Company: GNOLF
Filing Date: 2025-05-01
Form Type: 20-F/A
Source: 0001654954-25-004987
Chunk: 35

Company: GENOIL INC
Filing Date: 2025-05-01
Form: 20-F/A
Chunk 35
---
 U.S. federal, state, local, and foreign tax consequences of purchasing, owning and disposing of the Corporation's Common Shares.

Canadian Federal Income Tax Consequences

Disposition of Common Shares

Provided that the Common Shares are listed on a "prescribed stock exchange", which currently includes the TSX Venture Exchange but does not include the OTC Markets, a U.S. Holder of Common Shares will not be subject to tax in Canada under the ITA on capital gains realized on the disposition of such Common Shares unless the shares are "taxable Canadian property." Such Common Shares will be taxable Canadian property if, in general, at any time during the sixty month period immediately preceding the disposition, 25% or more of Genoil's issued shares of any class (or an option to acquire 25% or more of the issued shares of any class) were owned by such holder, or by such holder and persons with whom such holder did not deal at arm's length. If the Corporation's shares are taxable Canadian property to a U.S. Holder of Common Shares, 50% of any resulting capital gain realized on the disposition of such shares may be subject to tax in Canada. However, the Treaty provides that gains realized by a U.S. Holder of Common Shares on the disposition of shares of a Canadian corporation will be exempt from federal tax in Canada unless the value of the Canadian corporation is derived principally from real property situated in Canada. It is the current position of the Canada Revenue Agency that a U.S. limited liability company is not entitled to the benefits of the Treaty.

Dividend Distributions on Genoil's Shares

Dividends paid on Genoil's Common Shares held by a U.S. Holder of Common Shares will be subject to Canadian non-resident withholding tax. The Corporation is required to withhold taxes at source. Under the Treaty, a withholding rate of 5% is applicable to corporations resident in the United States and who are beneficial owners of at least 10% of the voting shares of the Corporation. Under the Treaty, a withholding rate of 15% is applicable in all other cases.

United States Federal Income Tax Consequences

The U.S. federal income tax consequences related to the disposition and ownership of Common Shares, subject to the Foreign Personal Holding Company Rules, Passive Foreign Investment Company and Controlled Foreign Corporation Rules contained in the Code, are generally as follows:

Disposition of Common Shares

On a disposition of Common Shares, a U.S. Holder of Common Shares generally will recognize a gain or loss. The gain or loss will be