Company: JXG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043744
Chunk: 56

Company: JX Luxventure Group Inc.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 56
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to distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans
for our directors, executive officers and employees under PRC law.

In addition, the State Administration of Taxation,
or SAT, has issued certain circulars concerning employee stock options and restricted shares. Under these circulars, our employees working
in China who exercise stock options or are granted restricted shares will be subject to PRC individual income tax. Our PRC subsidiaries
have obligations to file documents related to employee stock options or restricted shares with relevant tax authorities and to withhold
individual income taxes of those employees who exercise their share options or are granted with restricted shares. If our employees fail
to pay or we fail to withhold their income taxes according to relevant laws and regulations, we may face sanctions imposed by the tax
authorities or other PRC governmental authorities.

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 its “de facto management body” within the PRC 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 body that exercises full and substantial control and overall management
over the business, productions, personnel, accounts and properties of an enterprise. In 2009, the State Administration of Taxation, or
SAT, issued a circular, known as SAT Circular 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 this circular applies
only to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners,
the criteria set forth in the circular may reflect the SAT’s general position on how the “de facto management body”
text should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, an offshore incorporated
enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de
facto management body” in China, and will be subject to PRC enterprise income tax on its global income only if all of the following
conditions