Company: NOAH
Filing Date: 2025-04-24
Form Type: 20-F
Source: 0001410578-25-000852
Chunk: 40

Company: NOAH HOLDINGS LTD
Filing Date: 2025-04-24
Form: 20-F
Item: Item 3
Chunk 40
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 the Stock Incentive Plan Rule, and any failure to comply could subject us to fines and other legal sanctions.

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The dividends we receive from our mainland China subsidiaries may be subject to mainland China tax under the PRC Enterprise Income Tax Law, which would have a material adverse effect on our financial condition and results of operations. In addition, if we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders. 
Pursuant to the PRC Enterprise Income Tax Law, or the EIT Law, dividends generated and payable by a foreign-invested enterprise in mainland China to its foreign investors are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with mainland China that provides for a different withholding arrangement. We are a Cayman Islands holding company and the majority of our income may come from dividends we receive, directly or indirectly, from our wholly foreign-owned mainland China subsidiaries. Since there is currently no such tax treaty between mainland China and the Cayman Islands, dividends we directly receive from our wholly foreign-owned mainland China subsidiaries will generally be subject to a 10% withholding tax.
In addition, under the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, where a Hong Kong resident enterprise, which is considered a non-mainland China tax resident enterprise, directly holds at least 25% of the equity interests in a mainland China enterprise, the withholding tax rate in respect to the payment of dividends by such mainland China enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority. Accordingly, our Hong Kong subsidiaries, such as Noah Insurance (Hong Kong) Limited, which we refer to as Noah Insurance, are able to enjoy the 5% withholding tax rate for the dividends they receive from their mainland China subsidiaries in which they hold a more than 25% of the equity interests if they satisfy the conditions prescribed in relevant tax rules and regulations and obtain the approvals as required. However, if Noah Insurance is considered to be a non-beneficial owner for purposes of the tax arrangement, any dividends paid to it by our wholly foreign-owned mainland China subsidiaries directly would not qualify for the preferential dividend withholding tax rate of 5%, but rather would be