legal proceedings, see chapter 12, page 122.

Taxation

GENERAL

The following is a summary of the material Dutch tax consequences of the ownership of ordinary shares or ADSs, in particular by US Shareholders (as defined below). The summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase ordinary shares or ADSs, and prospective investors should consult their professional advisors as to the tax consequences of their purchase, ownership and disposition of the ordinary shares and ADSs, including the consequences under applicable federal, state, local and foreign law. In particular, the summary does not address US shareholders that do not hold the shares or ADSs as capital assets and the tax treatment of holders subject to special tax rules, such as banks, insurance companies and dealers in securities, investors liable for alternative minimum tax or investors who hold ordinary shares or ADSs as part of a straddle or a hedging or conversion transaction, some of which may be subject to special rules. This summary should not be read as extending by implication to matters not specifically discussed herein. Additional rules may apply to holders who themselves or through affiliates actually or constructively own 10% or more of the voting power or value of the ordinary shares or ADSs as determined by US Federal income tax law. The Dutch rules applying to holders of a “substantial interest” in broad terms, individuals who hold or have held directly or indirectly, either independently or jointly with certain close relatives, at least 5% of the nominal paid-up capital of any class of shares in the company are not addressed in this summary. With respect

Dutch tax on dividends

Dividends (or similar income derived from shares qualifying as such under the Dutch Dividend Tax Act 1965 (Wet op de dividendbelasting 1965), hereinafter referred to as “income”) distributed by the company are in principle subject to tax at the current rate of 25%, which should be withheld and remitted by the company to the Dutch tax authorities. Stock dividends paid out of the company’s share premium account, recognised as such for Dutch tax purposes, are not subject to dividend tax. The company has a share premium account, recognised as such for Dutch tax purposes, from which stock dividends could be paid.

2004 SITUATION
As regards US Holders the following will apply. A US holder can only claim the benefits of the tax treaty for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed on 18 December 1992 between the Dutch State and the United States of America, as modified by the protocol of 8 March 2004 (together, the “1992 Treaty”), if:

• the person is a resident of the United States as defined therein;
• the person’s entitlement to these benefits is not limited by the limitations on benefits provisions of article 26 of the 1992 Treaty, and
• the person can be considered to be the beneficial owner of the dividend under the Netherlands’ anti-dividend stripping rules.

Under the 1992 Treaty, dividends paid by the company to a resident of the United States, other than an exempt organisation or exempt pension trust, as described below, are generally eligible for a reduction of the 25% Dutch withholding tax to 15%, provided that the holder does not carry on an enterprise in the Netherlands through a permanent establishment, permanent representative or fixed base to which or to whom the ordinary shares or ADSs are attributable. If and to the extent the ordinary shares or ADSs are attributable to this permanent establishment or representative, Dutch withholding tax will, depending on the particulars of the case, amount to 25% or 0%. The 1992 Treaty provides for a complete exemption for dividends received by exempt pension trusts and exempt organisations, as defined in the 1992 Treaty. Except in the case of exempt organisations, this reduced dividend withholding rate can be applied for at source upon payment of the dividend; exempt organisations remain subject to the statutory withholding tax rate of 25% and are required to file for a refund of this withholding.

A US holder other than an exempt organisation, generally may claim the benefits of a reduced withholding tax rate pursuant to the 1992 Treaty by submitting a Form IB 92 USA, which includes a banker’s affidavit stating that the ordinary shares or ADSs are in the bank’s custody in the name of the applicant, or that the ordinary shares or ADSs have been exhibited to the bank as being the property of the applicant. If the Form IB 92 USA is submitted prior to the dividend payment date, the reduced withholding tax rate can be applied to the dividend. A US holder unable to claim withholding tax relief in this manner can obtain a refund of excess tax withheld by filing a Form IB 92 USA and describing the circumstances that prevented a claim for withholding tax relief at source.

derived from the ordinary shares or ADSs at the progressive rates of Box I, the maximum rate being 52%.

BOX II (SUBSTANTIAL INTEREST)
Income (dividends and capital gains) from substantial interests (broadly, shareholdings of at least 5%) is taxed in Box II. The tax rate amounts to 25%. Losses from a substantial interest may only be offset against income or gains from a substantial interest and not against income from Box I (work and private residence) or Box III (savings and investments).There is a possibility for a credit for losses not compensated against the income tax liability of Box II. Such tax credit is limited to 25% of the amount of the loss, and can only be claimed on condition that the holder of the substantial interest has sold all of that interest and holds no such interest in another entity. Interest related to the financing of a substantial interest is only deductible against the 25% rate. Interest on debts due from the company as well as income and gains from other assets which are made available to the company are not taxable in Box II, but in Box I. Stock dividends received/ derived will not be considered to form taxable income in Box II at the moment of receipt. The purchase price of such stock dividend will in principle amount to zero.

