Company: ZHIHF
Filing Date: 2025-04-15
Form Type: 20-F
Source: 0001410578-25-000729
Chunk: 223

Company: Zhihu Inc.
Filing Date: 2025-04-15
Form: 20-F
Item: Item 3
Chunk 223
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 results of operations in our consolidated U. S. GAAP financial statements.

Based upon the nature and composition of our income and assets, and the market price of our ADSs, we believe that we were a PFIC for United States federal income tax purposes for the taxable year ended December 31, 2024, and we will likely be a PFIC for our current taxable year unless the market price of our ADSs increases and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of active income.

If we are classified as a PFIC for any taxable year during which a U. S. Holder holds our ADSs or Class A ordinary shares, the PFIC rules discussed below under “ - Passive Foreign Investment Company Rules” generally will apply to such U. S. Holder for such taxable year, and unless the U. S. Holder makes certain elections, will apply in future years even if we cease to be a PFIC.

The discussion below under “ - Dividends” and “ - Sale or Other Disposition” is written on the basis that we will not be or become classified as a PFIC for U. S. federal income tax purposes. The U. S. federal income tax rules that apply generally if we are treated as a PFIC for any taxable year are discussed below under “ - Passive Foreign Investment Company Rules.”

Dividends

Any cash distributions (including the amount of any PRC tax withheld) paid on our ADSs or Class A ordinary shares out of our current or accumulated earnings and profits, as determined under U. S. federal income tax principles, will generally be includible in the gross income of a U. S. Holder as dividend income on the day actually or constructively received by the U. S. Holder, in the case of Class A ordinary shares, or by the depositary, in the case of ADSs. Because we do not intend to determine our earnings and profits on the basis of U. S. federal income tax principles, any distribution we pay will generally be treated as a “dividend” for U. S. federal income tax purposes. Dividends received on our ADSs or Class A ordinary shares will not be eligible for the dividends received deduction generally allowed to corporations. A non-corporate U. S. Holder will be subject to tax at the lower capital gain tax rate applicable to “qualified dividend income,” provided that certain conditions are satisfied, including that (1) our ADSs or