Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 289

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 289
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23. INCOME TAX

a) Income tax

Cayman Islands

Under the current laws of the Cayman Islands,
the Company is not subject to tax on income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments
of dividends to shareholders.

Hong Kong S. A. R.

Under the current Hong Kong S. A. R. Inland
Revenue Ordinance, the Company’s Hong Kong S. A. R. subsidiary is subject to Hong Kong S. A. R. profits tax at the rate of16.5% on its taxable income generated from the operations in Hong Kong S. A. R. The first HK$2.0million of assessable profits
earned by a company will be taxed at8.25% whilst the remaining profits will continue to be taxed at16.5%. There is an anti-fragmentation
measure where each Company will have to nominate only one company in the Company to benefit from the progressive rates. Payments of dividends
by the Hong Kong S. A. R. subsidiary to the Company is not subject to withholding tax in Hong Kong S. A. R.

The PRC

The Company’s PRC subsidiaries and the VIEs
are subject to the PRC Enterprise Income Tax Law (“ EIT Law”), which was effective since January 1, 2008. In accordance
with EIT Law, the statutory income tax rate of25%, unless a preferential EIT rate is otherwise stipulated.

Under the EIT Law and its implementation rules,
an enterprise established outside China with a “place of effective management” within China is considered a China resident
enterprise for Chinese enterprise income tax purposes. A China resident enterprise is generally subject to certain Chinese tax reporting
obligations and a uniform25% enterprise income tax rate on its worldwide income. The implementation rules to the New EIT Law provide
that non-resident legal entities are considered PRC residents if substantial and overall management and control over the manufacturing
and business operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting from
the limited PRC tax guidance on the issue, the Company does not believe that the legal entities organized outside the PRC should be treated
as residents for 2008 EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered
outside the PRC are deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to