Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 55

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 55
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 Although this circular only applies to offshore enterprises controlled by
PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular
may reflect SAT’s general position on how the “de facto management body” text should be applied in determining the tax
resident status of all offshore enterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise
or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China
and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary
location of the day-to-day operational management is in China; (ii) decisions relating to the enterprise’s financial and human resource
matters are made or are subject to permission or approval by organizations or personnel in China; (iii) the enterprise’s primary
assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in China; and (iv)
at least 50% of voting board members or senior executives habitually reside in China.

We believe none of our entities
outside of China is a PRC resident enterprise for PRC tax purposes. However; the tax resident status of an enterprise is subject to determination
by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.”
If the PRC tax authorities determine that SunCar is a PRC resident enterprise for enterprise income tax purposes, we could be subject
to PRC tax at a rate of 25% on our worldwide income, which could materially reduce our net income, and we may be required to withhold
a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of our ordinary
shares. In addition, non-resident enterprise shareholders (including our ordinary shareholders) may be subject to PRC tax at a rate of
10% on gains realized on the sale or other disposition of ordinary shares, if such income is treated as sourced from within China. Furthermore,
if we are deemed a PRC resident enterprise, dividends payable to our non-PRC individual shareholders (including our ordinary shareholders)
and any gain realized on the transfer of ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% (and such PRC
tax may be withheld at source in the case