Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 105

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 4
Chunk 105
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 matters in connection with their exercise of stock options, purchase and sale
of corresponding stocks or interests, and fund transfer. The PRC agent shall, among other things, file on behalf of such PRC resident
participants an application with SAFE to conduct the SAFE registration with respect to such stock incentive plan and obtain approval
for an annual allowance with respect to the purchase of foreign exchange in connection with the exercise or sale of stock options or
stock such participants hold. In addition, the PRC agent is required to amend the SAFE registration with respect to the stock incentive
plan if there is any material change to the stock incentive plan, the PRC agent or the overseas entrusted institution or other material
aspects. Such participating PRC residents’ foreign exchange income received from the sale of stock and dividends distributed by
the overseas publicly-listed company must be fully remitted into a PRC collective foreign currency account opened and managed by the
PRC agent before distribution to such participants. We and our PRC resident employees who have been granted stock options or other share-based
incentives of our company are subject to the Circular 7 as our company is an overseas listed company. If we or our PRC resident participants
fail to comply with these regulations in the future, we and/or our PRC resident participants may be subject to fines and legal sanctions.

Regulations relating to Tax

Enterprise Income Tax

On March 16, 2007, the NPC promulgated the Law
of the PRC on Enterprise Income Tax which was amended on February 24, 2017 and December 29, 2018, and on December 6, 2007, the State
Council enacted the Regulations for the Implementation of the Law on Enterprise Income Tax, or collectively, the EIT Law. The EIT Law
came into effect on January 1, 2008. According to the EIT Law, taxpayers consist of resident enterprises and Non-Resident Enterprises.
Resident enterprises are defined as enterprises that are established in China in accordance with PRC laws, or that are established in
accordance with the laws of foreign countries but whose actual or de facto control is administered from within the PRC. Non-Resident
Enterprises are defined as enterprises that are set up in accordance with the laws of foreign countries and whose actual administration
is conducted outside the PRC, but have established institutions or premises in the PRC, or have no such established institutions or premises
but have income generated from inside the P