Company: GLPG
Filing Date: 2025-03-27
Form Type: 20-F
Source: 0001558370-25-003806
Chunk: 285

Company: GALAPAGOS NV
Filing Date: 2025-03-27
Form: 20-F
Item: Item 10
Chunk 285
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 non-U.S. tax laws. 
U.S. Federal Income Tax Consequences of Proposed Separation 
The receipt by a U.S. holder of SpinCo ADSs in respect of our ADSs or shares in the proposed separation will be treated as a distribution to the U.S. holder under section 301 of the U.S. Internal Revenue Code for U.S. federal income tax purposes. We do not expect that the distribution of the SpinCo ADSs would qualify as a tax-free reorganization under Sections 368(a)(1)(D) and 355 of the Code. As a result, U.S. holders receiving SpinCo ADSs in the proposed separation will be treated as receiving a taxable distribution from us in respect of their ADSs or shares in an amount equal to the fair market value of the SpinCo ADSs received by such U.S. holder in the proposed separation.
The distribution will be treated as a dividend to the extent of our current and accumulated earnings and profits, as determined under U.S. federal income tax principles. 
Subject to the discussion under “Passive Foreign Investment Company Considerations” below, to the extent that the fair market value of SpinCo ADSs received by a U.S. holder in the proposed separation exceeds our accumulated earnings or profits allocated to such U.S. holder, such excess will be treated first as a non-taxable return of capital on a dollar-for-dollar basis and thereafter as capital gain. Any dividend will not be eligible for the dividends-received deduction generally allowed to corporate U.S. holders in respect of dividends received from U.S. domestic corporations. In addition, a U.S. holder’s basis in the SpinCo shares received in the proposed separation will equal their fair market value as of the date of proposed separation. 

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As described below, we do not believe that we are a PFIC based upon the expected value of our assets, including any goodwill, and the expected composition of our income and assets. However, we cannot provide any assurances regarding our PFIC status for the current, prior or future taxable years. As discussed below, if we are treated as a PFIC for any taxable year which included a U.S. holder’s holding period in ADSs, then such U.S. holder’s would be subject to different U.S. federal income taxation rules depending on whether the U.S. holder elected to make a “qualified electing fund” (a “QEF election”) or elected to make a “mark-to-market” election with respect to ADSs.