Company: NCL
Filing Date: 2025-11-14
Form Type: 424B3
Source: 0001575872-25-000688
Chunk: 51

Company: Northann Corp.
Filing Date: 2025-11-14
Form: 424B3
Chunk 51
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 enterprise transfers PRC taxable assets indirectly by disposing of the equity interests of an
overseas holding company, which is an indirect transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity
that directly owns the taxable assets, may report such indirect transfer to the relevant tax authority and the PRC tax authority may disregard
the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing,
avoiding, or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and
the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a
rate of 10% for the transfer of equity interests in a PRC resident enterprise.

| 24 |

According to SAT Circular
37, where the non-resident enterprise fails to declare the tax payable pursuant to Article 39 of the EIT Law, the tax authority may order
it to pay the tax due within the required time limits, and the non-resident enterprise shall declare and pay the tax payable within such
time limits specified by the tax authority. If the non-resident enterprise, however, voluntarily declares and pays the tax payable before
the tax authority orders it to do so within the required time limits, it shall be deemed that such enterprise has paid the tax in time.

We face uncertainties
as to the reporting and assessment of reasonable commercial purposes and future transactions where PRC taxable assets are involved, such
as offshore restructuring, selling shares of our offshore subsidiaries, and investments. In the event of being assessed as having no reasonable
commercial purposes in an indirect transfer transaction, we may be subject to filing obligations or taxed if we are a transferor in such
transactions, and may be subject to withholding obligations (to be specific, a 10% withholding tax for the transfer of equity interests)
if we are a transferee in such transactions, under SAT Circular 7 and SAT Circular 37. Our PRC subsidiary may be requested to assist in
the filing under the SAT circulars for share transfer by investors who are non-PRC resident enterprises. As a result, we may be required
to expend valuable resources to comply with the SAT circulars or to request the relevant transferors from whom we purchase taxable assets
to comply with these circulars, or to establish that we should not be taxed under these circulars, which may have a material