Company: LHI
Filing Date: 2025-02-14
Form Type: DRS/A
Source: 0001213900-25-014190
Chunk: 215

Company: Living Homeopathy International Ltd.
Filing Date: 2025-02-14
Form: DRS/A
Chunk 215
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 unless such instrument of transfer is executed within the Cayman Islands.

The Cayman Islands enacted the International Tax Co-operation (Economic Substance) Act (Revised) together with the Guidance Notes published by the Cayman Islands Tax Information Authority from time to time. The Company is required to comply with the economic substance requirements from July 1, 2019 and make an annual report in the Cayman Islands as to whether or not it is carrying on any relevant activities and if it is, it must satisfy an economic substance test.

Hong Kong Profits Taxation

Living Homeopathy’s subsidiary, Living Homeopathy Hong Kong, is a Hong Kong entity subject to the two-tier profit tax rates system according to Hong Kong tax rules and regulations .

The two-tier profits tax rates system was introduced
under the Inland Revenue (Amendment) (No.3) Ordinance 2018 (the “Ordinance”) of Hong Kong became effective for the assessment
year 2018/2019. Under the two-tier profit tax rates regime, the profits tax rate for the first HKD2 million ($254,780) of assessable profits
of a corporation will be subject to the lowered tax rate, 8.25% while the remaining assessable profits will be subject to the legacy tax
rate, 16.5%. The Ordinance only allows one entity within a group of “connected entities” is eligible for the two-tier tax
rate benefit. An entity is a connected entity of another entity if (1) one of them has control over the other; (2) both of them are under
the control (more than 50% of the issued share capital) of the same entity; (3) in the case of the first entity being a natural person
carrying on a sole proprietorship business-the other entity is the same person carrying on another sole proprietorship business. Under
the Ordinance, it is an entity’s election to nominate an entity that will be subject to the two-tier profits tax rate on its Profits
Tax Return. The election is irrevocable.

Living Homeopathy elected the two-tier profits
tax rate for its tax years of 2021/2022, 2022/2023 and 2023/24.

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United States Federal Income Taxation Considerations

The following does not address the tax consequences to any particular investor or to person in special tax situations such as:

| ● | banks; |

| ● | financial institutions