Company: MASK
Filing Date: 2025-01-10
Form Type: 424B4
Source: 0001213900-25-002376
Chunk: 101

Company: 3 E Network Technology Group Ltd
Filing Date: 2025-01-10
Form: 424B4
Chunk 101
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 to withhold a 10% withholding tax from dividends we pay to our shareholders that are non -residententerprises. Such 10% tax rate could be reduced by applicable tax treaties or similar arrangements between mainland China and the jurisdiction of our shareholders. For example, for shareholders eligible for the benefits of the tax treaty between mainland China and Hong Kong, the tax rate is reduced to 5% for dividends if relevant conditions are met. In addition, non -residententerprise shareholders may be subject to a 10% PRC tax on gains realized on the sale or other disposition of ordinary shares, if such income is treated as sourced from within the PRC. It is unclear whether our non -PRCindividual shareholders would be subject to any PRC tax on dividends or gains obtained by such non -PRCindividual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to such dividends or gains, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether non -PRCshareholders of the Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that the Company is treated as a PRC resident enterprise. Provided that our BVI holding company, 3e Network, is not deemed to be a PRC resident enterprise, our shareholders who are not PRC residents will not be subject to PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of our Class A Ordinary Shares. However, under Circular7, where a non -residententerprise conducts an “indirect transfer” by transferring taxable assets, including, in particular, equity interests in a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding company, the non -residententerprise, being the transferor, or the transferee or the PRC entity which directly owned such taxable assets may report to the relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise. Provided that our BVI holding company, 3e Network, is not deemed to be a PRC resident enterprise, our shareholders who are not P