These excerpts taken from the SOHU 10-Q filed May 11, 2009.
Online Game Business
AmazGame and Gamease, Changyous PRC subsidiary and VIE, respectively, were qualified as Software Enterprises under the CIT, and both are subject to a 0% income tax rate for the full year of 2008 and a 50% tax reduction to a rate of 12.5%, from fiscal year 2009 to fiscal year 2011.
For Online Game Business
Beijing Gamease Age Digital Technology Co., Ltd. (Gamease) was incorporated in the PRC in August 2007. It holds the licenses and approvals to operate online games in the PRC. The registered capital of Gamease is $1.3 million. Tao Wang, Changyous CEO and a Changyou employee own 60% and 40% interests in Gamease, respectively. Gameases primary beneficiary is AmazGame, which is an indirect subsidiary of Changyou and Sohu.