Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 107

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 10
Chunk 107
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 for the year in which the excess distribution or sale occurs; and (iv) amounts allocated to a year prior to the first year in the U. S. Holder’s holding period in which we were classified as a PFIC or to the year in which the excess distribution or the disposition occurred are taxed as ordinary income and no interest charge applies.

Under certain attribution rules, if we are a PFIC, U. S. Holders will generally be deemed to own their proportionate share of our direct or indirect equity interest in any company that is also a PFIC (a “ Subsidiary PFIC”), and will be subject to U. S. federal income tax on their proportionate share of (a) any “excess distributions,” as described above, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by us or another Subsidiary PFIC, both as if such U. S. Holders directly held the shares of such Subsidiary PFIC. In addition, U. S. Holders may be subject to U. S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of our common shares held by such U. S. Holders. Accordingly, U. S. Holders should be aware that they could be subject to tax even if no distributions are received and no redemptions or other dispositions of our common shares held by them are made.

A U. S. Holder may generally avoid the PFIC regime by making a “qualified electing fund” election which generally provides that, in lieu of the foregoing treatment, our earnings and net capital gains, on a pro rata basis, would be currently included in their gross income for U. S. federal income tax purposes. However, we may be unable or unwilling to provide information to our U. S. Holders that would enable them to make a “qualified electing fund” election; thus, such election may not be available.

In addition, U. S. Holders may generally avoid the PFIC regime by making the “mark-to-market” election with respect to our common shares as long as we are a PFIC and our common shares are considered to be readily tradable on an established securities market within the United States. “ Mark-to-market,” in this context, means including in ordinary income each taxable year the excess, if any, of the