BOX III (SAVINGS AND INVESTMENTS)
Income derived from capital (savings and investments) is taxed according to the regime of Box III. Taxable income is determined annually on the basis of a fictitious—i.e. deemed—return on capital. This deemed return has been fixed at 4% of average net capital, assets less liabilities at market value, on 1 January and 31 December of any year. In this respect, assets and liabilities relating to income from Box I and Box II are not taken into account. The taxable income is computed without regard to the actual income and capital gains received. Thus, if actual income exceeds 4%, tax will still only be levied on the basis of 4%. On the other hand, there is no reduction in tax if the actual income is less than 4%. The deemed income is taxed at 30%.

In principle, under the provisions of the Personal Income Tax Act 2001 the Dutch dividend tax can be credited, or refunded, for Netherlands residents or for a Dutch permanent establishment or permanent representative to which or to whom the underlying shares are attributable. This credit is also available against tax under Box III. However, in case of dividend stripping transactions, the dividend withholding tax cannot be credited or refunded if the recipient cannot be considered to be the beneficial owner of the dividend. See the discussion on Dutch dividend withholding tax above.

Non-resident individuals of the Netherlands

EU residents and residents of specified countries with which the Netherlands has concluded a tax treaty providing for the exchange of information may elect to be taxed according to the rules applicable to resident taxpayers. They are then taxed as if they were a resident of the Netherlands. This means that they will be taxable in respect of their worldwide income. In that case they will be able to claim relief from double taxation in respect of certain non-Dutch source income.

Income from savings and investments will be computed in the same way as for taxpayers resident in the Netherlands, on a fictitious basis.

against the Dutch corporate income tax due on this income, provided the recipient is the beneficial owner of the dividend.

The State has concluded tax treaties with Canada, the United States, Switzerland, Japan, all EU member states, Norway and a number of other countries. Most tax treaties concluded by the State provide for a reduced dividend withholding tax rate of 15% for portfolio investment.

If the shares are not attributable to a Netherlands permanent establishment or a permanent representative, dividends paid to non-resident entities which are shareholders of the company are in principle not subject to Dutch tax (other than the dividend tax mentioned above), unless the non-resident shareholder holds a substantial interest in the company and the substantial interest does not form part of the business assets of an enterprise of the shareholder. The right of the Netherlands to tax the dividends may be restricted under specific provisions of applicable tax treaties.

Personal income tax and corporate income tax on capital gains

RESIDENTS OF THE NETHERL ANDS
In principle, capital gains derived from the sale of the ordinary shares or ADSs by an individual shareholder who resides, or is deemed to reside, in the Netherlands are not subject to Dutch personal income tax provided the ordinary shares or ADSs do not form part of a substantial interest or cannot be attributed to the enterprise of that individual. Capital gains realised on the disposal of ordinary shares or ADSs that form part of a substantial interest of an individual are subject to tax in Box II at the special 25% rate. If the ordinary shares or ADSs form part of the business assets of an enterprise carried on, in whole or in part, for the account of an individual, the capital gain is subject to personal income tax at the ordinary progressive rates of Box I, currently up to 52%.

If the ordinary shares or ADSs are held by a Dutch resident entity, any capital gains derived from the sale of the ordinary shares or ADSs are subject to corporate income tax at 34.5% (31.5% as of 1 January 2005), unless the shareholding in the company qualifies for the participation exemption of Article 13 of the Corporate Income Tax Act 1969.

NON-RESIDENTS OF THE NETHERL ANDS
Capital gains realised by non-resident individuals who, or nonresident entities which, are shareholders of the company are in principle not subject to Dutch personal income tax or Dutch corporate income tax, provided these shareholders:

• do not hold a substantial interest in the company, or
• do not conduct a business, trade or other taxable activities, in whole or in part, through a permanent establishment or permanent representative in the Netherlands to which or to whom the ordinary shares or ADSs are attributable.

If the ordinary shares or ADSs form part of a substantial interest, the capital gain on the disposal of the ordinary shares or ADSs is, in principle, subject to tax at a rate of 25% for individuals or 34.5% (31.5% as of 1 January 2005) for entities, unless the substantial interest forms part of the business assets of an enterprise of the shareholder.

States or any state thereof or the District of Columbia, or an estate or trust which is resident in the United States for United States Federal income tax purposes, in each case who

• is not also resident of, or ordinarily resident in the Netherlands for Dutch tax purposes,
• is not engaged in a trade or business in the Netherlands through a permanent establishment, and
• does not own, directly, indirectly or by attribution, 10% or more of the Shares of TPG (by vote or value).

This summary is of a general nature only and does not discuss all aspects of the United States and Dutch taxation that may be relevant to a particular investor. The summary deals only with ADSs held by US holders as capital assets and does not address special classes of purchasers, such as dealers in securities, a trader in securities that elects to use a mark-to-market method of accounting for its securities holdings, a person that holds ordinary shares or ADSs as part of a straddle or a hedging or conversion transaction or as part of a “synthetic security” or other integrated transaction for US federal income tax purposes, US holders whose functional currency is not the United States dollar and certain US holders (including, but not limited to, insurance companies, tax-exempt organisations, financial institutions and persons subject to the alternative minimum tax) who may be subject to special rules. If a partnership holds shares or ADSs, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership.

