Company: QSJC
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001683168-25-001892
Chunk: 29

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1
Chunk 29
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 “substance over form” principle, 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 pays 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. Both the transferor and the transferee may be subject to penalties under PRC tax laws if
the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

 17 

We face uncertainties as to the reporting and
other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring. We may
be subject to filing obligations or taxed if we are the transferor in such transactions, and may be subject to withholding obligations
if we are the transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in us by investors
who are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin
37. As a result, the Company may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request
the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that the Company should
not be taxed under these circulars, which may have a material adverse effect on the Company’s financial condition and results of
operations.

The approval of the China Securities Regulatory
Commission may be required in connection with the Contribution transaction under PRC law.

The M&A Rules requires an overseas special
purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals
to obtain the approval of the CSRC, prior to the listing and trading of such special purpose vehicle’s securities on an overseas
stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings
by special purpose vehicles. However, the interpretation and application of the regulations remain unclear, and the Contribution transaction
may ultimately require approval from the CSRC. If CSRC approval is required, it is uncertain whether it would be possible