Company: IDVV
Filing Date: 2025-07-03
Form Type: 10-12G/A
Source: 0001683168-25-004925
Chunk: 70

Company: ModuLink Inc.
Filing Date: 2025-07-03
Form: 10-12G/A
Chunk 70
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90% or more of the total assets (excluding cash) of the offshore holding company are direct or indirect investments in China,
or 90% or more of the revenue of the offshore holding company was sourced from China; (3) the functions performed and risks assumed by
the offshore holding company(ies), although incorporated in an offshore jurisdiction to conform to the corporate law requirements there,
are insufficient to substantiate their corporate existence and (4) the foreign income tax payable in respect of the indirect transfer
is lower than the Chinese tax which would otherwise be payable in respect of the direct transfer if such transfer were treated as a direct
transfer. As a result, gains derived from such indirect transfer will be subject to PRC enterprise income tax, currently at a tax rate
of 10%.

Announcement 7 grants a safe
harbor under certain qualifying circumstances, including transfers in the public securities market and certain intragroup restricting
transactions, however, there is uncertainty as to the implementation of Announcement 7. For example, Announcement 7 requires the buyer
to withhold the applicable taxes without specifying how to obtain the information necessary to calculate taxes and when the applicable
tax shall be submitted. Announcement 7 may be determined by the tax authorities to be applicable to our offshore restructuring transactions
or sale of the shares of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved. Though Announcement
7 does not impose a mandatory obligation of filing the report of taxable events, the transferring party shall be subject to PRC withholding
tax if the certain tax filing conditions are met. Non-filing may result in an administrative penalty varying from 50% to 300% of unpaid
taxes. As a result, we and our non-resident enterprises in such transactions may become at risk of being subject to taxation under Announcement
7, and may be required to expend valuable resources to comply with Announcement 7 or to establish that we and our non-resident enterprises
should not be taxed under Announcement 7, for any restructuring or disposal of shares of offshore subsidiaries, which may have a material
adverse effect on our financial condition and results of operations.

PRC laws and regulations have established more complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitionsin China.

Further to the Regulations
on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&A Rules, the Anti-monopoly Law of the PRC,
the Rules of