Receipt of a Notice of Tax Assessment based on Transfer Pricing Adjustments

Today, Kyocera Corporation (the "Company") received a notice of tax assessment based on transfer pricing adjustments from the Osaka Regional Tax Bureau stating that, in the Bureau's judgment, allocation of profit earned from transfers of products between the Company and its overseas subsidiaries was less than appropriate for the five years from fiscal year March 1999 through fiscal year March 2003. The notice indicates that income should be adjusted upwards to 24.3 billion yen and that the resultant additional tax, including local taxes, etc., will amount to approximately 13 billion yen. The Company disagrees with this assessment and will file an appeal to the tax tribunal.

The Bureau states that the taxes paid by the Company and its overseas subsidiaries during the relevant period should be adjusted because they were based on improper allocation of profits among countries, and that the Company should pay additional tax to the Japanese tax authorities.

The Company to date, based on its status as a parent of companies located worldwide, has filed appropriate tax returns in various related countries pursuant to consistent pricing policies for transfers between the Company and its overseas subsidiaries that have been implemented to ensure that its overseas subsidiaries can earn appropriate profit. The Company also believes that its tax returns filed in Japan have consistently been prepared in an appropriate manner.

It is regrettable in any case that the Company has received such a notice. The Company will endeavor to obtain agreement from the tax authority to the Company's view through discussion on a different stage.