NOTE 17 - INCOME TAXES

The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10”) which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.  Under this method, deferred tax liabilities and assets are determined based on the difference between consolidated financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  Temporary differences between taxable income reported for financial reporting purposes and income tax purposes are insignificant.

For the three months ended March 31, 2025, the Company’s realized net taxable income which offset existing deferred tax assets relating to net operating losses, was offset further (100%) by the valuation allowance.  Other temporary differences are expected to be immaterial. Therefore, there were no expected income taxes, either current or deferred, reflected in the income statement.

As of March 31, 2025, the Company has available for U.S. federal income tax purposes a net operating loss carryforward of approximately $6,700,000, expiring within 20 years, that may be used to offset future taxable income. The Company has provided a valuation reserve against the full amount of the net operating loss benefit, since in the opinion of management based upon the earnings history of the Company; it is more likely than not that the benefits will not be realized.  

Due to possible significant changes in the Company's ownership, the future use of its existing net operating losses may be limited. Components of deferred tax assets as of March 31, 2025 are as follows. All or a portion of the remaining valuation allowance may be reduced in future years based on an assessment of earnings sufficient to fully utilize these potential tax benefits.  

The Company and its subsidiaries file separate income tax returns.

The United States of America

Scientific Energy, Inc. and Graphite Energy, Inc. are incorporated in the State of Utah in the U.S., and are subject to a gradual U.S. federal corporate income tax of 21%. The State of Utah does not impose any corporate state income tax. As of March 31, 2025, future net operation losses of approximately $0.001 million are available to offset future operating income for 20 years until 2040.

Hong Kong

Sinoforte Limited, Qwestro Limited, Citysearch Technology (HK) Company Limited and Celebrity Chef Catering Management Limited are incorporated in Hong Kong and Hong Kong Profits Tax has been calculated at 16.5% of the estimated assessable profit for the three months ended March 31, 2025.

Macau

Macao E-Media Development Company Limited, Fresh Life Technology Company Limited and Green Supply Chain Management Company Ltd. are subjected to Macau Corporate Income Tax.

People’s Republic of China (“PRC”)

Zhuhai Chengmi Technology Company Limited., Zhuhai Migua Technology Company Limited., Zhuhai Aomi E-commerce Company Limited and Zhuhai Wanmi Technology Company Limited are subject to PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws. The EIT rate for companies operating in the PRC is 25%.

As of March 31, 2025 and December 31, 2024, the significant components of the deferred tax assets are summarized below:

Schedule of Income Taxes

The Company is subject to income tax holidays with respect to its Asian operations, and accordingly has recognized for foreign income taxes.

The net deferred tax asset generated by the U.S. loss carry-forward has been fully reserved.

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.  During the three months ended March 31, 2025 and 2024, the Company recognized no interest and

penalties.   The Company had no accruals for interest and penalties as of March 31, 2025 and December 31, 2024.  Tax years from 2015 through 2025 are open to examination by the taxing authorities.