Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 470

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 470
---
 in the PRC, or that have such establishment or place of business but the relevant dividend or other distribution is
not effectively connected with the establishment or place of business). However, pursuant to the Arrangement between the Mainland and
Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes
on Income effective on December 8, 2006, the withholding tax rate for dividends paid by a PRC resident enterprise is 5% if the Hong Kong
enterprise is determined by the competent tax authority in the PRC to have satisfies the relevant conditions and requirements under the
applicable laws ; otherwise, the dividend withholding tax rate is 10%. According to the Notice of the PRC State Administration of Taxation
on Issues relating to the Administration of the Dividend Provision in Tax Treaties promulgated on February 20, 2009, and effective on
the same day, the corporate recipient of dividends distributed by PRC enterprises must satisfy the direct ownership thresholds at all
times during the 12 consecutive months preceding the receipt of the dividends. However, if a company is deemed to be a pass-through entity
rather than a qualified owner of benefits, it cannot enjoy the favorable tax treatments provided in the tax arrangement. In addition,
if transactions or arrangements are deemed by the relevant tax authorities to be entered into mainly for the purpose of enjoying favorable
tax treatments under the tax arrangement, such favorable tax treatments may be subject to adjustment by the relevant tax authorities
in the future.

Business
Tax and Value-added Tax

Pursuant
to the Temporary Regulations on Business Tax, which were promulgated by the State Council on December 13, 1993, and effective on January
1, 1994, as amended on November 10, 2008, and effective January 1, 2009, any entity or individual conducting business in a service industry
is generally required to pay business tax at the rate of 5% on the revenues generated from providing such services.

43

In
March 2016, the Ministry of Finance and SAT jointly issued the Pilot Program of Replacing Business Tax with Value-Added Tax (“VAT”)
in an All-round Manner, or Circular 36, effective from May 2016, according to which PRC tax authorities have started imposing VAT on
revenues from various service sectors, including real estate, construction, financial services and insurance, as well as other lifestyle
service sectors, replacing