Company: GCL
Filing Date: 2025-07-31
Form Type: 20-F
Source: 0001213900-25-069672
Chunk: 40

Company: GCL Global Holdings Ltd
Filing Date: 2025-07-31
Form: 20-F
Item: Item 3
Chunk 40
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 classified as a foreign corporation (and, therefore, a non-U. S. tax resident)
for U. S. federal income tax purposes. Section 7874 provides an exception pursuant to which a foreign incorporated entity may, in certain
circumstances, be treated as a U. S. corporation for U. S. federal income tax purposes. These rules are complex and require analysis of
all relevant facts and circumstances, and there is limited guidance and significant uncertainties as to their application. If it were
determined that we should be taxed as a U. S. corporation for U. S. federal income tax purposes under section 7874, we would be subject
to U. S. federal income tax on our taxable income like any other U. S. corporation and certain distributions made by us to non-U. S. holders’
securities would be subject to U. S. withholding tax at the rate of 30% or such lower rate as provided by an applicable treaty. Taxation
as a U. S. corporation could also have a material adverse effect on our financial position and results from operations.

We may be or become
a passive foreign investment company (“ PFIC”), which could result in adverse U. S. federal income tax consequences to U. S.
Holders of our Ordinary Shares.

In
general, we will be treated as a PFIC for any taxable year in which either (1) at least 75% of our gross income (looking through certain
25% or more-owned subsidiaries) is passive income or (2) at least 50% of the average value of our assets (looking through certain 25%
or more-owned subsidiaries) is attributable to assets that produce, or are held for the production of, passive income. Passive income
generally includes, without limitation, dividends, interest, rents, royalties, and gains from the disposition of passive assets. If we
are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U. S. Holder (as defined
in the Section of this report captioned “Material U. S. Federal Income Tax Considerations”) of our securities, the
U. S. Holder may be subject to increased U. S. federal income tax liability and may be subject to additional reporting requirements. The
determination of whether we are a PFIC is a fact-intensive determination made on an annual basis applying principles and methodologies
that in some circumstances are unclear and subject to