Owners of ADSs are urged to consult their tax advisors with respect to the tax consequences to them of the ownership and disposition of such shares in light of their particular circumstances, including the tax consequences under state, local, foreign and other tax laws, and the possible effects of changes in United States Federal or other tax laws.

In addition, this summary is based, in part, upon representations made by the depositary to us and assumes that the Deposit Agreement, and all other related agreements, will be performed in accordance with its terms. The United States Treasury Department has expressed concern that depositaries for ADSs, or other intermediaries between the holders of shares of an issuer and the issuer, may be taking actions that are inconsistent with the claiming of United States foreign tax credits by United States Holders of such receipts or shares. Accordingly, the analysis regarding the availability of a United States foreign tax credit for Dutch taxes and sourcing rules described below could be affected by ongoing and future actions that may be taken by the United States Treasury Department and/or the Internal Revenue Service.

For purposes of tax treaties and the US Internal Revenue Code of 1986, US holders that own ADSs will be treated as owning ordinary shares.

Under the 1992 Treaty, the company will generally not be subject to United States Federal income tax unless it engages in a trade or business in the United States through a permanent establishment. The company currently operates in the United States through various US subsidiaries. The company intends to conduct its business activities in a manner that will not result

Dividends paid will generally be subject to a withholding tax of 25% and will generally be eligible for a foreign tax credit. This amount may be reduced under the 1992 Treaty and is referred to above under “Dutch Taxation — Dutch tax on Dividends”.

If the US holder is a United States partnership, trust or estate, the foreign tax credit will be available only to the extent that the income derived by such partnership, trust or estate is subject to US tax either as the income of a US resident in its hands or in the hands of its partners or beneficiaries, as the case may be. The withholding tax may, subject to certain limitations, be offset against United States Federal taxes on foreign source income by filing Form 1116 (or Form 1118 for corporations) “Foreign Tax Credit” with the Federal income tax return. Form 1116 can be obtained by calling 1-800-TAX FORM. This tax credit will normally reduce the United States tax liability on the dividend. A US holder of ADSs or ordinary shares nonetheless will not be entitled to claim the tax credit for withholding taxes if the holding of ADSs or ordinary shares:

• is effectively connected with a permanent establishment situated in the Netherlands through which the holder carries on business in the Netherlands, or
• is effectively connected with a fixed base in the Netherlands from which the holder performs independent personal services.

Further, special rules apply if the holder:

• owns at least 10% of the ordinary shares of the company (or, in the case of a holder that is a United States corporation, controls, alone or with one or more associated corporations, at least 10% of the voting stock of the company), or
• is exempt from tax in the United States on dividends paid by the company.

A US holder may elect annually either to deduct the Dutch withholding tax (see “Dutch Taxation”) from its income or take the withholding taxes as a credit against its US Federal income tax liability, subject to US foreign tax credit limitation rules.

If and to the extent that we pay a dividend on the common shares or ADSs out of dividend income from our non-Dutch subsidiaries and are therefore entitled to a credit for Dutch tax purposes for foreign taxes attributable to such dividend income from non-Dutch subsidiaries, there is a risk that the United States Internal Revenue Service might take the position that our allowable credit for Dutch tax purposes constitutes a partial subsidy of our withholding tax obligation and that, therefore, a United States Holder would not be entitled to a foreign tax credit with respect to the amount so allowed. However, this Dutch tax credit is available only to us and does not reduce the amount of withholding tax applied against the dividends paid by us. We believe that such a position would not be correct because such Dutch credit is based primarily on the net dividend received and the United States Holder does not receive any benefit from such Dutch tax credit available to us.

withholding requirements. Holders who fail to furnish certain identifying information under the United States information reporting rules will be subject to backup withholding. Amounts withheld from payments will be allowed as a credit against such US holder’s United States Federal income tax liability.

Backup withholding is not an additional tax and may be claimed as a credit against the US Federal income tax liability of a US holder or refunded, provided that the required information is furnished to the US Internal Revenue Service. The backup withholding is currently 28% but this rate is subject to change.

Persons required to establish their exempt status generally must provide such certification on IRS Form W-9 (Request for Taxpayer Identification Number and Certification) in the case of US persons and on IRS Form W-8 (Certificate of Foreign Status) in the case of non-US persons. Holders of ordinary shares should consult their tax advisors regarding the application of the information reporting and backup withholding rules, including the finalised Treasury regulations.

United States gift and estate tax

An individual US holder will be subject to United States gift and estate taxes with respect to the ADSs in the same manner and to the same extent as with respect to other types of personal property.