Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 11

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 11
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 treaties and file relevant report with the tax authorities. Therefore, if the relevant tax authorities
determine that our transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment rather than substantive
business activities, then we will not qualify as a “beneficial owner”, and the relevant tax authorities may adjust the favorable
withholding tax in the future. Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends received
by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our
PRC subsidiaries. For more details, see “ Item 3 Key Information - D. Risk Factors - Risks Related to Doing Business in China - We
may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may
have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our
ability to conduct our business.”

As of the date of this annual
report, no dividends or distributions have been made to date between the holding company, XChange TEC. INC, its subsidiaries, and the consolidated
VIE, or to investors, including the U. S. investors (i. e., there have not been any dividends or distributions that a subsidiary or consolidated
VIE have made to the holding company, XChange TEC. INC, or to investors, including U. S. investors). The holding company, XChange TEC. INC,
its subsidiaries, and the consolidated VIE do not have any plans to distribute earnings or dividends or settle amounts owed under the
Contractual Arrangements in the foreseeable future.

To the extent cash and/or
assets in the business are in the PRC and/or Hong Kong or our PRC and/or Hong Kong entities, such funds and/or assets may not be available
to fund operations or for other use outside of the PRC and/or Hong Kong due to interventions in or the imposition of restrictions and
limitations on the ability of us or our subsidiaries by the PRC government to transfer cash and/or assets. The cash transfer among the
holding company, XChange TEC. INC, its subsidiaries and the consolidated VIE is typically transferred through payment for intercompany
services or intercompany borrowings between the holding company, XChange TEC. INC, its subsidiaries and the consolidated VIE. There are
no tax consequences for intercompany borrowings or the