Incredimail 2014 Annual Report Download - page 82

Download and view the complete annual report

Please find page 82 of the 2014 Incredimail annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 166

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166

The term "Non-U.S. Holder" means a beneficial owner of an ordinary share who is not a U.S. Holder. The tax consequences to a Non-
U.S. Holder may differ substantially from the tax consequences to a U.S. Holder. Certain limited aspects of U.S. federal income tax
considerations relevant to Non-U.S. Holders of an ordinary share are also discussed below.
This discussion is based on provisions of the Code, current and proposed U.S. Treasury Regulations and administrative and judicial
interpretations, each in effect as of the date hereof, all of which are subject to change, possibly on a retroactive basis. This description does not
discuss all aspects of U.S. federal income taxation that may be applicable to investors in light of their particular circumstances or to investors
who are subject to special treatment under U.S. federal income tax laws, including:
Additionally, the tax treatment of persons who are, or hold our ordinary shares through, a partnership or other pass-
through entity is not
discussed, and such persons should consult their advisor as to their tax consequences. The possible application of the alternative minimum tax,
U.S. federal estate or gift taxes and any aspect of state, local or non-U.S. tax laws are also not considered in this discussion.
We urge you to consult with your own tax advisor regarding the tax consequences of investing in the ordinary shares, including the
effects of U.S. federal, state, local, and foreign or other tax laws.
Distributions Paid on the Ordinary Shares
Subject to the discussion below under "Passive Foreign Investment Company Considerations," a U.S. Holder generally will be required
to include in gross income as ordinary dividend income the amount of any distributions paid by us on the ordinary shares, including the amount
of any non-
U.S. income taxes withheld, to the extent that those distributions are paid out of our current or accumulated earnings and profits as
determined for U.S. federal income tax purposes. Distributions in excess of our earnings and profits will be treated first as a non-
taxable return
of capital and will reduce the U.S. Holder’
s tax basis in its ordinary shares to the extent thereof and, to the extent distributions exceed such tax
basis, then will be treated as gain from a sale or exchange of those ordinary shares. Our dividends generally will not qualify for the dividends-
received deduction applicable, in some cases, to U.S. corporations. Dividends paid in ILS, including the amount of any non-
U.S. income taxes
withheld, 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
date they are included in income by the U.S. Holder, regardless of whether the payment in fact is converted into U.S. dollars. A U.S. holder that
receives dividends paid in ILS (or any other foreign currency) and converts the ILS (or other foreign currency) into dollars after the date such
dividends are included in income may have foreign exchange gain or loss based on any appreciation or depreciation in the value of the ILS (or
other foreign currency) against the dollar, which will generally be U.S. source ordinary income or loss.
A non-corporate U.S. holder’
s "qualified dividend income" may be taxed at reduced rates (currently, a maximum rate of 20% applies).
For this purpose, subject to the limitations discussed below, "qualified dividend income" generally includes dividends paid by a non-
U.S.
corporation if either:
•
insurance companies;
•
dealers in stocks, securities or currencies;
•
financial institutions and financial services entities;
•
regulated investment companies or real estate investment trusts;
•
grantor trusts;
•
S corporations;
•
persons that acquire ordinary shares upon the exercise of employee stock options or otherwise as compensation;
•
tax-exempt organizations;
•
persons that hold ordinary shares as a position in a straddle or as part of a hedging, conversion or other integrated instrument;
•
individual retirement and other tax-deferred accounts;
•
certain former citizens or long-term residents of the United States;
•
persons (other than Non-U.S. Holders) having a functional currency other than the U.S. dollar; and
•
persons that own directly, indirectly or constructively 10% or more of our voting shares.
(a)
the stock of that corporation with respect to which the dividends are paid is readily tradable on an established securities market
in the United States, or