Company: RAYA
Filing Date: 2025-08-01
Form Type: 424B5
Source: 0001213900-25-070321
Chunk: 113

Company: Erayak Power Solution Group Inc.
Filing Date: 2025-08-01
Form: 424B5
Chunk 113
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jiang Leiya and Wenzhou New Forcus, to Erayak WFOE, from Erayak WFOE to Erayak HK, from Erayak HK to Erayak BVI, and finally from Erayak BVI to Erayak. Certain payments from our PRC subsidiaries to Erayak HK are subject to PRC taxes, including business taxes and VAT. As of the date of this prospectus, except for the transfers and loans made by Zhejiang Leiya and Erayak WFOE on behalf of the holding company to fulfill certain maintenance requirements in Cayman Islands and legal expenses relating to this offering, our PRC subsidiaries have not made any other transfers, loans, or distributions.

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Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiary to its immediate holding company, Erayak HK. As of the date of this prospectus, Erayak WFOE currently does not have any plan to declare and pay dividends to Erayak HK and we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Erayak HK intends to apply for the tax resident certificate when Erayak WFOE plans to declare and pay dividends to Erayak HK.