Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 157

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 10
Chunk 157
---
 under recently issued temporary guidance and complies with the specific requirements set forth in such guidance. Gain, if any,
realized by a U. S. Holder on the sale or other disposition of the ADSs or Class A ordinary shares generally will be treated as U. S. source
income for U. S. foreign tax credit purposes. However, a U. S. Holder that is eligible for the benefits of the Treaty may elect to treat
such gain as PRC source gain under the Treaty. If no such election is made by a U. S. Holder that is eligible for the benefits of the Treaty,
such a U. S. Holder that does not receive significant foreign source income from other sources may not be able to derive effective U. S.
foreign tax credit benefits in respect of such PRC tax. If the PRC tax is not a creditable tax or is not claimed as a credit by the U. S.
Holder pursuant to the Treaty, the tax would reduce the amount realized on the sale or other disposition of the ADSs or Class A ordinary
shares even if the U. S. Holder has elected to claim a foreign tax credit for other taxes in the same year. The temporary guidance discussed
above also indicates that the Treasury and the IRS are considering proposing amendments to the December 2021 regulations and that the
temporary guidance can be relied upon until additional guidance is issued that withdraws or modifies the temporary guidance. U. S. Holders
should consult their own tax advisors regarding the application of the foreign tax credit rules to their investment in, and disposition
of, the ADSs or Class A ordinary shares.

Deposits and withdrawals of Class A ordinary shares
by U. S. Holders in exchange for ADSs will not result in the realization of gain or loss for U. S. federal income tax purposes.

Passive Foreign Investment Company Considerations

In the event that we are classified as a PFIC
in any year during which a U. S. Holder holds our Class A ordinary shares or ADSs and such U. S. Holder does not make a mark-to-market election,
as described below, the U. S. Holder will be subject to a special tax at ordinary income tax rates on “excess distributions,”
including certain distributions by us (generally, any distributions that you receive in a taxable year that are greater than 125% of the
average annual distributions received during the shorter of the three preceding taxable years or the U. S. Holder’s holding period