Annual Report 2025

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2025 96 The United Laboratories International Holdings Limited Annual Report 2025 11. TAX EXPENSE (Continued) Pursuant to the PRC EIT law and its detailed implementation rules promulgated on 16 March 2007 and 6 December 2007, respectively, the tax rate for domestic and foreign enterprises is unified at 25% and is effective from 1 January 2008. Besides, with effect from 1 January 2008, if the subsidiaries are qualified as high-technology companies (under the new PRC EIT law), the subsidiaries are entitled to a reduced rate of 15% and such qualification is subject to renewal for every three years. Certain of group entities in the PRC are entitled to the reduced tax rate of 15% for 2025 and 2024. In 2025, The United Laboratories (Inner Mongolia) Co., Limited, subsidiaries of the Company, applied and were successfully granted for a reduced 15% enterprise income tax (EIT) under The National Development and Reform Commission (NDRC) released an updated list of industries in western regions (2025 Edition). According to a joint circular of Ministry of Finance and State Administration of Taxation, Cai Shui 2008 No.1, dividend distributed out of the profits generated since 1 January 2008 by a PRC entity to a non-PRC tax resident shall be subject to the PRC EIT pursuant to Articles 3 and 27 of the Income Tax Law Concerning Foreign Investment Enterprises and Foreign Enterprises and Article 91 of the Detailed Rules for the Implementation of the Income Tax Law for Enterprises with Foreign Investment and Foreign Enterprises. The withholding tax rate applicable to the Group is 5%. As at 31 December 2025 and 2024, deferred tax was provided for in full in respect of the temporary differences attributable to such profits. Pursuant to the Danish domestic tax law, the withholding tax on royalty payment in Denmark is subject to withholding tax at the statutory rate of 22% on the gross amount. Under the applicable double tax arrangement, the Group is entitled to a reduced rate of 10% for current period. The Group is operating in one of the jurisdictions where Pillar Two Rules is effective. However, as the Group’s estimated effective tax rates of such in-effect jurisdiction in which the Group operates are higher than 15%, after taking into account certain adjustments under the Pillar Two Rules based on management’s best estimate, the management of the Group considered the Group is not liable to top-up tax under the Pillar Two Rules.