Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 214

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 10
Chunk 214
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 deemed sale of such Ordinary Shares at their fair market value on the last day of the last year in which we
are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating
the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the
fair market value of the Ordinary Shares on the last day of the last year in which we are treated as a PFIC) and holding period (which
new holding period will begin the day after such last day) in your Ordinary Shares for tax purposes.

IRC
Section 1014(a) provides for a step-up in basis to the fair market value for our Ordinary Shares when inherited from a decedent that
was previously a holder of our Ordinary Shares. However, if we are determined to be a PFIC and a decedent that was a U. S. Holder did
not make either a timely qualified electing fund election for our first taxable year as a PFIC in which the U. S. Holder held (or was
deemed to hold) our Ordinary Shares, or a mark-to-market election and ownership of those Ordinary Shares are inherited, a special provision
in IRC Section 1291(e) provides that the new U. S. Holder’s basis should be reduced by an amount equal to the Section 1014 basis
minus the decedent’s adjusted basis just before death. As such if we are determined to be a PFIC at any time prior to a decedent’s
passing, the PFIC rules will cause any new U. S. Holder that inherits our Ordinary Shares from a U. S. Holder to not get a step-up in basis
under Section 1014 and instead will receive a carryover basis in those Ordinary Shares.

You
are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our Ordinary Shares and the
elections discussed above.

Information
Reporting and Backup Withholding

Dividend
payments with respect to our Ordinary Shares and proceeds from the sale, exchange or redemption of our Ordinary Shares may be subject
to information reporting to the U. S. Internal Revenue Service and possible U. S. backup withholding under Section 3406 of the US Internal
Revenue Code with at a current flat rate of 24%. Backup withholding will not apply, however, to a U. S. Holder who furnishes a