v3.25.1
INCOME TAX EXPENSE
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAX EXPENSE

 

PLUTUS FINANCIAL GROUP LIMITED AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

11. INCOME TAX EXPENSE

 

Cayman Islands and British Virgin Islands

 

The Company and its subsidiaries, Plutus IH Group and Plutus IH Int’l are domiciled in the Cayman Islands and the British Virgin Islands, respectively. Both localities currently enjoy permanent income tax holidays; accordingly, the Company, Plutus IH Group and Plutus IH Int’l do not accrue income taxes.

 

Hong Kong

 

Under the Inland Revenue Ordinance of Hong Kong, only profits arising in or derived from Hong Kong are chargeable to Hong Kong profits tax, whereas the residence of a taxpayer is not relevant. Therefore, the Company’s operating subsidiaries, namely Plutus Securities and Plutus AM, are generally subject to Hong Kong income tax on its taxable income derived from the trade or businesses carried out by them at the income tax rates ranging from 8.25% to 16.5% on the assessable income arising in Hong Kong during its tax year.

 

For the years ended December 31, 2023 and 2024, Hong Kong profits tax is calculated in accordance with the two-tiered profits tax rates regime. The applicable tax rate for the first HKD2 million of assessable profits is 8.25% and assessable profits above HKD2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. Since the application of the two-tiered rates is restricted to only one enterprise nominated among connected entities, only one subsidiary is subject to the concessionary tax rate.

 

The income tax expenses (benefits) consist of the following components:

 

   2022   2023   2024   2024 
   For the years ended December 31, 
   2022   2023   2024   2024 
   HKD’000   HKD’000   HKD’000   US$’000 
Current tax   317    733    18    2 
Overprovision in prior years   -    -    (149)   (20)
Deferred tax   15    (1,791)   (982)   (126)
Total   332    (1,058)   (1,113)   (144)

 

 

PLUTUS FINANCIAL GROUP LIMITED AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

A reconciliation of the provision for income taxes determined at the Hong Kong statutory income tax rate to the Company’s effective income tax rate is as follows:

 

   2022   2023   2024   2024 
   For the years ended December 31, 
   2022   2023   2024   2024 
   HKD’000   HKD’000   HKD’000   US$’000 
Loss before income taxes   (612)   (7,072)   (6,636)   (854)
Tax at Hong Kong statutory tax rate of 16.5%   (101)   (1,167)   

(1,095

)   (141)
Reconciling items:                    
Effect of tax-exempt for the Company and its subsidiaries incorporated in Cayman Islands and British Virgin Islands   -    33    35    5 
Adjustments in respect of current tax of previous years             (149)   (20)
Tax effect of Hong Kong concessionary tax rate   -    (165)   (12)   (2)
Tax effect of temporary difference   99    (13)   

-

   

-

Tax effect of non-taxable income   (55)   (39)   

(98

)   

(13

)
Tax effect of non-deductible expense   389    293    206    27 
Income tax expense   332    (1,058)   (1,113)   (144)

 

Deferred tax

 

Significant components of deferred tax were as follows:

  

Property and

equipment

   Allowance for expected credit losses   Net operating loss     Total   Total 
   HKD’000   HKD’000   HKD’000     HKD’000   US$’000 
                       
As of January 1, 2022   329    -           -      329    42 
Recognized in statements of loss   (15)   -     -      (15)   (2)
                           
As of December 31, 2022   314    -    

-

      314    40 
Recognized in statements of loss   (15)   1,806    

-

      1,791    231 
              

            
As of December 31, 2023   299    1,806    

-

      2,105    271 
Recognized in statements of loss   (112)   (236)    1,330      982    126 
                             
As of December 31, 2024   187    1,570     1,330      3,087    397 

 

Management evaluated the recoverability of deferred tax assets to the extent that future taxable income, including the reversal of taxable temporary differences and forecasted earnings, given that tax losses in Hong Kong can be carried forward indefinitely.