Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 150

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 10
Chunk 150
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 overall management
of the business, productions, personnel, accounts and properties of an enterprise. In April 2009, the State Administration of Taxation
issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the “de facto management
body” of a PRC controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to offshore
enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria
set forth in the circular may reflect the State Administration of Taxation’s general position on how the “de facto management
body” test should be applied in determining the tax resident status of all offshore enterprises. According to Circular 82, an offshore
incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having
its “de facto management body” in China only if all of the following conditions are met: (i) the primary location of the day
to day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are
made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books
and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting
board members or senior executives habitually reside in the PRC.

We do not believe that XChange TEC. INC meets all
of the conditions above. XChange TEC. INC is a company incorporated outside the PRC. As a holding company, its key assets are its ownership
interests in its subsidiaries, and its key assets are located, and its records (including the resolutions of its board of directors and
the resolutions of its shareholders) are maintained, outside the PRC. For the same reasons, we believe our other entities outside of China
are not PRC resident enterprises either. However, the tax resident status of an enterprise is subject to determination by the PRC tax
authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.” There can
be no assurance that the PRC government will ultimately take a view that is consistent with ours.

However, if the PRC tax authorities determine
that XChange TEC. INC is a PRC resident enterprise for enterprise income tax purposes,