Company: ZDAN
Filing Date: 2025-07-28
Form Type: F-1/A
Source: 0001683168-25-005450
Chunk: 251

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-07-28
Form: F-1/A
Chunk 251
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 Enterprises, or “Circular
7,” which was promulgated by the SAT and became effective on February 3, 2015, if a non-resident enterprise transfers the equity
interests of a PRC resident enterprise indirectly by transfer of the equity interests of an offshore holding company (other than a purchase
and sale of shares issued by a PRC resident enterprise in the public securities market) without a reasonable commercial purpose, the non-resident
enterprise, being the transferor or the transferee or the PRC entity which directly owns such taxable assets, may report to the relevant
tax authority such indirect transfer, and PRC tax authorities have the power to reassess the nature of the transaction and the indirect
equity transfer may be treated as a direct transfer. As a result, the gain derived from such indirect transfer, may be subject to PRC
enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable
taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.

| 155 |

Under the terms of Circular
7, a transfer which meets all of the following circumstances shall be directly deemed as having no reasonable commercial purposes if:

| · | over 75% of the value of the equity interests of the offshore holding                                                              
 company are directly or indirectly derived from PRC taxable properties;                                                            |
| · | at any time during the year before the indirect transfer, over 90%                                                                 
 of the total properties of the offshore holding company are investments within PRC territories, or in the year before the indirect 
 transfer, over 90% of the offshore holding company’s revenues is directly or indirectly derived from PRC territories;              |
| · | the function performed and risks assumed by the offshore holding company                                                           
 are insufficient to substantiate its corporate existence; or                                                                       |
| · | the foreign income tax imposed on the indirect transfer is lower than                                                              
 the PRC tax imposed on the direct transfer of the PRC taxable properties.                                                          |

On October 17, 2017,
the SAT issued the Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or “Circular
37,” which took effect on December 1, 2017. Circular 37 purports to provide further clarifications by setting forth the definitions
of equity transfer income and tax basis, the foreign exchange rate to be used in the calculation of the withholding