Company: CAAS
Filing Date: 2025-08-04
Form Type: 424B3
Source: 0001104659-25-073486
Chunk: 90

Company: China Automotive Systems, Inc.
Filing Date: 2025-08-04
Form: 424B3
Chunk 90
---
 the PRC opened by the PRC agents before distribution to such
PRC residents.

Regulations on Dividend Distributions

The principal laws and regulations regulating
the distribution of dividends by FIEs in China include the PRC Company Law, as amended in 2004, 2005, 2013, 2018 and 2024, and the 2019
PRC Foreign Investment Law and its Implementation Rules. Under the current regulatory regime in China, FIEs in China may pay dividends
only out of their retained earnings, if any, determined in accordance with PRC accounting standards and regulations. A PRC company is
required to set aside as statutory reserve funds at least 10% of its after-tax profit, until the cumulative amount of such
reserve funds reaches 50% of its registered capital unless laws regarding foreign investment provide otherwise. A PRC company cannot
distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed
together with distributable profits from the current fiscal year.

<div align='center'>51</div>

Regulations on Taxation

Enterprise Income Tax

On March 16, 2007, the National People’s
Congress promulgated the PRC EIT Law, which was amended on February 24, 2017, and December 29, 2018. On December 6, 2007,
the State Council enacted the Regulations for the Implementation of the EIT Law, which became effective on January 1, 2008 and was
amended on April 23, 2019. Under the EIT Law and the relevant implementing regulations, both resident enterprises and non-resident enterprises
are subject to tax in China. Resident enterprises are defined as enterprises that are established in China in accordance with PRC laws,
or that are established in accordance with the laws of foreign countries but are actually or in effect controlled from within China. Non-resident enterprises
are defined as enterprises that are organized under the laws of foreign countries and whose actual management is conducted outside China,
but have established institutions or premises in China, or have no such established institutions or premises but have income generated
from inside China. Under the EIT Law and relevant implementing regulations, a uniform corporate income tax rate of 25% is applied. However,
if non-resident enterprises have not formed permanent establishments or premises in China, or if they have formed permanent
establishments or premises in China but there is