The following description of taxation issues related to owning shares in Hydro does not constitute an exhaustive description of all tax regulations that may be applicable when owning shares in Hydro.

Norwegian shareholders

As of 2006 a new model for taxation of dividends and capital gains has been introduced in Norway for private individuals. All dividends and realized capital gains during a year that exceed a certain risk-free rate will be subject to 29.76 percent income tax in 2017 and 30.59 percent income tax in 2018. The risk-free rate or shielding rate is set each year by the Norwegian tax authorities. For all Hydro shares acquired before 1 January 2006 the cost basis or shield basis will we set equal to the acquisition price plus the accumulated risk adjustments since the acquisition.

US shareholders

For US federal income tax purposes, the gross amount of any distributions, including the amount of any withholding tax thereon, paid to a US holder by Hydro will be taxable as dividend income to the US holder, based on the US dollar value of the distribution calculated by reference to the spot rate in effect on the date the distribution is actually or constructively received by the US holder, in the case of ordinary shares, or by the Depositary, in the case of American Depositary Shares (ADSs). Dividends paid by Hydro will not be eligible for the dividends received deduction generally allowed to US corporations in respect of dividends received from other US corporations.

Taxation on sale, exchange, or other disposition upon a sale, exchange, or other disposition of ordinary shares or (ADSs), a US holder will generally recognize capital gain or loss for US federal income tax purposes in an amount equal to the difference between the US dollar value of the amount realized on the disposition and the US holder’s adjusted tax basis, determined in US dollars, in the ordinary shares or ADSs. Such gain or loss generally will be US source gain or loss, and generally will be treated as a long-term capital gain or loss if the US holder’s holding period in the ordinary shares or ADSs exceeds one year at the time of disposition. The deductibility of capital losses is subject to significant limitations. If the US holder is an individual, any capital gain generally will be subject to US federal income tax at preferential rates if specified minimum holding periods are met.

Other

A non-Norwegian shareholder is generally subject to a withholding tax at a rate of 25 percent on dividends distributed by Norwegian companies, unless the non-Norwegian shareholder is a limited liability company or a similar entity resident within the European Economic Area, or the non- Norwegian shareholder is carrying on business activities in Norway and such shares are effectively connected with such activities. The withholding tax of 25 percent may be lower pursuant to tax treaties between Norway and the country in which the shareholder is resident. The Treaty rate is generally 15 percent. The Treaty withholding tax rate will generally apply to dividends paid on shares held directly by U.S. holders that are residents of the United States within the meaning of the Treaty.

With effect from 1st of January 2019, the rules have been tightened and all foreign shareholders must document their identity and tax status in order to receive a reduced (or zero) withholding tax. This is done by filing an application to the Central Office for Foreign Tax Affairs for getting a permission to resume or start using a reduced withholding tax rate. Please contact Norsk Hydro’s account operator at gry.veiby@dnb.no for assistance.