Company: IDVV
Filing Date: 2025-05-30
Form Type: 10-12G
Source: 0001683168-25-004098
Chunk: 39

Company: ModuLink Inc.
Filing Date: 2025-05-30
Form: 10-12G
Chunk 39
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 7 extends its tax jurisdiction to not only indirect transfers set forth
under Circular 698 but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate
holding company. In addition, Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and
has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market.
Circular 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer)
of the taxable assets. Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets
indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the
transferee, or the PRC entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer.
Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company
if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC 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.

On October 17, 2017,
the SAT issued a Notice Concerning Withholding Income Tax of Non-Resident Enterprise, or SAT Notice No. 37, which abolishes Circular
698 and certain provisions of Circular 7. SAT Notice No. 37 reduces the burden of the withholding obligator, such as revocation of
contract filing requirements and tax liquidation procedures, strengthens the cooperation of tax authorities in different places, and clarifies
the calculation of tax payable and mechanism of foreign exchange.

Value-added Tax

Pursuant to the Provisional
Regulations on Value-added Tax of the PRC, or the VAT Regulations, which were promulgated by the State Council on December 13, 1993, took
effect on January 1, 1994, and were amended on November 10, 2008, February 6, 2016, and November 19, 2017, respectively, and the Rules
for the Implementation of the Provision