Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 181

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 10
Chunk 181
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 increase our tax burden and materially and adversely affect our cash flow and profitability.

We do not believe that we
meet all of the conditions required for PRC resident enterprise. The Company is a company incorporated outside the PRC. As a holding company,
its key assets are its ownership interests in its subsidiaries, and its key assets are located, and its records (including the resolutions
of its Board and the resolutions of its shareholders) are maintained, outside the PRC. For the same reasons, we believe our other entities
outside of China are not PRC resident enterprises either. However, the tax resident status of an enterprise is subject to determination
by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body”.
There can be no assurance that the PRC government will ultimately take a view that is consistent with ours.

However, if the PRC tax authorities
determine that we are a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax
from dividends we pay to our shareholders that are non-resident enterprises. Such a 10% tax rate could be reduced by applicable tax treaties
or similar arrangements between China and the jurisdiction of our shareholders. For example, for shareholders eligible for the benefits
of the tax treaty between China and Hong Kong, the tax rate is reduced to 5% for dividends if relevant conditions are met. In addition,
non-resident enterprise shareholders may be subject to a 10% PRC tax on gains realized on the sale or other disposition of ordinary shares,
if such income is treated as sourced from within the PRC.

It is unclear whether our
non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders
in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to such dividends or gains, it would generally
apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether non-PRC
shareholders of the Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC
in the event that the Company is treated as a PRC resident enterprise.

Provided that our Cayman Islands
holding company, we, are not deemed to be a PRC resident enterprise, our shareholders who are not PRC residents will not be subject