Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 157

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 10
Chunk 157
---
 on dividends we pay to our
investors that are non-resident enterprises so long as such non-resident enterprise investors do not have an establishment or place of
business in China or, despite the existence of such establishment of place of business in China, the relevant income is not effectively
connected with such establishment or place of business in China, to the extent that such dividends have their sources within the PRC.
Similarly, any gain realized on the transfer of our shares by such investors is also subject to a ten percent (10%) PRC income tax if
such gain is regarded as income derived from sources within China. In such event, we may be required to withhold a ten percent (10%) PRC
tax on any dividends paid to our investors that are non-resident enterprises. Our investors that are non-resident enterprises also may
be responsible for paying PRC tax at a rate of ten percent (10%) on any gain realized from the sale or transfer of our common shares in
certain circumstances. We would not, however, have an obligation to withhold PRC tax with respect to such gain.

Moreover,
the State Administration of Taxation issued the Notice on Strengthening the Administration of Enterprise Income Tax on Share Transfer
Income of Non-Resident Enterprises No. 698(“ Circular 698”) on December 10, 2009, which reinforces taxation on transfer
of non-listed shares by non-resident enterprises through overseas holding vehicles. Circular 698 applies retroactively and was deemed
to be effective as of January 2008. Pursuant to Circular 698, where (i) a foreign investor who indirectly holds equity interest in a PRC
resident enterprise through an offshore holding company indirectly transfers equity interests in a PRC resident enterprise by selling
the shares of the offshore holding company, and (ii) the offshore holding company is located in a jurisdiction where the effective tax
rate is lower than twelve and a half percent (12.5%) or where the offshore income of its residents is not taxable, the foreign investor
is required to provide the tax authority in charge of that PRC resident enterprise with certain relevant information within thirty (30)
days of the transfer. The tax authorities in charge will evaluate the offshore transaction for tax purposes. In the event that the tax
authorities determine that such transfer is abusing forms of business organization and there is no reasonable commercial purpose other
than avoidance of PRC enterprise income tax, the tax authorities will have the power to conduct a substance-over-form re-ass