Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 22

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 3
Chunk 22
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de facto management body” text should be applied in determining the
tax resident status of all offshore enterprises. According to SAT Notice 82, an offshore incorporated enterprise controlled by a PRC enterprise
or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China
and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the places
where senior management and senior management departments that are responsible for daily production, operation and management of the enterprise
perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing, lending, financing
and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are decided or need to be
decided by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate seal, the
board of directors and files of the minutes of shareholders’ meetings of the enterprise are located or preserved within the territory
of China; and (iv) one half (or more) of the directors or senior management staff having the right to vote habitually reside within the
territory of China.

We believe none of our entities
outside of China is a PRC resident enterprise for PRC tax purposes, as the standards in the preceding paragraph are not applicable to
us since we are not an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group. However, the tax resident
status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation
of the term “de facto management body.” If the PRC tax authorities determine that we are a PRC resident enterprise for enterprise
income tax purposes, we could be subject to PRC tax at a rate of 25% on our worldwide income, which could materially reduce our net income,
and we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises.
In addition, non-resident enterprise shareholders may be subject to PRC tax at a rate of 10% on gains realized on the sale or other disposition
of our Ordinary Shares, if such income is treated as sourced from within China.

Furthermore, if we are deemed
a PRC resident enterprise, dividends payable to our non-PRC individual shareholders and any gain realized on the transfer of our Ordinary
Shares