Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 156

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 10
Chunk 156
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 deduct the PRC tax in computing such U. S. Holder’s federal taxable income for U. S.
federal income tax purposes. The rules with respect to foreign tax credits are complex and involve the application of rules that depend
on a U. S. Holder’s particular circumstances. 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. Accordingly, U. S. Holders are urged to consult their tax advisors
regarding the availability of the foreign tax credit or the deductibility of foreign taxes under their particular circumstances.

U. S. Holders that receive distributions of additional
ADSs or Class A ordinary shares or rights to subscribe for ADSs or Class A ordinary shares as part of a pro rata distribution to all our
shareholders generally will not be subject to U. S. federal income tax in respect of the distributions.

Taxation of Dispositions of ADSs or Class A Ordinary Shares

Subject to the discussion below under “ - Passive
Foreign Investment Company Considerations,” upon a sale, exchange or other taxable disposition of the ADSs or Class A ordinary shares,
U. S. Holders will realize gain or loss for U. S. federal income tax purposes in the amount equal to the difference between the amount realized
on the disposition and the U. S. Holder’s adjusted tax basis in the ADSs or Class A ordinary shares. Such gain or loss will be capital
gain or loss and generally will be long-term capital gain or loss if the ADS or Class A ordinary shares have been held for more than one
year. Long-term capital gain realized by a non-corporate U. S. Holder generally is subject to taxation at a preferential rate. The deductibility
of capital losses is subject to limitations.

A U. S. Holder generally will not be entitled to
credit any PRC tax imposed on the sale or other disposition of the ADSs or Class A ordinary shares against such U. S. Holder’s U. S.
federal income tax liability, except in the case of either (i) a U. S. Holder that is eligible for, and properly elects to claim, the benefits
of the Treaty, or (ii) a U. S. Holder that consistently elects to apply a modified version of the U. S. foreign tax credit rules that is
permitted