Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 101
purposes (and Sasol anticipates that such dividends will
be reported as qualified dividends on Form 1099 DIV
delivered to US holders) if Sasol was not, in the year
prior to the year in which the dividend was paid, and is
not, in the year in which the dividend is paid, a Passive
Foreign Investment Company (PFIC) for US federal
income tax purposes. Each individual US holder of
shares or ADSs is urged to consult its own tax advisor
regarding the availability to such HUS holder of the
preferential dividend tax rate in light of its own
particular situation including foreign tax credit
limitations with respect to any qualified dividend
income paid by Sasol, as applicable.
date of receipt, a US holder of shares generally should
not be required to recognise foreign currency gain or
loss in respect of the dividend. If the foreign currency
received in the distribution is not converted into US
dollars on the date of receipt, a US holder of shares will
have a basis in the foreign currency equal to its US
dollar value on the date of receipt.
Any gain or loss recognised upon a subsequent
conversion or other disposition of the foreign currency
will be treated as US source ordinary income or loss. In
the case of a US holder of ADSs, the amount of any
distribution paid in a foreign currency ordinarily will be
converted into US dollars by the Depositary upon its
receipt. Accordingly, a US holder of ADSs generally
will not be required to recognise foreign currency gain
or loss in respect of the distribution.
Sale, exchange or other taxable disposition of shares
or ADSs
Upon a sale, exchange or other taxable
disposition of shares or ADSs, a US holder generally
will recognise a capital gain or loss for US federal
income tax purposes in an amount equal to the
difference between the US dollar value of the amount
realised on the disposition and the US holder’s adjusted
tax basis, determined in US dollars, in the shares or
ADSs. Such gain or loss generally will be US source
gain or loss, and generally will be treated as a long-term
capital gain or loss if the holder’s holding period in the
shares or ADSs exceeds one year at the time of
disposition if Sasol was not, at any time during the
holder’s holding period, a PFIC, as discussed below,
for US federal income tax purposes. The deductibility
of capital losses is subject to significant limitations. If
the US holder is an individual, long-term capital gain
generally is subject to US federal income tax at
preferential rates. Each US holder of shares or ADSs is
urged to consult its own tax advisor regarding the
potential US tax consequences from the taxable
disposition of shares or ADSs, including foreign
currency implications arising therefrom and any
other South African taxes imposed on a taxable
disposition.
Accrual basis US holders are urged to consult
their own tax advisors regarding the requirements and
elections available to accrual method taxpayers to
determine the US dollar amount includable in income
in the case of taxes withheld in a foreign currency.
Subject to certain limitations (including a
minimum holding period requirement), South
African dividend withholding taxes (as discussed above
under “Item 10.E—Taxation—South African
taxation—Taxation of dividends”) will be treated as
foreign taxes eligible for credit against a US holder’s
US federal income tax liability. For this purpose,
dividends distributed by Sasol with respect to shares or
ADSs generally will constitute foreign source “passive
category income” for most US holders. The use of
foreign tax credits is subject to complex conditions and
limitations. In lieu of a credit, a US holder may instead
elect to deduct any such foreign income taxes paid or
accrued in the taxable year, provided that the US holder
elects to deduct (rather than credit) all foreign income
taxes paid or accrued for the taxable year. US holders
are urged to consult their own tax advisors regarding
the availability of foreign tax credits or the deductibility
of foreign taxes.
Passive foreign investment company considerations
A non-U.S. corporation is a passive foreign
investment company in any taxable year in which, after
taking into account the income and assets of certain
subsidiaries, either (a) at least 75% of its gross income
is passive income or (b) at least 50% of the quarterly
average of its assets is attributable to assets that
produce or are held to produce passive income. Sasol
believes that it should not be classified as a PFIC for
US federal income tax purposes for the taxable year
ended 30 June 2021. US holders are advised, however,
Dividends paid by Sasol will not be eligible
for the dividends-received deduction generally allowed
to US corporations in respect of dividends received
from other US corporations. Certain non-corporate US
holders are eligible for preferential rates of US federal
income tax in respect of “qualified dividend income”.
Sasol currently believes that dividends paid
with respect to its shares and ADSs should constitute
qualified dividend income for US federal income tax
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