Composition of income tax

a) Income taxes

Cayman Islands and BVI

Under the current laws of the Cayman Islands and BVI, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands and BVI withholding tax will be imposed.

Hong Kong, China

The Company’s subsidiaries in Hong Kong are subject to Hong Kong Profits Tax rate at 16.5% on the estimated assessable profit. For the year ended December 31, 2023, 2024 and 2025, the first HK$2 million of profits earned by one of the Company’s subsidiaries incorporated in Hong Kong is taxed at half the current tax rate (i.e. 8.25%) while the remaining profits will continue to be taxed at the existing 16.5% tax rate. There are no withholding taxes in Hong Kong on remittance of dividends.

Singapore

Subsidiaries in Singapore are subject to Singapore corporate income tax rate of 17%.

Japan

Kingsoft Japan is incorporated in Japan with paid-in capital in excess of Japanese Yen (“JPY”) 100 million and was subject to a national corporate income tax rate of 23.2% as of the years ended 31, 2022. In 2023, Kingsoft Japan reduced its paid-in capital to 90 million Japanese Yen, and is taxed at a tax rate of 15% on first JPY8 million and at 23.2% on the portion over JPY8 million as of the year ended 31, 2023, 2024 and 2025. Local income taxes, which are local inhabitant tax and enterprise tax, are also imposed on corporate income.

PRC

The Company’s subsidiaries in the PRC and the VIEs are subject to the statutory rate of 25%, unless otherwise specified, in accordance with the Enterprise Income Tax law (the “EIT Law”), which was effective since January 1, 2008.

As qualified High New Technology Enterprise (“HNTE”), Beijing Kingsoft Cheetah Technology Co., Ltd. is entitled to the preferential income tax rate of 15% from 2022 to 2027. Beijing OrionStar Technology Co., Ltd. is entitled to the preferential income tax rate of 15% from 2021 to 2026. Zhuhai Baoqu Technology Co., Ltd. is entitled to the preferential income tax rate of 15% from 2023 to 2025.

In accordance with the requirements of Cai Shui [2022] No. 19 and State Administration of Taxation Hengqin-Guangdong-Macao In-Depth Cooperation Zone Taxation Bureau Announcement [2023] No. 1, enterprises of qualified industries that met the operational substantive requirements located in Hengqin-Guangdong-Macao In-Depth Cooperation Zone, are subject to a tax rate of 15%. Zhuhai Baohaowan Technology Co., Ltd and Zhuhai Hainiao Technology Co. Ltd are entitled to the preferential income tax rate of 15% as they are qualified with the mentioned requirements.

Without the tax holidays and preferential tax, the Group’s income tax expenses would have decreased by RMB3,457, increased by RMB436 and increased by RMB6,792 (US$971) for the years ended December 31, 2023, 2024 and 2025, respectively. The impacts of the tax holidays and preferential tax rates were a decrease in the loss per share of RMB0.0023, increase RMB0.0003 and increase RMB0.0044 (US$0.0006), for the year ended December 31, 2023, 2024 and 2025, respectively.

Under the EIT Law, dividends paid by PRC enterprises out of profits earned post-2007 to non-PRC tax resident investors are subject to PRC dividend withholding tax of 10%. A lower withholding tax rate may be applied based on applicable tax treaties with certain jurisdictions.

As of December 31, 2025, the Group had taxable losses of approximately RMB4,305,291 (US$615,648) primarily deriving from entities in the PRC, Hong Kong and Singapore, which can be carried forward per tax regulation to offset future net profit for income tax purposes. The PRC taxable loss RMB4,079,565 (US$583,370) will expire from 2026 to 2035 and Hong Kong, Singapore and others taxable loss RMB225,726 (US$32,278) can be carried forward without an expiration date.

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Newly adopted accounting standard updates, cash paid for income taxes, net of refunds, amounted to RMB941 (US$135) in the PRC, RMB10,212 (US$1,460) in Japan and RMB579 (US$83) in other jurisdictions for the year ended December 31, 2025, totaling RMB11,732 (US$1,678). Cash paid for income taxes, net of refunds, during the years ended December 31, 2024 and 2023 was RMB2,688 and RMB1,752, respectively.

b) Deferred tax assets and liabilities

Realization of the net deferred tax assets is dependent on factors including future reversals of existing taxable temporary differences and adequate future taxable income, exclusive of reversing deductible temporary differences and tax loss or credit carry forwards. The Group evaluates the potential realization of deferred tax assets on an entity-by-entity basis. As of December 31, 2024 and 2025, valuation allowances were provided against deferred tax assets in entities where it was determined it was more-likely-than-not that the benefits of the deferred tax assets will not be realized.

c) Withholding income tax on dividends

Undistributed earnings of certain of the Company’s PRC subsidiaries amounted to approximately RMB830,060 and RMB908,915 (US$129,973) on December 31, 2024 and 2025, respectively. Those earnings are considered to be indefinitely reinvested; accordingly, no provision for PRC withholding tax has been provided thereon. Upon repatriation of those earnings in the form of dividends, the Group would be subject to PRC withholding tax at 10%. The PRC withholding tax rate could be reduced to 5% should the treaty benefit

between Hong Kong and the PRC be applicable. As such, the amount of unrecognized deferred income tax liabilities is approximately ranging from RMB41,503 to RMB83,006 and RMB45,446 (US$6,499) to RMB90,892 (US$12,997) as of December 31, 2024 and 2025, respectively.

d) Unrecognized tax benefits

As of December 31, 2024 and 2025, the Group had unrecognized tax benefits of RMB163,120 and RMB155,534 (US$22,241), of which RMB10,959 and RMB9,706 (US$1,388), respectively, were deducted against the deferred tax assets on tax losses carry forward, and the remaining amounts of RMB152,161 and RMB145,828 (US$20,853), respectively were presented in the other non-current liabilities in the consolidated balance sheets. The Group’s unrecognized tax benefits for the years ended December 31, 2024 and 2025 were primarily related to the tax-deduction of share-based compensation expenses and disposal of long-term investments. As of December 31, 2024, and 2025, there were RMB152,161 and RMB145,828 (US$20,853) of unrecognized tax benefits that if recognized would impact the annual effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:

The Group recognizes accrued interest related to unrecognized tax benefits in income tax expenses. As of December 31, 2024 and 2025, the Group had accrued interest of RMB3,585 and RMB1,313 (US$188) respectively. For the years ended December 31, 2023, 2024 and 2025, the Group reversed RMB847, RMB2,424, and RMB2,272 (US$325) in interest, respectively. The Group did not record any penalties related to unrecognized tax benefits.

As of December 31, 2025, the tax years ended December 31, 2020 through 2025 for the Group’s subsidiaries in the PRC and the VIEs are generally subject to examination by the PRC tax authorities. The tax years ended December 31, 2021 through 2025 for the Group’s subsidiary in the Singapore is generally subject to examination by the Singapore tax authorities. The tax years ended December 31, 2019 through 2025 for the Group’s subsidiaries in Hong Kong are generally subject to examination by the Hong Kong tax authorities.