Company: NOAH
Filing Date: 2025-04-24
Form Type: 20-F
Source: 0001410578-25-000852
Chunk: 146

Company: NOAH HOLDINGS LTD
Filing Date: 2025-04-24
Form: 20-F
Item: Item 4
Chunk 146
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2024, the Standing Committee of the National People’s Congress of China promulgated the Value-added Tax Law, which will take effect on January 1, 2026. The Value-added Tax Law consolidates China’s VAT system into a unified legal framework, maintaining the current three-tier VAT rates (13%, 9%, and 6%) while introducing key reforms to enhance compliance and adapt to economic needs, and also clarifies small-scale taxpayer thresholds (annual sales under RMB 5 million) and modernizes administration by promoting e-invoices and allowing residence-based tax filings. These changes aim to balance tax neutrality with anti-avoidance measures, reflecting China’s commitment to aligning its fiscal system with OECD consumption tax principles. Specifically, Value-added Tax Law provides that financial products are subject to VAT where they are domestically issued or sold by domestic entities, which clarifies the tax jurisdiction over overseas financial products and related business, requiring cross-border financial transactions to reassess their tax obligations.
Dividend Withholding Tax
Pursuant to the EIT Law and the EIT Implementation Rules, dividends generated after January 1, 2008 and payable by a foreign-invested enterprise in mainland China to its foreign investors are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with mainland China that provides for a different withholding arrangement. We are a Cayman Islands holding company and the majority of our income may come from dividends we receive from our mainland China subsidiaries directly or indirectly. Since there is no such tax treaty between mainland China and the Cayman Islands, dividends we receive from our mainland China subsidiaries will generally be subject to a 10% withholding tax.
Pursuant to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Tax Arrangement, where a Hong Kong resident enterprise which is considered a non-mainland China tax resident enterprise directly holds at least 25% equity interests in a mainland China enterprise, the withholding tax rate in respect of the payment of dividends by such mainland China enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority. Pursuant to the Notice of the SAT on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, or SAT Circular 81, issued on February 20, 2009, a resident enterprise of the counter-party to