Ryanair 2010 Annual Report Download - page 125

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United States Tax Considerations
Except as described below under the heading “Non-U.S. Holders,” the following is a summary of
certain U.S. federal income tax considerations relating to the purchase, ownership and disposition of Ordinary
Shares or ADRs by a holder that is a citizen or resident of the United States, a U.S. domestic corporation or
otherwise subject to U.S. federal income tax on a net income basis in respect of the Ordinary Shares or the
ADRs (“U.S. Holders”). This summary does not purport to be a comprehensive description of all of the tax
considerations that may be relevant to a decision to purchase the Ordinary Shares or the ADRs. In particular, the
summary deals only with U.S. Holders that will hold Ordinary Shares or ADRs as capital assets and generally
does not address the tax treatment of U.S. Holders that may be subject to special tax rules such as banks,
insurance companies, dealers in securities or currencies, traders in securities electing to mark to market, persons
that own 10% or more of the stock of the Company, U.S. Holders whose “functional currency” is not U.S.
dollars or persons that hold the Ordinary Shares or the ADRs as part of an integrated investment (including a
“straddle”) consisting of the Ordinary Shares or the ADRs and one or more other positions.
Holders of the Ordinary Shares or the ADRs should consult their own tax advisors as to the U.S. or
other tax consequences of the purchase, ownership, and disposition of the Ordinary Shares or the ADRs in light
of their particular circumstances, including, in particular, the effect of any foreign, state or local tax laws.
For U.S. federal income tax purposes, holders of the ADRs will be treated as the owners of the
Ordinary Shares represented by those ADRs.
Taxation of Dividends. Dividends, if any, paid with respect to the Ordinary Shares, including Ordinary
Shares represented by ADRs, will be included in the gross income of a U.S. Holder when the dividends are
received by the holder or the Depositary. Such dividends will not be eligible for the “dividends received”
deduction allowed to U.S. corporations in respect of dividends from a domestic corporation. Dividends paid in
euro will be includible in the income of a U.S. Holder in a U.S. dollar amount calculated by reference to the
exchange rate in effect on the day they are received by the holder or the Depositary. U.S. Holders generally
should not be required to recognize any foreign currency gain or loss to the extent such dividends paid in euro
are converted into U.S. dollars immediately upon receipt.
Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends
received by an individual prior to January 1, 2011 with respect to the Ordinary Shares or ADRs will be subject
to taxation at a maximum rate of 15% if the dividends are “qualified dividends.” Dividends paid on the Ordinary
Shares or ADRs will be treated as qualified dividends if (i) the issuer is eligible for the benefits of a
comprehensive income tax treaty with the United States that the Internal Revenue Service has approved for the
purposes of the qualified dividend rules and (ii) the Company was not, in the year prior to the year in which the
dividend was paid, and is not, in the year in which the dividend is paid, a passive foreign investment company (a
“PFIC”). The income tax treaty between Ireland and the United States has been approved for the purposes of the
qualified dividend rules. Based on the Company’s audited financial statements and relevant market data, the
Company believes that it was not treated as a PFIC for U.S. federal income tax purposes with respect to its
2008/9 taxable year. In addition, based on the Company’s audited financial statements and its current
expectations regarding the value and nature of its assets, the sources and nature of its income, and relevant
market data, the Company does not anticipate becoming a PFIC for its 2010/11 taxable year.
Under the U.S.-Ireland Income Tax Treaty currently in effect, in the event the Company were to pay
any dividend, the tax credit attaching to the dividend (as used herein the “Tax Credit”; see “—Irish Tax
Considerations”) generally will be treated as a foreign income tax eligible for credit against such U.S. Holder’s
United States federal income tax liability, subject to generally applicable limitations and conditions. Any such
dividend paid by the Company to such U.S. Holder will constitute income from sources outside the United
States for foreign tax credit purposes, and generally will constitute “passive category” income for such purposes.
Foreign tax credits may not be allowed for withholding taxes imposed in respect of certain short-term
or hedged positions in securities.
U.S. Holders should consult their own tax advisors concerning the implications of these rules in light of
their particular circumstances.
Distributions of Ordinary Shares that are made as part of a pro rata distribution to all stockholders
generally will not be subject to U.S. federal income tax.