Company: CAAS
Filing Date: 2025-07-25
Form Type: F-4/A
Source: 0001104659-25-070492
Chunk: 133

Company: China Automotive Systems, Inc.
Filing Date: 2025-07-25
Form: F-4/A
Chunk 133
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 withheld PRC income taxes from our foreign investors and as a non-resident
enterprise, we are subject to PRC withholding tax if we receive dividends directly from our PRC subsidiaries paid by them using funds
out of their profits generated on and after January 1, 2008.

Nevertheless, a significant portion of our operations
are currently based in the PRC and are likely to remain based in the PRC after the Redomicile Merger. Moreover, a significant portion
of our management team, who are in charge of finance and human resources related decisions, will perform their duties mainly in the PRC,
and over 50% of our board members habitually reside in the PRC. Our main properties, accounting books and records, company seals and minutes
of board meetings are maintained in China.

However, the tax resident status of an enterprise
is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation to the term “de
facto management body.” It remains unclear whether the PRC tax authorities will treat us as a PRC resident enterprise either before
or after the Redomicile Merger or what effect, if any, the Redomicile Merger will have on the determination. As a result, we cannot express
an opinion as to the likelihood that we will be subject to the tax applicable to resident enterprises or non-resident enterprises under
the EIT Law. If CAAS Cayman is treated as a PRC resident enterprise, it will be subject to PRC tax on its worldwide income at the 25%
uniform tax rate, but the dividends distributed from its subsidiaries that are or deemed to be PRC resident enterprises should be tax-exempt
income. In addition, if CAAS Cayman is considered a PRC resident enterprise, the dividends paid by it to the non-PRC shareholders may
be regarded as income from sources within the PRC pursuant to SAT Circular No. 82, and therefore the non-PRC institutional shareholders
may be subject to a 10% withholding tax, and the non-PRC individual shareholders may be subject to a 20% withholding tax unless they are
able to claim a lower tax rate pursuant to applicable tax treaties.

Furthermore, if CAAS Cayman is treated as a PRC
resident enterprise, there is a possibility that the capital gains realized by its non-PRC shareholders from the transfer of their shares
may be regarded as income from sources within the PRC for PRC tax purposes. If