Company: VSA
Filing Date: 2025-11-13
Form Type: 424B5
Source: 0001213900-25-109735
Chunk: 50

Company: VisionSys AI Inc
Filing Date: 2025-11-13
Form: 424B5
Chunk 50
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 offshore incorporated enterprises
controlled by mainland China enterprises or mainland China enterprise groups will be classified as mainland China resident enterprises
if the following are located or resident in mainland China: senior management personnel and departments that are responsible for daily
production, operation and management; financial and personnel decision making bodies; key properties, accounting books, company seals,
and minutes of board meetings and shareholders’ meetings; and half or more of the senior management or directors having voting rights.
Circular 82also clarified that dividends and other income paid by such “resident enterprises” will be considered to
be mainland China source income, subject to mainland China withholding tax, currently at a rate of 10%, when recognized by shareholders
that are non-mainland China resident enterprises. Further to Circular 82, the State Administration of Taxation issued a bulletin,
known as Bulletin 45, which took effect on September 1, 2011, to provide more guidance on the implementation of Circular 82
and clarify the reporting and filing obligations of such “Chinese-controlled offshore-incorporated resident enterprises.”
Bulletin 45 provides procedures and administrative details for the determination of mainland China resident enterprise status and
administration on post-determination matters. Although both Circular 82and Bulletin 45 only apply to offshore enterprises
controlled by mainland China enterprises and there are currently no further rules or precedents governing the procedures and specific
criteria for determining the “de facto management body” for a company like ours, or controlled by mainland China enterprise
groups, not those controlled by mainland China individuals or foreign individuals like us, the determining criteria set forth in Circular 82 and Bulletin 45 may reflect the general position of State Administration of Taxation on how the “de facto management
body” test should be applied in determining the tax resident enterprise status of offshore enterprises, regardless of whether they
are controlled by mainland China enterprises, mainland China enterprise groups or by mainland China or foreign individuals.

We do not believe that VSA meets all of the conditions above. However,
if the PRC tax authorities determine that VSA is a mainland China resident enterprise for mainland China enterprise income tax purposes,
a number of unfavorable mainland China tax consequences could follow. First, we will be subject to the uniform 25% enterprise income tax
on our worldwide income, which could materially reduce our net income. In addition, we will also be subject to mainland China enterprise
income tax reporting obligations. Second, although dividends paid by one mainland China tax resident to another mainland China tax resident
should qualify as “tax-exempt income” under