Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 154

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 10
Chunk 154
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 generally
is a passive asset for these purposes. If we own at least 25% (by value) of the stock of another corporation, for purposes of determining
whether we are a PFIC, we will be treated as owning our proportionate share of the other corporation’s assets and receiving our
proportionate share of the other corporation’s income.

Based on our financial statements, the composition
of our income and assets, the manner in which we conduct our business, the relevant market data and our current expectations regarding
the value and nature of our assets and the sources and nature of our income, we believe there is a significant risk that we were a PFIC
in our taxable year ending September 30, 2024. Further, there is a significant risk that we will be a PFIC for our current taxable year
and in future taxable years. Whether or not we are a PFIC is a factual determination made annually, and our status could change depending
upon, among other things, changes in the composition of our gross income and the relative quarterly values of our assets.

Further, if we are a PFIC for any year during
which a U. S. Holder holds our Class A ordinary shares or ADSs, we generally will continue to be treated as a PFIC for all subsequent years
during which such U. S. Holder holds our Class A ordinary shares or ADSs unless we cease to be a PFIC and the U. S. Holder makes a special
“purging” election on IRS Form 8621.

Taxation of Dividends

Subject to the discussion below under “ - Passive
Foreign Investment Company Considerations,” the gross amount of any distribution of cash or property with respect to our Class A
ordinary shares or ADSs (including amounts, if any, withheld to reflect PRC taxes) that is paid out of our current or accumulated earnings
and profits (as determined for U. S. federal income tax purposes) will generally be includible in your taxable income as ordinary dividend
income on the day on which you receive the dividend, in the case of Class A ordinary shares, or the date the depositary receives the dividends,
in the case of ADSs, and will not be eligible for the dividends received deduction allowed to U. S. corporations under the Code.

We do not expect to maintain calculations of our
earnings and profits in accordance with U. S. federal income tax principles. U. S. Holders therefore should expect that distributions generally
will be treated