or ADSs, unless such income is effectively connected with
the conduct by such Non-U.S. Holder of a trade or business
in the United States.
Sale or exchange of common shares or ADSs
A U.S. Holder generally will recognize gain or loss on the
sale or exchange of common shares or ADSs equal to the
difference between the amount realized on such sale or
exchange and the U.S. Holder's adjusted tax basis in the
common shares or ADSs. Such gain or loss will be capital
gain or loss. In the case of a non-corporate U.S. Holder, the
maximum marginal U.S. federal income tax rate applicable
to such gain will be lower than the maximum marginal U.S.
federal income tax rate applicable to ordinary income (other
than certain dividends), if such U.S. Holder's holding period
for such common shares or ADSs exceeds one year. Gain or
loss, if any, recognized by a U.S. Holder generally will be
treated as U.S. source income or loss for U.S. foreign tax
credit purposes. The deductibility of capital losses is subject
to limitations.
A U.S. Holder's initial tax basis in common shares or ADSs
will be the U.S. dollar value of the euro denominated
purchase price determined on the date of purchase. If the
common shares or ADSs are treated as traded on an
"established securities market," a cash basis U.S. Holder,
or, if he/she or it elects, an accrual basis U.S. Holder, will
determine the dollar value of the cost of such common
shares or ADSs by translating the amount paid at the spot
rate of exchange on the settlement date of the purchase. If a
U.S. Holder converts U.S. dollars to euros and immediately
uses that currency to purchase common shares or ADSs,
such conversion generally will not result in taxable gain or
loss to such U.S. Holder.
With respect to the sale or exchange of common shares or
ADSs, the amount realized generally will be the U.S. dollar
value of the payment received determined on (1) the date of
receipt of payment in the case of a cash basis U.S. Holder
or (2) the date of disposition in the case of an accrual basis
U.S. Holder. If the common shares or ADSs are treated as
traded on an "established securities market," a cash basis
taxpayer, or, if he/she or it elects, an accrual basis taxpayer,
will determine the U.S. dollar value of the amount realized by
translating the amount received at the spot rate of exchange
on the settlement date of the sale. Subject to the discussion
under "Backup Withholding Tax and Information Reporting
Requirements" below in this Item 10, a Non-U.S. Holder of
common shares or ADSs generally will not be subject to U.S.
federal income or withholding tax on any gain realized on the
sale or exchange of such common shares or ADSs unless (1)
such gain is effectively connected with the conduct by such
Non-U.S. Holder of a trade or business in the United States.
Backup withholding tax and information
reporting requirements
U.S. backup withholding tax and information reporting
requirements generally apply to certain payments to certain
non-corporate holders of stock. Information reporting
generally will apply to payments of dividends on, and to
proceeds from the sale or redemption of, common shares
or ADSs made within the United States, or by a U.S. payor
or U.S. middleman to a holder of common shares or ADSs
(other than an "exempt recipient" which is a payee,
including a corporation, a payee that is not a U.S. person
that provides an appropriate certification, and certain other
persons). A payor will be required to withhold backup
withholding tax from any payments of dividends on, or the
proceeds from the, sale or redemption of, common shares or
ADSs within the United States to a holder, or by a U.S. payor
or U.S. middleman (other than an "exempt recipient") if
such holder fails to furnish its correct taxpayer identification
number or otherwise fails to comply with, or establish an
exemption from, such backup withholding tax requirements.
The backup withholding rate is 28 percent through 2010.
In the case of such payments made within the United States
to a foreign simple trust, a foreign grantor trust or a foreign
partnership, other than payments to a foreign simple trust,
a foreign grantor trust or a foreign partnership that qualifies
as a "withholding foreign trust" or a "withholding foreign
partnership," within the meaning of the applicable U.S.
Treasury Regulations and payments to a foreign simple trust,
a foreign grantor trust or a foreign partnership that are
effectively connected with the conduct of a trade or business
in the United States, the beneficiaries of the foreign simple
trust, the persons treated as the owners of the foreign grantor
trust or the partners of the foreign partnership, as the
case may be, will be required to provide the certification
discussed above in order to establish an exemption from
backup withholding tax and information reporting
requirements. Moreover, a payor may rely on a certification
provided by a payee that is not a U.S. person only if such
payor does not have actual knowledge or a reason to know
that any information or certification stated in such certificate
is incorrect.
Ahold Annual Report 2006 149
