Company: AEHL
Filing Date: 2025-08-05
Form Type: 20-F/A
Source: 0001641172-25-022290
Chunk: 42

Company: Antelope Enterprise Holdings Ltd
Filing Date: 2025-08-05
Form: 20-F/A
Chunk 42
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dividends received from Antelope Enterprises and/or gains derived by them from the sale or transfer of Antelope Enterprises’ shares.
Moreover, the State Administration of Taxation, or “SAT,” released Circular Guoshuihan No. 698, or Circular 698, on December
10, 2009 that reinforces the taxation of certain equity transfers by non-resident investors through overseas holding vehicles. Circular
698 addresses indirect equity transfers as well as other issues. Circular 698 is retroactively effective from January 1, 2008. According
to Circular 698, where a nonresident investor who indirectly holds an equity interest in a PRC resident enterprise through a non-PRC offshore
holding company indirectly transfers an equity interest in the PRC resident enterprise by selling an equity interest in the offshore holding
company, and the latter is located in a country or jurisdiction where the actual tax burden is less than 12.5% or where the offshore income
of its residents is not taxable, the non-resident investor is required to provide the PRC tax authority in charge of that PRC resident
enterprise with certain relevant information within 30 days of the execution of the equity transfer agreement. The tax authorities in
charge will evaluate the offshore transaction for tax purposes. In the event that the tax authorities determine that such transfer is
abusing forms of business organization and a reasonable commercial purpose for the offshore holding company other than the avoidance of
PRC income tax liability is lacking, the PRC tax authorities will have the power to re-assess the nature of the equity transfer under
the doctrine of substance over form. A reasonable commercial purpose may be established when the overall international (including U.S.)
offshore structure is set up to comply with the requirements of supervising authorities of international (including U.S.) capital markets.
If the SAT’s challenge of a transfer is successful, it may deny the existence of the offshore holding company that is used for tax
planning purposes and subject the non-resident investor to PRC tax on the capital gain from such transfer. Since Circular 698 has a short
history, there is uncertainty as to its application. We (or a nonresident investor) may become at risk of being taxed under Circular 698
and may be required to expend valuable resources to comply with Circular 698 or to establish that we (or such non-resident investor) should
not be taxed under Circular 698, which could have a material adverse effect on our financial condition and results of operations (or such