Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 417

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 417
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 series of capital control
measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas
acquisitions, dividend payments, and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and
our PRC subsidiaries’ dividend payments and other distributions may be subject to tightened scrutiny in the future. The PRC government
also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, King
Eagle (China) and our VIE may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign
currency for the payment of dividends from their profits, if any. Furthermore, if our PRC subsidiaries incur debt on their own in the
future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. See “Item 1A. Risk
Factors - Risks Related to Our Business - We will rely on dividends and other distributions on equity paid by our subsidiaries to fund
our cash and financing requirements, and any limitation on the ability of our subsidiaries to make payments to us could have a material
adverse effect on our ability to conduct our business” on page 51.

    ● 
    In
    addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable
    to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the
    PRC central government and the governments of other countries or regions where the non-PRC resident enterprises are tax resident.
    Pursuant to the tax agreement between Mainland China and the Hong Kong Special Administrative Region, the withholding tax rate with
    respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from the standard rate of
    10%. However, if the relevant tax authorities determine that our transactions or arrangements are for the primary purpose of enjoying
    favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future. Accordingly, there
    is no assurance that the reduced 5% withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries.
    This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries. See “Item 1A. Risk Factors
    - Risks Related to Doing Business in China - Under