Company: MAGH
Filing Date: 2025-09-15
Form Type: 20-F
Source: 0001493152-25-013424
Chunk: 109

Company: Magnitude International Ltd
Filing Date: 2025-09-15
Form: 20-F
Item: Item 10
Chunk 109
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 for more than one year, you may be eligible for reduced
tax rates on any such capital gains. The deductibility of capital losses is subject to limitations.

  70  

Passive
foreign investment company

A
non-U. S. corporation is considered a Passive Foreign Investment Company, or PFIC, as defined in Section 1297(a) of the US Internal Revenue
Code, for any taxable year if either:

  at                                                                                                                                      
  at                                                                                                                                      

Passive
income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of
a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets
and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by
value) of the stock. In determining the value and composition of our assets for purposes of the PFIC asset test, the value of our assets
must be determined based on the market value of our Ordinary Shares from time to time, which could cause the value of our non-passive
assets to be less than 50% of the value of all of our assets (including the cash raised in the IPO) on any particular quarterly testing
date for purposes of the asset test.

Whether
we are a PFIC with respect to any year depends on our operations and the composition of our assets during that 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. 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