Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 691

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1A
Chunk 691
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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.

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, sale of the shares in our offshore subsidiaries and investments. Our company may be subject to filing
obligations or may be taxed if our company is transferor in such transactions and may be subject to withholding obligations if our company
is transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37. For transfers of shares of our company 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, we 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 our company should not
be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

PRC
regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders
to penalties and limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute
profits to us, or otherwise adversely affect us.

The
SAFE promulgated the notice on relevant issues relating to domestic resident’s investment and financing and roundtrip investment
through special purpose vehicles (“SPV(s)”), or Notice 37, in July 2014 that requires PRC residents or entities to register
with SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of
overseas investment or financing. In addition, such PRC residents or entities must update their SAFE registrations when the offshore
SPV undergoes material events relating to material change of capitalization or structure of the PRC resident itself (such as capital
increase, capital reduction, share transfer or exchange, merger or spin off).On February 28, 2015, SAFE issued a notice according to
which the aforesaid PRC residents or entities are no longer required to register with SAFE or its local branch, instead the aforesaid
PRC residents or entities need to register with local banks. We have notified substantial