Company: JXG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043744
Chunk: 175

Company: JX Luxventure Group Inc.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 10
Chunk 175
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 company incorporated in the Marshall
Islands, which indirectly holds our equity interests in our PRC operating subsidiaries. The EIT Law and its implementation rules, both
of which became effective as of January 1, 2008, provide that a PRC enterprise is subject to a standard income tax rate of 25% and China-sourced
income of foreign enterprises, such as dividends paid by a PRC subsidiary to its overseas parent, will normally be subject to PRC withholding
tax at a rate of 10%, unless there are applicable treaties between the overseas parent’s jurisdiction of incorporation and China
to reduce such rate.

Under the Arrangement between the Mainland and
the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to
Taxes on Income, or the Double Taxation Arrangement, effective as of January 1, 2007, such dividend withholding tax rate is reduced to
5% if a Hong Kong resident enterprise owns over 25% of the PRC company distributing the dividends. Under the aforesaid arrangement, any
dividends that our PRC operating subsidiaries pay to their Hong Kong holding companies may be subject to a withholding tax at the rate
of 5% if they are not considered to be a PRC “resident enterprise” as described below. However, if the Hong Kong holdings
companies are not considered to be the “beneficial owner” of such dividends under the Notice Regarding Interpretation and
Recognition of Beneficial Owners under Tax Treaties promulgated by the State Administration of Taxation on October 27, 2009 (and not a
PRC “resident enterprise”), such dividends would be subject to the withholding tax rate of 10%. The withholding tax rate of
5% or 10% applicable will have a significant impact on the amount of dividends to be received by us and ultimately by shareholders.

According to the Notice Regarding Interpretation
and Recognition of Beneficial Owners under Tax Treaties, the term “beneficial owner” refers to a person who has the right
to own and dispose of the income and the rights or properties generated from the said income. The “beneficial owner” may be
an individual, a company or any other organization which is usually engaged in substantial business operations. A conduit company is not
a “beneficial owner.” The term “conduit company” refers to a company which is usually established for purposes
of dodging or reducing taxes, and transferring or