Company: RETO
Filing Date: 2025-07-31
Form Type: F-3
Source: 0001213900-25-070052
Chunk: 21

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-07-31
Form: F-3
Chunk 21
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 a dividend, to the
extent paid out of our current or accumulated earnings and profits, as determined under United States federal income tax principles. Any
proposed dividend would be subject to ReTo’s M&A and the Act; specifically, ReTo may only pay a dividend if ReTo’s directors
are satisfied, on reasonable grounds, that, immediately after the dividend is paid, the value of its assets will exceed its liabilities
and it will be able to pay its debts as they fall due.

The PRC Enterprise Income
Tax Law (the “EIT Law”) and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to
dividends payable by PRC 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 in respect to the payment
of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10%. However, if the relevant
tax authorities determine that our transactions or arrangements are for the primary purpose of enjoying a 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.

We maintain bank accounts
in China, including cash in Renminbi in the amount of approximately RMB1.6 million and cash in USD in the amount of approximately US$0.5
million as of December 31, 2024. Funds are transferred between ReTo and its subsidiaries for their daily operation purposes. The transfer
of funds between our PRC subsidiaries are subject to the Provisions of the Supreme People’s Court on Several Issues Concerning the
Application of Law in the Trial of Private Lending Cases (2020 Second Revision, the “Provisions on Private Lending Cases”),
which was implemented on January 1, 2021 to regulate the financing activities between natural persons, legal persons and unincorporated
organizations. The Provisions on Private Lending Cases set forth that private lending contracts will be upheld as invalid under the circumstance
that (i)