Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 56

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 56
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 of dividends). Any PRC income tax liability may be reduced under applicable tax treaties. However,
it is unclear whether in practice non-PRC shareholders of SunCar 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. Any such tax may reduce the returns
on your investment in the ordinary shares.

Failure to obtain any preferential tax treatments
or the discontinuation, reduction or delay of any of the preferential tax treatments that may be available to us in the future could materially
and adversely affect our business, financial condition and results of operations.

Under the EIT Law effective
from January 1, 2008, as amended in February 2017, domestic companies are subject to a unified income tax rate of 25%. Various favorable
income tax rates are, however, available to qualified enterprises in certain encouraged sectors of the economy. Enterprises qualified
as “new high-tech enterprise” are entitled to a preferential tax rate of 15%. Accreditation of the “new high-tech enterprise”
status is valid for three years. Shengshi Dalian Automobile, and Shanghai Chengle Network Technology Co., Limited, both key subsidiaries
of SunCar, each qualified as a “new high-tech enterprise” and was entitled to a preferential tax rate of 15% from 2018 through
2021, and successfully renewed the qualification in December 2021, which will be effective for another 3 years.

Qualification as a “new
high-tech enterprise” is subject to review by relevant authorities in China every three years, and we cannot assure you that we
will be able to continue to qualify for preferential tax treatment. For illustration purposes only, the tax benefit we had as a result
of such preferential tax treatment, calculated as the difference between our actual income tax expenses and the amount of tax expenses
we would have incurred had we not been entitled to the reduced corporate tax rate during the same period. In the unlikely event of a failure
to renew the “new high-tech enterprise” status after its expiration, we will be subject to the unified corporate income tax
rate of 25% starting from the year of expiration and will thus incur increased income tax, which may have a material adverse effect on
our net income and results of operations.

We face uncertainties with respect to indirect
transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.

We