Most investors can take a credit or a deduction for their share of foreign taxes paid by their mutual funds with significant non-U.S. holdings. Taking a credit usually is more advantageous, but to qualify you must have held your shares in a mutual fund for at least 16 days of the 31-day period starting 15 days before the ex-dividend date of the fund. For additional information, refer to IRS Publication 514. Foreign Tax Credit for Individuals.

Tax Reporting for Foreign Taxes Paid Tables

Foreign Tax Deduction

If you wish to take a deduction instead of a credit:

• For each fund that paid foreign taxes, report the amount from Box 6 of your Form 1099-DIV on Form 1040, Schedule A, Line 8. You do not have to fill out Form 1116, Foreign Tax Credit (Individual, Estate, or Trust).

Foreign Tax Credit

If you wish to take a credit, you may use the simplified or standard method. You may use the simplified method if:

• Your share of creditable foreign taxes from all sources is $300 or less (or $600 or less and you file a joint return with your spouse), and
• All such income is passive. (All ordinary income from T. Rowe Price funds is passive.)

Simplified Method

If you can use the simplified method, report the total foreign taxes paid shown in Box 6 of your Form 1099-DIV plus any other eligible foreign taxes on Form 1040.

Standard Method

If you cannot use the simplified method, you will be required to complete Form 1116 and attach it to your return. Form 1116 computes a limitation on the amount of the foreign tax credit you may deduct based on the total income received from foreign sources (foreign source income) and total foreign taxes paid. Please note that you no longer have to report the income or taxes paid on a country-by-country basis on your federal income tax return.

Your total foreign taxes paid for Form 1116 is provided in Box 6 of your Form 1099-DIV and, together with the total of your taxes paid from other funds or sources, should be included on Form 1116, Part II, Line 8.

Your foreign source income for Form 1116, Part I, Line 1a should be calculated using one of two methods:

Method 1

Multiply the amount in Box 1a of your Form 1099-DIV by the Foreign Source Income Percentage in the tables that follow. You should use this method if:

• Your income (excluding net capital gain and qualified dividend income) is taxed at or below the 28% income tax bracket, and
• Your foreign qualified dividend income and foreign long-term capital gain from all sources is less than $20,000. Your foreign qualified dividend income for your T. Rowe Price fund can be calculated by multiplying the amount in Box 1a of your Form 1099-DIV by the Foreign Source Qualified Dividend Percentage in the tables that follow. Please note that no portion of your T. Rowe Price fund’s distribution is foreign long-term capital gains.

You also should use this method if you determine that you cannot treat any portion of the foreign qualified dividend amount in Box 1b of your Form 1099-DIV as qualified dividends. (This would apply, for example, if you did not meet the holding period requirement to tax your fund dividends at the lower rates.)

Method 2

If you do not qualify to use Method 1, the IRS requires you to adjust the amount of foreign source income used to calculate your foreign tax credit because of foreign qualified dividends.

To calculate an adjusted foreign source income percentage, reduce the Foreign Source Income Percentage in the table below by an amount equal to the Foreign Source Qualified Dividend Percentage below, multiplied by a factor. This factor is (x) the difference between the highest marginal income tax rate and your lower qualified dividend tax rate, divided by (y) the highest marginal income tax rate.

Once you have determined your adjusted foreign source income percentage, compute your foreign source income by multiplying the amount in Box 1a of your Form 1099-DIV by this adjusted percentage. This amount, together with the total of your adjusted foreign source income from other funds or sources, should be included on Form 1116, Part I, Line 1a.

Please consult your tax advisor for details.

Domestic Stock Funds

Ex-Dividend and Reinvestment Date: December 15, 2014