Company: MKDWW
Filing Date: 2025-04-03
Form Type: 20-F
Source: 0001641172-25-002607
Chunk: 19

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 3
Chunk 19
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 authorities may also order MKD, or make it advisable for MKD, to unwind or reverse the transactions.
In addition, if the CSRC or other regulatory authorities in China subsequently promulgate new rules or issue directives requiring that
MKD obtain additional approvals or complete additional filing or other regulatory procedures for the Company’s prior offerings
overseas, there is no assurance that we will be able to comply with these requirements and may not be able to obtain any waiver of such
requirements, if and when procedures are established to obtain such a waiver. Any of the foregoing could materially and adversely affect
MKD’s business, prospects, financial condition, reputation, and the trading price of the Company’s listed securities.

  11  

It
is unclear whether we will be considered a PRC “resident enterprise” under the PRC Enterprise Income Tax Law and, depending
on the determination of MKD’s PRC “resident enterprise” status, MKD’s global income may be subject to the 25%
PRC enterprise income tax, which could materially and adversely affect MKD’s results of operations.

Under
the PRC Enterprise Income Tax Law, which became effective in January 2008 and was amended on February 24, 2017 and December 29, 2018,
and its implementation rules, an enterprise established outside of the PRC with a “de facto management body” within China
is considered a PRC resident enterprise and will be subject to enterprise income tax at the rate of 25% on its global income. The implementation
rules of the PRC Enterprise Income Tax Law define the term “de facto management bodies” as “establishments that carry
out substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties,
etc., of an enterprise.” On April 22, 2009, STA issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated
Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or STA Circular 82, which was partially amended
by Announcement on Issues concerning the Determination of Resident Enterprises Based on the Standards of Actual Management Institutions
issued by STA on January 29, 2014, and further partially amended by Decision on Issuing the Lists of Invalid and Abolished Tax Departmental
Rules and Taxation Normative Documents issued by STA on December 29, 2017. STA Circular 82, as amended, provides certain specific criteria
for determining whether the “de facto