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INCOME TAXES
 9 Months Ended
Apr. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 7 – INCOME TAXES

 

Income Taxes

 

Seychelles

 

RQS United is incorporated in Seychelles and is not subject to tax on income generated outside of Seychelles under the current law. In addition, upon payment of dividends, no withholding tax is imposed under current law.

 

Hong Kong

 

Roshing is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. Incorporated companies pay 8.25% tax on the first $2 million of profits and 16.5% on the remainder. Hong Kong income tax expenses for the nine months ended April 30, 2025 and 2024 amounted to $0 and $22,023, respectively.

 

For the nine months ended April 30, 2025, the loss before provision for income taxes of $1,162,328 consisted of United States source loss of $1,082,984 and Hong Kong source income of $79,344. For the nine months ended April 30, 2024, the income before provision for income taxes of $77,828 consisted of United States source loss of $348,499 and Hong Kong source income of $426,327.

 

Significant components of the provision for income taxes are as follows:

        
   For the nine months ended 
   April 30, 2025   April 30, 2024 
         
Current Hong Kong  $–   $22,023 
Deferred Hong Kong   –    – 
Provision for income taxes  $–   $22,023 

 

The following table reconciles the Hong Kong statutory rates to the Company’s Hong Kong effective tax rate:

        
   For the nine months ended 
   April 30, 2025   April 30, 2024 
         
Hong Kong statutory income tax rate   16.50%    8.25% 
Change in allowance for deferred tax assets   (16.50%)   –% 
Prior year over-accrual of provision for income taxes   –%    (3.08%)
Effective tax rate   –%    5.17% 

 

Deferred tax assets are comprised of the following:

        
   April 30, 2025   July 31, 2024 
         
Net operating loss carryforwards   13,107    – 
Allowance for deferred tax assets   (13,107)   – 
Deferred tax assets, net   –    – 

 

For United States income tax purposes, Tianci had a net operating loss carryforward of approximately $2,498,775 at April 30, 2025. Management has not determined that it is more likely than not that this carryforward will be realized and thus the Company maintained a 100% valuation allowance for the deferred tax asset relating to the United States net operating loss carryforward. Current United States income tax law limits the amount of loss available to offset against future taxable income when a substantial change in ownership occurs.

 

Uncertain tax positions

 

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of April 30, 2025 and July 31, 2024, the Company did not have any significant unrecognized uncertain tax positions.

 

As of April 30, 2025, tax years 2022 and forward generally remain open for examination for United States Federal and State tax purposes and tax years 2019 and forward generally remain open for examination for Hong Kong tax purposes.