Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 211

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 10
Chunk 211
---
 as to whether we are a PFIC, however, and there can be no assurance with respect to our status as
a PFIC for our current taxable year or any future taxable year. Depending on the amount of cash we raise in the IPO, together with any
other assets held for the production of passive income, it is possible that, for our current taxable year or for any subsequent taxable
year, more than 50% of our assets may be assets held for the production of passive income. We will make this determination following
the end of any particular tax year. In addition, because the value of our assets for purposes of the asset test will generally be determined
based on the market price of our Ordinary Shares and because cash is generally considered to be an asset held for the production of passive
income, our PFIC status will depend in large part on the market price of our Ordinary Shares and the amount of cash we raise in the IPO.
Accordingly, fluctuations in the market price of the Ordinary Shares may cause us to become a PFIC. In addition, the application of the
PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how, and how
quickly, we spend the cash we raise in the IPO. We are under no obligation to take steps to reduce the risk of our being classified as
a PFIC, and as stated above, the determination of the value of our assets will depend upon material facts (including the market price
of our Ordinary Shares from time to time and the amount of cash we raise in the IPO) that may not be within our control. If we are a
PFIC for any year during which you hold Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years during which
you hold Ordinary Shares. If we cease to be a PFIC and you did not previously make a timely “mark-to-market” election as
described below, however, you may avoid some of the adverse effects of the PFIC regime by making a “purging election” (as
described below) with respect to the Ordinary Shares.

If
we are a PFIC for your taxable year(s) during which you hold Ordinary Shares, you will be subject to special tax rules with respect to
any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge)
of the Ordinary Shares, unless you make a “mark-to-market” election as discussed