Company: CAAS
Filing Date: 2025-08-04
Form Type: 424B3
Source: 0001104659-25-073486
Chunk: 91

Company: China Automotive Systems, Inc.
Filing Date: 2025-08-04
Form: 424B3
Chunk 91
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 no actual relationship between the relevant income derived in China and the established
institutions or premises set up by them, withholding income tax is set at the rate of 10% with respect to their income sourced from inside
the PRC.

Value-Added Tax

The PRC Provisional Regulations on Value-Added
Tax were promulgated by the State Council on December 13, 1993, became effective on January 1, 1994, and were subsequently
amended from time to time. The Detailed Rules for the Implementation of the PRC Provisional Regulations on Value-Added Tax (2011
Revision) were promulgated by the Ministry of Finance on December 25, 1993, and subsequently amended in 2008 and 2011. On November 19,
2017, the State Council promulgated the Decisions on Abolishing the PRC Provisional Regulations on Business Tax and Amending the PRC
Provisional Regulations on Value-Added Tax. Pursuant to these regulations, rules and decisions, all enterprises and individuals
engaged in the sale of goods, provision of processing, repair, and replacement services, sales of services, intangible assets, real property,
and the importation of goods within the PRC are value-added tax, or VAT, taxpayers. On March 20, 2019, the Ministry of Finance,
the SAT, and the General Administration of Customs jointly issued the Announcement on Relevant Policies on Deepening the Reform of Value-Added
Tax. Pursuant to this announcement, the generally applicable VAT rates are simplified as 13%, 9%, 6%, and 0%, which became effective
on April 1, 2019, and the VAT rate applicable to small-scale taxpayers is 3%. If a small-scale taxpayer’s total monthly sales
amount does not exceed RMB100 thousand and its quarterly sales volume does not exceed RMB300 thousand, the VAT will be exempted.

Dividend Withholding Tax

The EIT Law and its implementation rules provide
that since January 1, 2008, an income tax withholding rate of 10% will normally apply to dividends declared to non-PRC resident
investors that do not have an establishment or place of business in China, or that have such establishment or place of business but the
relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from
sources within China.

Pursuant to the Arrangement Between