Company: MEGL
Filing Date: 2025-04-14
Form Type: 20-F
Source: 0001641172-25-004566
Chunk: 102

Company: Magic Empire Global Ltd
Filing Date: 2025-04-14
Form: 20-F
Item: Item 10
Chunk 102
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 of capital and reduce (but not below zero) the adjusted tax basis of the U. S. Holder’s shares. To the
extent the distribution exceeds the adjusted tax basis of the U. S. Holder’s shares, the remainder will be taxed as capital gain.
Because we may not account for our earnings and profits in accordance with U. S. federal income tax principles, U. S. Holders should expect
all distributions to be reported to them as dividends.

Distributions
on our shares that are treated as dividends generally will constitute income from sources outside the United States for foreign tax credit
purposes and generally will constitute passive category income. Such dividends will not be eligible for the “dividends received”
deduction generally allowed to corporate shareholders with respect to dividends received from U. S. corporations. Dividends paid by a
“qualified foreign corporation” to certain non-corporate U. S. Holders may be are eligible for taxation at a reduced capital
gains rate rather than the marginal tax rates generally applicable to ordinary income provided that a holding period requirement (more
than sixty (60) days of ownership, without protection from the risk of loss, during the 121-day period beginning sixty (60) days before
the ex-dividend date) and certain other requirements are met. Each U. S. Holder is advised to consult its tax advisors regarding the availability
of the reduced tax rate on dividends to its particular circumstances. However, if we are a PFIC for the taxable year in which the dividend
is paid or the preceding taxable year (see discussion above under “ - Passive Foreign Investment Company Consequences”),
we will not be treated as a qualified foreign corporation, and therefore the reduced capital gains tax rate described above will not
apply.

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Dividends
will be included in a U. S. Holder’s income on the date of the depositary’s receipt of the dividend. The amount of any dividend
income paid in BVI dollars will be the U. S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt,
regardless of whether the payment is in fact converted into U. S. dollars. If the dividend is converted into U. S. dollars on the date
of receipt, a U. S. Holder should not be required to recognize foreign currency gain or loss in respect to the dividend income. A U. S.
Holder may have foreign currency gain or loss if the dividend is converted into U. S. dollars