Company: NCL
Filing Date: 2025-01-14
Form Type: S-1/A
Source: 0001575872-25-000059
Chunk: 47

Company: Northann Corp.
Filing Date: 2025-01-14
Form: S-1/A
Chunk 47
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finances, and properties of an enterprise. In addition, a circular, known as “SAT Circular 82,” issued in April 2009 by the
State Administration of Taxation, or the “SAT,” and partially amended by People’s Bank of China Circular 9 promulgated
in January 2014, specifies that certain offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will
be classified as PRC resident enterprises if the following are located or resident in the PRC: 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 seal, and minutes of board meetings and stockholders’ meetings; and half or more of the senior management or directors
having voting rights. Further to SAT Circular 82, SAT issued a bulletin, known as “SAT Bulletin 45,” which took effect in
September 2011 and was amended on June 1, 2015 and October 1, 2016 to provide more guidance on the implementation of SAT Circular 82 and
clarify the reporting and filing obligations of Chinese controlled offshore incorporated resident enterprises, to provide more guidance
on the implementation of SAT Circular 82 and clarify the reporting and filing obligations of such “Chinese-controlled offshore incorporated
resident enterprises.” SAT Bulletin 45 provides procedures and administrative details for the determination of resident status and
administration on post-determination matters. Although both SAT Circular 82 and SAT Bulletin 45 only apply to offshore enterprises controlled
by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreign individuals, the determining criteria
set forth in SAT Circular 82 and SAT Bulletin 45 may reflect SAT’s general position on how the “de facto management body”
test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC
enterprises, PRC enterprise groups, or by PRC or foreign individuals.

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If the PRC tax authorities
determine that the Company’s actual management operations is within the territory of China, we may be deemed to be a PRC resident
enterprise for PRC enterprise income tax purposes and a number of unfavorable PRC tax consequences could follow. First, we would be subject
to the uniform 25% enterprise income tax on our world-wide income, which could materially reduce our net income. In addition, we will
also be subject to PRC enterprise income tax reporting obligations. Finally,