Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 198

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 198
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 exchange controls.

Regulations Relating to Tax in the PRC

Enterprise Income Tax

According to the Enterprise
Income Tax Law promulgated by the National People’s Congress in March 2007 and amended in February 2017 and December 2018,
and the Implementation Rules of the Enterprise Income Tax Law of the PRC promulgated by the State Council in December 2007
and amended in April 2019, other than a few exceptions, the income tax rate for both domestic enterprises and foreign-invested enterprises
is 25%. Enterprises are classified as either “resident enterprises” or “non-resident enterprises”. Besides enterprises
established within the PRC, enterprises established outside China whose “de facto management bodies” are located in China
are considered “resident enterprises” and subject to the uniform 25% enterprise income tax rate for their global income.
A non-resident enterprise refers to an entity established under foreign law whose “de facto management bodies” are not within
the PRC but which have an establishment or place of business in the PRC, or which do not have an establishment or place of business in
the PRC but have income sourced within the PRC. An income tax rate of 10% will normally be applicable to dividends declared to non-PRC
resident enterprise investors that do not have an establishment or place of business in the PRC, or that have such establishment or place
of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends
are derived from sources within the PRC.

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In 2009, the State Administration
of Taxation, or the SAT, issued the Circular of the State Administration of Taxation on Issues Relating to Identification of PRC-Controlled
Overseas Registered Enterprises as Resident Enterprises in accordance with the De Facto Standards of Organizational Management, or SAT
Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled
enterprise that is incorporated offshore is located in China. Although this circular only applies to offshore enterprises controlled
by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in SAT Circular
82 may reflect the SAT’s general position on how the “de facto management body” text should be applied in determining
the tax resident status of all offshore enterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by
a