Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 163

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 10
Chunk 163
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 PRC-controlled enterprise that is incorporated offshore is located in China.
Although this circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled
by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT’s general position on how the “de
facto management body” test should be applied in determining the tax resident status of all offshore enterprises. According to SAT
Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC
tax resident by virtue of having its “de facto management body” in the PRC only if all of the following conditions are met:
(i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s
financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s
primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC;
and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.

Further to SAT Circular 82,
the SAT issued the SAT Bulletin 45, which took effect in September 2011, to provide more guidance on the implementation of SAT
Circular 82. SAT Bulletin 45 provides for procedures and administration details of determination on resident status and administration
on post-determination matters. Although SAT Circular 82 and SAT Bulletin 45 only apply to offshore incorporated enterprises controlled
by PRC enterprises or PRC enterprise groups and not those controlled by PRC individuals or foreigners, and we are not controlled by a
PRC enterprise or PRC enterprise group, the determination criteria set forth therein may reflect the SAT’s general position on how
the term “de facto management body” could be applied in determining the tax resident status of offshore enterprises, regardless
of whether they are controlled by PRC enterprises, individuals or foreigners.

In addition, our Company is
a company incorporated outside the PRC. As a holding company, its sole assets are share ownerships of its direct subsidiaries incorporated
in Hong Kong, the Cayman Islands and the United States, and its key assets are located, and its records (including the resolutions of
its board of directors and the resolutions of its shareholders) are maintained, outside the PRC. As such, we do not believe that
our Company meets