Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 57

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 57
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 face uncertainties regarding
the reporting on and consequences of previous private equity financing transactions involving the transfer and exchange of shares in our
company by non-resident investors. In February 2015, the SAT issued the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers
of Assets by Non PRC Resident Enterprises, or Bulletin 7. Pursuant to Bulletin 7, an “indirect transfer” of PRC assets, including
a transfer of equity interests in an unlisted non-PRC holding company of a PRC resident enterprise, by non-PRC resident enterprises may
be re-characterized and treated as a direct transfer of the underlying PRC assets, if such arrangement does not have a reasonable commercial
purpose and was established for the purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect
transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated
to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Bulletin
7 also introduced safe harbors for internal group restructurings and the purchase and sale of equity securities through a public securities
market. On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding
of Non-resident Enterprise Income Tax at Source, or Bulletin 37, which came into effect on December 1, 2017. The Bulletin 37 further clarifies
the practice and procedure of the withholding of nonresident enterprise income tax.

We face uncertainties on the
reporting and consequences of future private equity financing transactions, share exchanges or other transactions involving the transfer
of shares in our company by investors that are non-PRC resident enterprises. The PRC tax authorities may pursue such non-resident enterprises
with respect to a filing or the transferees with respect to withholding obligation, and request our PRC Operating Entities to assist in
the filing. As a result, we and non-resident enterprises in such transactions may become at risk of being subject to filing obligations
or being taxed under Bulletin 7 and Bulletin 37, and may be required to expend valuable resources to comply with them or to establish
that we and our non-resident enterprises should not be taxed under these regulations, which may have a material adverse effect on our
financial condition and results of operations.

PRC regulation