Vistaprint 2013 Annual Report Download - page 30

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as to our assets and revenues that can only be determined at the end of each tax year. Accordingly, we cannot be
certain that we will not be treated as a PFIC for our current tax year or for any subsequent year.
If a United States shareholder acquires 10% or more of our ordinary shares, it may be subject to increased
United States taxation under the “controlled foreign corporation” rules. Additionally, this may negatively
impact the demand for our ordinary shares.
If a United States shareholder owns 10% or more of our ordinary shares, it may be subject to increased
United States federal income taxation (and possibly state income taxation) under the “controlled foreign
corporation” rules. In general, each U.S. person who owns (or is deemed to own) at least 10% of the voting power
of a non-U.S. corporation, “10% U.S. Shareholder,” and if such non-U.S. corporation is a “controlled foreign
corporation”, or “CFC,” for an uninterrupted period of 30 days or more during a taxable year, then a 10% U.S.
shareholder who owns (or is deemed to own) shares in the CFC on the last day of the CFC's taxable year, must
include in its gross income for United States federal income tax (and possibly state income tax) purposes its pro
rata share of the CFC's “subpart F income”, even if the subpart F income is not distributed. In general, a non-U.S.
corporation is considered a CFC if one or more 10% U.S. Shareholders together own more than 50% of the voting
power or value of the corporation on any day during the taxable year of the corporation. “Subpart F income”
consists of, among other things, certain types of dividends, interest, rents, royalties, gains, and certain types of
income from services and personal property sales.
The rules for determining ownership for purposes of determining 10% U.S. Shareholder and CFC status are
complicated, depend on the particular facts relating to each investor, and are not necessarily the same as the rules
for determining beneficial ownership for SEC reporting purposes. For taxable years in which we are a CFC for an
uninterrupted period of 30 days or more, each of our 10% U.S. Shareholders will be required to include in its gross
income for United States federal income tax purposes its pro rata share of our subpart F income, even if the subpart
F income is not distributed by us. We currently do not believe we are a CFC. However, whether we are treated as a
CFC can be affected by, among other things, facts as to our share ownership that may change. Accordingly, we
cannot be certain that we will not be treated as a CFC for our current tax year or any subsequent tax year.
The risk of being subject to increased taxation as a CFC may deter our current shareholders from acquiring
additional ordinary shares or new shareholders from establishing a position in our ordinary shares. Either of these
scenarios could impact the demand for, and value of, our ordinary shares.
Our tax rate may increase during periods when our profitability declines. Additionally, we will pay taxes
even if we are not profitable on a consolidated basis, which would harm our results of operations.
The intercompany service and related agreements among Vistaprint N.V. and our direct and indirect
subsidiaries ensure that most of the subsidiaries realize profits based on their operating expenses. As a result, if the
Vistaprint group is less profitable, or even not profitable on a consolidated basis, the majority of our subsidiaries will
be profitable and incur income taxes in their respective jurisdictions. In periods of declining operating profitability or
losses on a consolidated basis this structure will increase our effective tax rate or our consolidated losses and
further harm our results of operations.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We own real property associated with three manufacturing facilities we have constructed for the production
of our products, as well as one of our customer support centers. Our 582,000 square foot facility located near
Windsor, Ontario, Canada primarily services our North American market, our 362,000 square foot facility located in
Venlo, the Netherlands primarily services our European market, and our 124,000 square foot facility located in Deer
Park, Australia primarily services our Asia-Pacific markets. In September 2012, we completed construction of a
92,000 square foot building located in Montego Bay, Jamaica. This building is being used for a customer service,
sales and design support center, which replaced the previously leased spaces in Jamaica. Our web servers are
located in a data center space at a LinkBermuda (formerly known as Cable and Wireless) co-location and hosting
facility in Devonshire, Bermuda.
Form 10-K