Company: JWEL
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041556
Chunk: 48

Company: Jowell Global Ltd.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 4
Chunk 48
---
 income such as dividends, interest and royalties to such Chinese-controlled offshore-incorporated
enterprise.

We believe that we are not 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
we or any of our subsidiaries outside of China is a PRC resident enterprise for PRC enterprise income tax purposes, then we or such subsidiary
could be subject to PRC tax at a rate of 25% on its world-wide income, which could materially reduce our net income. In addition, we will
also be subject to PRC enterprise income tax reporting obligations. Furthermore, if the PRC tax authorities determine that we are a PRC
resident enterprise for enterprise income tax purposes, gains realized on the sale or other disposition of our Ordinary Shares may be
subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject
to the provisions of any applicable tax treaty), if such gains are deemed to be from PRC sources. It is unclear whether non-PRC shareholders
of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event
that we are treated as a PRC resident enterprise.

Regulations on Income Tax for Share Transfers

According to the Announcement of the SAT on Several
Issues Concerning the Enterprise Income Tax on Indirect Property Transfer by Non-Resident Enterprises, or Circular 7, promulgated by the
SAT in February 2015, if a non-resident enterprise, such as the Company, transfers the equity interests of a PRC resident enterprise indirectly
through transfer of the equity interests of an offshore holding company (other than a purchase and sale of shares issued by a PRC resident
enterprise through or in a public securities market) without a reasonable commercial purpose, the PRC tax authorities have the power to
reassess the nature of the transaction and treat the indirect equity transfer as a direct transfer. As a result, the gain derived from
such transfer, which means the equity transfer price less the cost of equity, will be subject to PRC withholding tax at a rate of up to
10%. Under the terms of Circular 7, the transfer