Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 139

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 139
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 tax on gains realized during
that year on the sale or disposal of such ordinary shares. The Cayman Islands does not impose a withholding tax on dividends paid by a
company incorporated or re-registered under the Companies Act.

There are no capital gains, gift or inheritance taxes
levied by the Cayman Islands on companies incorporated under the Companies Act. In addition, shares of companies incorporated under the
Companies Act are not subject to transfer taxes, stamp duties or similar charges.

  84  

There is no income tax treaty or convention currently
in effect between the United States and the Cayman Islands or between China and the Cayman Islands.

People’s Republic of China Taxation

Pursuant to the Arrangement between the Mainland China
and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Tax Arrangement,
where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at least 25% of a PRC enterprise,
the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong resident enterprise is reduced
to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority. Pursuant to the Notice of the State Administration
of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, or Circular 81, a resident enterprise
of the counter-party to such Tax Arrangement should meet the following conditions, among others, in order to enjoy the reduced withholding
tax under the Tax Arrangement: (i) it must directly own the required percentage of equity interests and voting rights in such PRC resident
enterprise; and (ii) it should directly own such percentage in the PRC resident enterprise anytime in the 12 months prior to receiving
the dividends. Furthermore, the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments under Tax Treaties (For Trial
Implementation), or the Administrative Measures, which became effective in October 2009, requires that the non-resident enterprises must
obtain the approval from the relevant tax authority in order to enjoy the reduced withholding tax rate under the tax treaties. There are
also other conditions for enjoying such reduced withholding tax rate according to other relevant tax rules and regulations. Accordingly,
Hing Fat Industrial Limited may be able to enjoy the 5% withholding tax rate for the dividends it receives from the WFOE, if it satisfies
the conditions prescribed