Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 21

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 3
Chunk 21
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 official interpretation and enforcement may involve substantial
uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations,
may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a
manner different from our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future
businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations
may have on our business.

The uncertainties regarding
the enforcement of laws and the fact that rules and regulations in mainland China can change quickly with little advance notice, along
with the risk that the Chinese government may intervene or influence our operations at any time, or may exert more control over offerings
conducted overseas and/or foreign investment in our subsidiary in Hong Kong could result in a material change in our operations, financial
performance and/or the value of our Ordinary Shares or impair our ability to raise money.

There is uncertainty regarding whether we
will be deemed as a PRC resident enterprise. If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification
could result in unfavorable tax consequences to us and our non-PRC shareholders.

Under the PRC Enterprise
Income Tax Law and its implementation rules, an enterprise established outside of the PRC with “de facto management body”
within China is considered a “resident enterprise” and will be subject to the enterprise income tax on its global income at
the rate of 25%. The implementation rules define the term “de facto management body” as the managing body that actually, comprehensively
manage and control the production and operation, staff, accounting, property and other aspects of an enterprise. In 2009, the State Administration
of Taxation, or SAT, issued the Notice of the State Administration of Taxation on Issues Relating to Identification of PRC-Controlled
Overseas Registered Enterprises as Resident Enterprises in Accordance with the Standards of De Facto Management Body, or SAT
Notice 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled
enterprise that is incorporated offshore is located in China. Although SAT Notice 82 only applies to offshore enterprises controlled by
PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or non-PRC entities, the criteria set forth in SAT Notice
82 may reflect SAT’s general position on how the “