Ryanair 2011 Annual Report Download - page 120

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The Irish Revenue treats a conversion of Ordinary Shares to ADSs made in contemplation of a sale or a
change in beneficial ownership (under Irish law) as an event subject to stamp duty at a rate of 1%. The Irish
Revenue has indicated that a re-conversion of ADSs to Ordinary Shares made in contemplation of a sale or a
change in beneficial ownership (under Irish law) will not be subject to a stamp duty. However, the subsequent
sale of the re-converted Ordinary Shares will give rise to Irish stamp duty at the 1% rate. If the transfer of the
Ordinary Shares is a transfer under which there is no change in the beneficial ownership (under Irish law) of the
Ordinary Shares being transferred, nominal stamp duty only will be payable on the transfer. Under Irish law, it
is not clear whether the mere deposit of Ordinary Shares for ADSs or ADSs for Ordinary Shares would be
deemed to constitute a change in beneficial ownership. Accordingly, it is possible that holders would be subject
to stamp duty at the 1% rate when merely depositing Ordinary Shares for ADSs or ADSs for Ordinary Shares
and, consequently, the Depositary reserves the right in such circumstances to require payment of stamp duty at
the rate of 1% from the holders.
The person accountable for payment of stamp duty is the transferee or, in the case of a transfer by way
of a gift or for a consideration less than the market value, all parties to the transfer. Stamp duty is normally
payable within 30 days after the date of execution of the transfer. Late or inadequate payment of stamp duty will
result in liability for interest, penalties and fines.
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, 2013 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