LDK Solar Co., Ltd. - Asia Europe Clean Energy (Solar) Advisory Co ...

‚ a trust that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a
United States person.
If you are not described as a U.S. Holder, you will be considered a ""Non-U.S. Holder.''
Non-U.S. Holders should consult the discussion below regarding the United States federal income tax
consequences applicable to Non-U.S. Holders.
If a partnership holds ordinary shares or ADSs, the tax treatment of a partner will generally depend upon
the status of the partner and the activities of the partnership. If you are a partner of a partnership holding
ordinary shares or ADSs, you should consult your tax advisor.
The discussion below assumes that the representations contained in the deposit agreement are true and
that the obligations in the deposit agreement and any related agreement will be performed in accordance with
the terms. If you hold ADSs, you generally will be treated as the owner of the underlying ordinary shares
represented by those ADSs for United States federal income tax purposes. Accordingly, deposits or
withdrawals of shares for ADSs will not be subject to United States federal income tax.
U.S. Holders
Taxation of dividends and other distributions on the ordinary shares or ADSs
Subject to the passive foreign investment company, or PFIC, rules discussed below, all our distributions
to you with respect to the ordinary shares or ADSs, other than certain pro rata distributions of our ordinary
shares or ADSs, will be includible in your gross income as ordinary dividend income when you, in the case of
ordinary shares, or the depositary, in the case of ADSs, receive the distribution, but only to the extent that the
distribution is paid out of our current or accumulated earnings and profits. For this purpose, earnings and
profits will be computed under United States federal income tax principles. The dividends will not be eligible
for the dividends-received deduction allowed to corporations. To the extent that the amount of the distribution
exceeds our current and accumulated earnings and profits, it will be treated first as a tax-free return of your
tax basis in your ordinary shares or ADSs, and to the extent the amount of the distribution exceeds your tax
basis, the excess will be taxed as capital gain.
With respect to individual U.S. Holders, for taxable years beginning before January 1, 2011, dividends
may be taxed at the lower applicable capital gains rate provided that (1) the ADS or ordinary shares, as
applicable, are readily tradable on an established securities market in the United States, (2) we are not a
PFIC (as discussed below) for either our taxable year in which the dividend was paid or the preceding taxable
year, and (3) certain holding period requirements are met. Common or ordinary shares, or ADSs representing
such shares, are considered for purposes of clause (1) above to be readily tradable on an established securities
market in the United States if they are listed on the Nasdaq Stock Market or on certain registered national
exchanges. Our ordinary shares are not readily tradable on an established securities market in the United
States; consequently, dividends received with respect to such shares are ineligible to be taxed at the lower
capital gains rate. The ADSs will be listed on the New York Stock Exchange, however, and thus will qualify
as readily tradable on an established securities market in the United States. Moreover, as explained in further
detail below, we do not expect to be treated as a PFIC for our current taxable year, and we do not expect to
become a PFIC in the future. You should consult your tax advisor regarding the availability of the lower rate
for dividends paid with respect to our ADSs or ordinary shares.
Dividends will constitute foreign source income for foreign tax credit limitation purposes. The rules
governing the foreign tax credit are complex. Investors are urged to consult their tax advisors regarding the
availability of the foreign tax credit under their particular circumstances.
Taxation of disposition of ordinary shares or ADSs
Subject to the PFIC rules discussed below, you will recognize taxable gain or loss on any sale or exchange
of an ordinary share or ADS equal to the difference between the amount realized (in U.S. dollars) for the
ordinary share or ADS and your tax basis (in U.S. dollars) in the ordinary share or ADS. The gain or loss will
generally be capital gain or loss. If you are an individual who has held the ordinary share or ADS for more
than one year, you will be eligible for reduced rates of taxation (generally 15%). You may deduct any loss
resulting from the sale or exchange of an ordinary share or ADS only against other capital gains. If you are an
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