Company: JXG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043744
Chunk: 176

Company: JX Luxventure Group Inc.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 10
Chunk 176
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 accumulating profits. Such a company is only registered in the country of domicile to
satisfy the organizational form as required by law, but it does not engage in such substantial business operations as manufacturing, distribution
and management. As our Hong Kong holding companies are controlling companies and are not engaged in substantial business operations, they
could be considered as conduit companies by tax authorities and we do not expect them to be a beneficial owner.

In addition to the changes to the current tax
structure, under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is
considered a resident enterprise and will normally be subject to an EIT of 25% on its global income. The implementing rules define the
term “de facto management bodies” as “an establishment that exercises, in substance, overall management and control
over the production, business, personnel, accounting, etc., of a Chinese enterprise.”

It remains unclear whether the PRC tax authorities
would require or permit our overseas registered entities to be treated as PRC resident enterprises. We do not currently consider our company
to be a PRC resident enterprise. However, if the PRC tax authorities determine that we are a “resident enterprise” for PRC
enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise
income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this
would mean that income such as interest on offering proceeds and non-China source income would be subject to PRC enterprise income tax
at a rate of 25%. Second, although under the EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify
as “tax-exempt income,” we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign
exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound
remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that
future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a
10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to gains derived by our non-PRC shareholders
from transferring our shares.

U. S. Federal Income Taxation