Company: SCAG
Filing Date: 2025-11-12
Form Type: 20-F
Source: 0001213900-25-109190
Chunk: 105

Company: Scage Future
Filing Date: 2025-11-12
Form: 20-F
Item: Item 4A
Chunk 105
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 tax laws, Scage HK is not taxed on its foreign-sourced income. Additionally,
upon payments of dividends from Scage HK to its shareholders, no withholding tax in Hong Kong will be imposed.

PRC

Under the PRC Enterprise
Income Tax Law (the “ EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign invested enterprises
is 25%. The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto
management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to
the PRC income tax at the rate of 25% on its global income. The Implementing Rules of the EIT Law merely define the location of the “de
facto management body “as” the place where the exercising, in substance, of the overall management and control of the production
and business operation, personnel, accounting, property, of a non-PRC company is located.” Based on a review of surrounding facts
and circumstances, we do not believe that it is likely that its operations outside of the PRC should be considered as a resident enterprise
for PRC tax purposes for the years ended June 30, 2025, 2024 and 2023.

In accordance with the implementation
rules of EIT Laws, a qualified “ High and New Technology Enterprise” (“ HNTE”) is eligible for a preferential tax
rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the
prior certificate expires. Nanjing Scage Automobile Technology Co., Ltd. obtained its HNTE status in 2021 and enjoyed the preferential
tax rate for the period of three years through December 2023. In November 2024, Nanjing Scage Automobile Technology Co., Ltd. renewed
the HNTE, which allows it to enjoy a preferential tax rate of 15% for the period of three years through December 2026.

According to Caishui [2019]
No.13, [2021] No.12, announcement of the Ministry of Finance and the State Taxation Administration, and [2023] No.12, announcement of
the Ministry of Finance and the State Taxation Administration, small, low profit enterprises shall meet three conditions for enjoying
preferential tax conditions, including (i) annual taxable income of