FORM 20-F THOMSON multimedia - Technicolor

federal income tax liability. See ‘‘Taxation of Dividends’’ — ‘‘French Refund Procedure’’, above, for
the procedures for obtaining a tax refund.
Dividends will be income from sources outside the United States, but generally will be ‘‘passive
income’’ or ‘‘financial services income’’ which is treated separately from other types of income for
purposes of computing the foreign tax credit allowable to you.
Taxation of Capital Gains
French Taxation
Under the Treaty, you will not be subject to French tax on any gain derived from the sale or
exchange of our shares, unless the gain is effectively connected with a permanent establishment or
fixed base maintained by you in France.
United States Federal Income Taxation
Subject to the PFIC rules discussed below, if you are a U.S. holder and you sell or otherwise
dispose of your shares or ADSs, you will recognize capital gain or loss for United States federal
income tax purposes equal to the difference between the U.S. dollar value of the amount that you
realize and your tax basis, determined in U.S. dollars, in your shares or ADSs. Capital gain of a noncorporate
U.S. holder is generally taxed long-term capital gain rates where the property is held for
more than one year. The gain or loss will generally be income or loss from sources within the United
States for foreign tax credit limitation purposes.
French Gift and Inheritance Tax
Under the estate and gift tax convention between the United States and France, a transfer of
shares by gift or by reason of the death of a U.S. holder entitled to benefits under that convention
will not be subject to French gift or inheritance tax, so long as the donor or decedent was not
domiciled in France at the time of the transfer, and the shares were not used or held for use in the
conduct of a business or profession through a permanent establishment or fixed base in France.
Passive Foreign Investment Company Status
We believe that our shares and ADSs should not be treated as stock of a PFIC, for United
States federal income tax purposes, but this conclusion is a factual determination that is made
annually and thus may be subject to change. If we were to become a PFIC, the tax treatment of
distributions on our shares or ADSs and of any gains realized upon the disposition of our shares or
ADSs may be less favorable than as described herein. You should consult your own tax advisors
regarding the PFIC rules and their effect on you if you hold shares or ADSs.
E — Documents on Display
Thomson is subject to the reporting requirements of the Securities Exchange Act of 1934 and as
a result files reports and other information with the Securities and Exchange Commission. However,
as Thomson is a foreign private issuer, it and its stockholders are exempt from some of the
Exchange Act reporting requirements. The reporting requirements that do not apply to us or our
stockholders include the proxy solicitation rules, the rules regarding the furnishing of annual reports
to stockholders, and Section 16 short-swing profit reporting for our officers and directors and for
holders of more than 10% of our shares. You may read and copy any document Thomson files with
the SEC at its public reference room at 450 Fifth Street, N.W., Washington D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for more information on the public reference room and its copy
charges.
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