Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 73

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 73
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 is overdue in the contribution of, or underpays, the housing provident fund, the housing provident fund
management center shall order it to make the contribution within a prescribed time limit; where the contribution has not been made after
the expiration of the time limit, an application may be made to a people’s court for compulsory enforcement.

  46  

Employee Stock Incentive Plan

Pursuant to the Notice of Issues Related to the Foreign
Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company, or Circular 7, which
was issued by the SAFE on February 15, 2012, employees, directors, supervisors, and other senior management who participate in any stock
incentive plan of a publicly-listed overseas company and who are PRC citizens or non-PRC citizens residing in China for a continuous period
of no less than one year, subject to a few exceptions, are required to register with SAFE through a qualified domestic agent, which may
be a PRC subsidiary of such overseas listed company, and complete certain other procedures. In addition, the SAT has issued certain circulars
concerning employee stock options and restricted shares. Under these circulars, employees working in the PRC who exercise stock options
or are granted restricted shares will be subject to PRC individual income tax. The PRC subsidiaries of an overseas listed company are
required to file documents related to employee stock options and restricted shares with relevant tax authorities and to withhold individual
income taxes of employees who exercise their stock option or purchase restricted shares. If the employees fail to pay or the PRC subsidiaries
fail to withhold income tax in accordance with relevant laws and regulations, the PRC subsidiaries may face sanctions imposed by the tax
authorities or other PRC governmental authorities.

Regulations Relating to Taxes

Income Tax

The PRC Enterprise Income Tax Law, or the EIT Law,
imposes a uniform enterprise income tax rate of 25% on all PRC resident enterprises, including foreign-invested enterprises, unless they
qualify for certain exceptions. The enterprise income tax is calculated based on the PRC resident enterprise’s global income as
determined under PRC tax laws and accounting standards. If a non-resident enterprise sets up an organization or establishment in the PRC,
it will be subject to enterprise income tax for the income derived from such organization or establishment in the PRC and for the income
derived from outside the PRC but with an actual connection with