Company: PAX
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025640
Chunk: 28

Company: Patria Investments Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 28
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 and among us and our subsidiaries, including, but not limited to, provision of marketing, investor relations, investment advisory and business support services, are made on a commercial basis and consistent with the arm’s length principle as set forth under the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations issued by the Organization for Economic Co-Operation and Development (the “ OECD Guidelines”), as well as local legislation of the entities involved in the controlled transactions. However, we are subject to the risk that tax authorities in the jurisdictions in which we operate could dispute our practices, which could adversely affect our business.

  Patria Investments Limited      18  

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As a consequence of globalization and growing world trade, tax authorities worldwide have increased their focus on transfer pricing with respect to cross border transactions, as part of protecting their respective country’s tax base. In the event the tax authorities in the jurisdictions where we operate consider the pricing not to be on arm’s-length terms and were to succeed with such claims, this could result in an increased tax cost, including tax surcharges and interest.

There can be no assurance that we will not be a passive foreign investment company (“ PFIC”), for any taxable year, which could subject United States investors in our Class A common shares to significant adverse U. S. federal income tax consequences.

Under the Internal Revenue Code of 1986, as amended (the “ Code”), we will be a PFIC for any taxable year in which either (1) 75% or more of our gross income consists of “passive income”, or (2) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of “passive income.” For this purpose, subject to certain exceptions, passive income includes interest, dividends, rents, gains from the sale or exchange of property that gives rise to such income, gains from the sale of partnership interests and gains from transactions in commodities. We do not believe we were a PFIC for our 2024 taxable year. However, there can be no assurance that the Internal Revenue Service (the “ IRS”), will agree with our conclusion. Moreover, our PFIC status is a factual determination that is made on an annual basis. Whether we will be a PFIC in 2025 or in any future year is uncertain because, among other things, our PFIC status depends on the composition of our income and assets and the market value of our assets from time to time (which may be determined, in part