Company: RETO
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041195
Chunk: 72

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 19
Chunk 72
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The Company is subject to VAT for selling products
in China. The applicable VAT rate is13% for products sold in the PRC. The amount of VAT liability is determined by applying the applicable
tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input
VAT). Under the commercial practice of the PRC, the Company pays VAT based on tax invoices issued.

  (c)      Taxes payable  
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The Company’s taxes payable consist of the following:

                                            As of                          As of                      
                                            December 31,                   December 31,               
                                            2024                           2023                       
 ──────────────────────────────────────────────────────────────────────────────────────────────────────
  VAT tax payable                           $                  71,796      $                  72,295  
  Corporate income tax payable                                170,370                        175,157  
  Land use tax and other taxes payable                          7,462                          6,681  
  Total                                     $                 249,628      $                 254,133  

As of December 31, 2024 and 2023, the Company
had taxes payable of approximately $0.2million and $0.2million, respectively, mostly related to the unpaid income tax and business tax
in China. For the years ended December 31, 2024, 2023 and 2022, the Company has not received any penalty or interest charge notice from
local tax authorities. Due to uncertainties associated with the status of examinations, including the protocols of finalizing audits by
the relevant tax authorities, there is a high degree of uncertainty regarding the future cash outflows associated with these unpaid tax
balances. The final outcome of this tax uncertainty is dependent upon various matters including tax examinations, interpretation of tax
laws or expiration of the statute of limitations. The Company believes it is likely that the Company can reach an agreement with the local
tax authority to fully settle its tax payables in a short term but cannot guarantee such settlement will ultimately occur.

F-24

RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - COMMITMENTS AND CONTIGENCIES

Contingencies

From time to time, the Company is a party to various
legal actions arising in the ordinary course of business. The majority of