Company: JWEL
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041556
Chunk: 46

Company: Jowell Global Ltd.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 4
Chunk 46
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 income derived has no actual connection with such organization or establishment, it will be subject to a withholding
tax on its PRC-sourced income at a rate of 10%. 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, the withholding tax rate in respect to the payment of dividends
by a PRC enterprise to a Hong Kong enterprise is reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly
holds at least 25% of the PRC enterprise. Pursuant to the Notice of the State Administration of Taxation on the Issues concerning the
Application of the Dividend Clauses of Tax Agreements, or Circular 81, a Hong Kong resident enterprise must meet the following conditions,
among others, in order to enjoy the reduced withholding tax: (i) it must directly own the required percentage of equity interests
and voting rights in the PRC resident enterprise; and (ii) it must have directly owned such percentage in the PRC resident enterprise
throughout the 12 months prior to receiving the dividends. There are also other conditions for enjoying the reduced withholding tax
rate according to other relevant tax rules and regulations. We believe our corporate structure has made us eligible for such reduced rate
once we become a resident enterprise in Hong Kong. The qualification of HK resident enterprise focuses on de facto management. As of the
date of this report, we do not have a management team in Hong Kong and would most likely not be considered a HK resident enterprise and
therefore would not be eligible for the reduced 5% withholding tax rate.

Regulations on Enterprise Income Tax

PRC enterprise income tax is calculated based
on taxable income, which is determined under (i) the PRC Enterprise Income Tax Law, or the EIT Law, promulgated by the NPC and implemented
in January 2008 and amended in March 2017 and December 2018, respectively, and (ii) the implementation rules to the EIT Law promulgated
by the State Council and most recently revised in April 2019. The EIT Law imposes a uniform enterprise income tax rate of 25% on all resident
enterprises in the PRC, including foreign-invested enterprises and domestic enterprises, unless they qualify for certain exceptions.

In addition, according to the EIT Law and its
implementation rules, enterprises registered in countries or regions outside the PRC with “de