Company: MEGL
Filing Date: 2025-04-14
Form Type: 20-F
Source: 0001641172-25-004566
Chunk: 99

Company: Magic Empire Global Ltd
Filing Date: 2025-04-14
Form: 20-F
Item: Item 10
Chunk 99
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 the requirements for PFIC
status and the U. S. Holder makes a “deemed sale” election with respect to our shares. If the election is made, the U. S. Holder
will be deemed to sell our shares it holds at their fair market value on the last day of the last taxable year in which we qualified
as a PFIC, and any gain recognized from such deemed sale would be taxed under the PFIC excess distribution regime. After the deemed sale
election, the U. S. Holder’s ordinary shares would not be treated as shares of a PFIC unless we subsequently become a PFIC.

If
we are a PFIC for any taxable year during which a U. S. Holder holds our shares and one of our non-United States subsidiaries is also
a PFIC (i. e., a lower-tier PFIC), such U. S. Holder would be treated as owning a proportionate amount (by value) of the shares of the
lower-tier PFIC and would be taxed under the PFIC excess distribution regime on distributions by the lower-tier PFIC and on gain from
the disposition of shares of the lower-tier PFIC even though such U. S. Holder would not receive the proceeds of those distributions or
dispositions. Any of our non-United States subsidiaries that have elected to be disregarded as entities separate from us or as partnerships
for U. S. federal income tax purposes would not be corporations under U. S. federal income tax law and accordingly, cannot be classified
as lower-tier PFICs. However, non-United States subsidiaries that have not made the election may be classified as a lower-tier PFIC if
we are a PFIC during your holding period and the subsidiary meets the PFIC income test or PFIC asset test. Each U. S. Holder is advised
to consult its tax advisors regarding the application of the PFIC rules to any of our non-United States subsidiaries.

If
we are a PFIC, a U. S. Holder will not be subject to tax under the PFIC excess distribution regime on distributions or gain recognized
on our ordinary shares if a valid “mark-to-market” election is made by the U. S. Holder for our shares. An electing U. S. Holder
generally would take into account as ordinary income each year, the excess of the fair market value of our shares held at the end of
such taxable year over the adjusted tax basis of such ordinary shares. The U. S