1. According to the relevant regulations, if a resident enterprise, or an enterprise controlled by a resident enterprise and China residents and established in a country (region) where the actual tax burden is obviously lower than the tax rate stipulated in the first paragraph of Article 4 of the Enterprise Income Tax Law, fails to distribute or reduces the distributed profits due to reasonable business needs, the part of the above profits that should belong to the resident enterprise shall be included in the current income of the resident enterprise.
2. If China resident enterprises or individual residents can provide information to prove that the foreign enterprises under their control are established in the United States, Britain, France, Germany, Japan, Italy, Canada, Australia, India, South Africa, New Zealand and Norway, it is not necessary to distribute the undistributed or reduced profits of the foreign enterprises as dividends and include them in the current income of China resident enterprises.
3. If your company's subsidiaries are not in the above-mentioned tax-free countries and regions, their undistributed profits need to be regarded as distribution and included in your company's income to pay enterprise income tax.