Vistaprint 2009 Annual Report Download - page 43

We are subject to payment-related risks.
We accept payments for our products and services on our websites by a variety of methods,
including credit card, debit card and bank check. As we offer new payment options to our customers,
we may be subject to additional regulations, compliance requirements and fraud risk. For certain
payment methods, including credit and debit cards, we pay interchange and other fees, which may
increase over time and raise our operating costs and lower our profit margins or require that we charge
our customers more for our products. We are also subject to payment card association and similar
operating rules and requirements, which could change or be reinterpreted to make it difficult or
impossible for us to comply. If we fail to comply with these rules and requirements, we may be subject
to fines and higher transaction fees and lose our ability to accept credit and debit card payments from
our customers or facilitate other types of online payments, and our business and operating results
could be materially adversely affected.
We may be subject to product liability claims if people or property are harmed by the products
we sell.
Some of the products we sell may expose us to product liability claims relating to personal injury,
death, or property damage, and may require product recalls or other actions. Although we maintain
product liability insurance, we cannot be certain that our coverage will be adequate for liabilities
actually incurred or that insurance will continue to be available to us on reasonable terms, or at all.
Risks Related to Our Corporate Structure
Challenges by various tax authorities to our complex international structure could, if
successful, increase our effective tax rate and adversely affect our earnings.
Our international structure is complex. Vistaprint N.V. is organized in the Netherlands. Certain
management services relating to the activities of the Vistaprint group are provided by employees of our
non-Dutch subsidiaries, who are based in jurisdictions other than the Netherlands. We have
endeavored to structure our business so that our operations outside the Netherlands are carried out by
our local subsidiaries and the business income of the Vistaprint group is, in general, not subject to tax
in these jurisdictions outside the Netherlands, such as Jamaica, the United States, Canada, Spain,
France, or Switzerland. Many countries’ tax laws, including United States tax law, impose taxation
upon entities that are engaged in a business in that country, but do not clearly define activities that
constitute being engaged in a business. The tax authorities in these countries could contend that some
or all of the income of the Vistaprint N.V. group should be subject to income or other tax. If the income
of the Vistaprint N.V. group is taxed in these other jurisdictions, such taxes will increase our effective
tax rate and adversely affect our results of operations.
On May 6, 2009, the Dutch Revenue Authority granted us an Advanced Tax Ruling. The
Advanced Tax Ruling provides, among other things, for an exemption for Vistaprint N.V. from Dutch
corporate taxes on dividend income from its subsidiaries and confirms the amount of business income
of Vistaprint N.V. that should be subject to tax in the Netherlands. The Advanced Tax Ruling
establishes conditions with which we need to comply to retain the benefits of the Advanced Tax Ruling,
including the requirement that we perform certain management functions in the Netherlands. If we are
unable to adhere to the terms of the Advanced Tax Ruling, the Dutch authorities may revoke the
Advanced Tax Ruling and the result may be an increase in our effective corporate tax rate and/or
Dutch dividend withholding tax due on share repurchases. If this were to occur, our expenses may
increase significantly beyond what we anticipate and our business and results of operations would be
adversely impacted.
On May 4, 2009, the French tax authorities granted us a “headquarters” ruling (“Decision du
regime des Quartiers Généraux”) with respect to our French subsidiary. The headquarters ruling
Form 10-K
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