Company: RETO
Filing Date: 2025-10-24
Form Type: 424B5
Source: 0001213900-25-102262
Chunk: 103

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-10-24
Form: 424B5
Chunk 103
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 entities, we will continue to monitor our tax status. 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 non -mainland -Chinasource income would be subject to PRC enterprise income tax at a rate of 25%. Second, under the EIT Law and its implementing rules, dividends paid to us from our PRC subsidiaries would qualify as “tax -exemptincome.” 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 -PRCstockholders and with respect to gains derived by our non -PRCstockholders from transferring our shares. 34 We may be subject to foreign exchange controls in China, which could limit our use of funds that would be raised in future offerings, which could have a material adverse effect on our business. Beijing REIT, REIT Technology and REIT Ordos are subject to Chinese rules and regulations on currency conversion. In China, SAFE regulates the conversion of the RMB into foreign currencies. Currently, FIEs are required to apply to SAFE for “Registration of Establishment as FIEs”. Beijing REIT, REIT Technology and REIT Ordos are FIEs. With such registration, Beijing REIT, REIT Technology and REIT Ordos are allowed to open foreign currency accounts including the “current account” and the “capital account”. Currently, conversion within the scope of the “current account” and general “capital account” can be effected without requiring the approval of SAFE. However, conversion of currency in some restricted “capital account” (e.g. for capital items such as direct investments, loans, securities, etc.) still requires the approval of SAFE. In particular, if Beijing REIT, REIT Technology or REIT Ordos borrow foreign currency through loans from ReTo or other foreign lenders, these loans must be registered with SAFE. If Beijing REIT, REIT Technology or REIT Ordos are financed by means of additional capital contributions, reporting to or filings with certain Chinese government authorities, including MOFCOM, or the local counterparts of SAFE and SAMR or its local