| Income taxes |
Note 38.Income taxes SEALSQ Corp is incorporated in the British Virgin Islands but is a Swiss tax resident, filing taxes in the canton of Geneva. It operates in various countries with differing tax laws and rates. The components of income before income taxes are as follows: | | | | | | | Income / (Loss) | | 12 months ended December 31, | USD’000 | | 2025 | | 2024 | | 2023 | Switzerland | | (21,152) | | (10,907) | | (6,524) | Foreign | | (13,056) | | (7,209) | | 3,481 | Loss before income tax | | (34,208) | | (18,116) | | (3,043) |
The components of income taxes relating to the Group are as follows: | | | | | | | Income taxes | | 12 months ended December 31, | USD’000 | | 2025 | | 2024 | | 2023 | Current | | | | | | | Switzerland | | — | | — | | — | Foreign | | (162) | | 3,085 | | 225 | Deferred | | | | | | | Switzerland | | — | | — | | — | Foreign | | — | | — | | — | Income tax expense / (income) | | (162) | | 3,085 | | 225 |
The difference between the income tax recovery / (expense) at the Swiss Federal statutory income tax rate of 8.5% compared to the Group’s income tax recovery / (expense) as reported is reconciled below. In line with ASU 2023-09, the Group has elected not to restate prior periods. | | | | | 12 months ended | | | December 31, | USD’000 | | 2025 | Net loss before income tax | | (34,208) | Swiss Federal statutory tax rate | | 2,908 | State and local income taxes (Geneva), net of federal income tax effect | | — | Foreign tax effects | | | France | | | State income taxes, net of federal income tax effect | | (856) | Changes in tax loss carryfowards from acquisition | | 3,531 | Change in loss carryforwards in relation to the debt remission | | 105 | Changes in tax loss carryfowards | | 4,161 | Permanent Difference in relation to stock-based compensation | | 2 | Changes in valuation allowances | | (8,005) | Amortization of deferred tax liabilities from acquisition | | 171 | Other | | 13 | Effect of changes in tax laws or rates enacted in the current period | | — | Effect of cross-border tax laws | | — | Tax credits | | | Changes in tax loss carryfowards | | 2,311 | State income taxes, net of federal income tax effect | | (1,798) | Changes in valuation allowances | | (2,513) | Nontaxable or nondeductible items | | | Permanent Difference in relation to stock-based compensation | | 15 | Changes in unrecognized tax benefits | | — | