Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 180

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 10
Chunk 180
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 tax consequences relating to an investment in our Ordinary Shares, such as the tax consequences under state,
local and other tax laws.

Cayman Islands Taxation

The Cayman Islands currently
levy no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature
of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman
Islands except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands.
The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by the Company. There are no
exchange control regulations or currency restrictions in the Cayman Islands.

Material PRC Income Tax Considerations

Under the new EIT Law and
the Implementing Rules, an enterprise established outside of the PRC with “de facto management bodies” within the PRC is considered
as a resident enterprise and will be subject to a PRC income tax rate of 25% on its global income. According to the Implementing Rules,
“de facto management bodies” refer to “establishments that carry out substantial and overall management and control
over the manufacturing and business operations, personnel, accounting, properties, etc. of an enterprise.” Accordingly, our holding
company may be considered a resident enterprise and may therefore be subject to a PRC income tax on our global income. The State Administration
of Taxation 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 Circular 82, on April 22, 2009. Circular 82 provides certain specific criteria
for determining whether the “de facto management body” of a Chinese-controlled offshore incorporated enterprise is located
in China. Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises and not those invested in by individuals
or foreign enterprises, the determining criteria set forth in Circular 82 may reflect the State Administration of Taxation’s general
position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises,
regardless of whether they are controlled by PRC enterprises or controlled by or invested in by individuals or foreign enterprises. If
we are considered a resident enterprise and earn income other than dividends from our PRC subsidiary, such PRC income tax on our global
income could significantly