Article 1 Purpose​

Livzon Pharmaceutical Group Inc. and its subsidiaries (hereinafter collectively referred to as the “Group”, the “whole Group”, or “we”) fulfill tax responsibilities in a responsible manner, implement strict and transparent tax management, and establish an effective tax risk management system to truly protect the needs and long-term interests of all stakeholders. To regulate the Group-wide tax management work, the Tax Policy (hereinafter referred to as the “Policy”) is formulated to achieve our sustainable development and actively fulfill our social responsibility.​

Article 2 Scope of Application​

The Policy applies to the whole Group. All units of the Group shall fully abide by the Policy while formulating their internal systems related to tax management.​

Article 3 Principles​

(I) Compliance with Tax Laws and Regulations​

We commit to comply with the spirit as well as the letter of the tax laws and regulations in the countries in which the Group operates, including but not limited to the Law of the People’s Republic of China on the Administration of Tax Collection, the Rules for the Implementation of the Law of the People’s Republic of China on the Administration of Tax Collection, the Enterprise Income Tax Law of the People’s Republic of China, the Regulations for the Implementation of the Law of the People’s Republic of China on Enterprises Income Tax, the Interim Regulations of the People’s Republic of China on Value-added Tax, and the Rules for the Implementation of the Interim Regulations of the People’s Republic of China on Value-added Tax.​

(II) Ex-Ante Planning​

We will elevate the priority of tax management, establish, and improve a mechanism for ex-ante prediction and ex-ante evaluation of tax-related business, and strengthen ex-ante planning and control in tax management. ​

(III) Reasonable Tax Planning​

We commit not to transfer value created to low tax jurisdictions and not to use tax structures without commercial substance, and we commit to undertake transfer pricing using the arm’s length principle. All units of the Group shall regulate tax behavior and properly plan tax schemes to minimize tax risks.​

(IV) Maintaining a Good Tax Authority-Enterprise Relationship​

We proactively communicate with government tax administration departments on major tax-related matters to reach a consensus with tax authorities and maintain a good tax authority-enterprise relationship.​

4.Management Strategies​

(I) Strictly regulate the tax behavior of the Group and its subsidiaries;​

(II) Establish and standardize a tax risk management system to effectively prevent tax risks;​

(III) Set and improve tax risk management objectives;​

(IV) Establish a tax risk management information system and an information communication and processing mechanism covering all aspects of risk management processes and internal control systems. Define tax risk control requirements and maintain good communication to ensure the implementation of timely and effective evaluation and monitoring of various tax risks.​

Article 5 Decision-Making Body

The Policy has been reviewed and approved by the ESG Committee (the “ESG Committee”) under the board of directors. The ESG Committee regularly reports to the board of directors on the implementation of the Policy and provides recommendations for the board of directors’ decision-making and oversight.

The ESG Committee is fully responsible for the implementation, oversight, and periodic review of the Policy.

For matters not covered in the Policy, relevant laws, regulations, and normative documents shall apply.

The Policy shall come into effect on the date of issuance.

Livzon Pharmaceutical Group Inc.