Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 164

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 10
Chunk 164
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 all of the conditions above or is a PRC resident enterprise for PRC tax purposes. However, the tax resident status of
an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the
term “de facto management body.” There can be no assurance that the PRC government will ultimately take a view that is consistent
with us.

If the PRC tax authorities
determine that our Cayman Islands holding company or any of our subsidiaries outside of China is a PRC resident enterprise for PRC enterprise
income tax purposes, a number of unfavorable PRC tax consequences could follow. For example, first, a 25% PRC enterprise income tax would
be imposed on our worldwide income. Second, a 10% withholding tax would be imposed on dividends we pay to our non-PRC enterprise
shareholders. In addition, non-resident enterprise shareholders may be subject to PRC tax on gains realized on the sale or other
disposition of Class A Ordinary Shares, as if such income is treated as sourced from within the PRC. Furthermore, if we are deemed
a PRC resident enterprise, dividends paid to our non-PRC individual shareholders and any gain realized on the transfer of ordinary
shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by
us).

If we are considered a “non-resident enterprise”
by the PRC tax authorities, the dividends we receive from our PRC subsidiaries will be subject to a 10% withholding tax. The EIT Law also
imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise to its immediate holding company outside
of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within
China or if the received dividends have no connection with the establishment or place of such immediate holding company within China,
unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different
withholding arrangement.

These rates may be reduced
by an applicable tax treaty, but it is unclear whether in practice non-PRC shareholders of our Company would be able to obtain the
benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise.
See “ Risk Factors - Risks Related to Doing Business in China and Hong Kong -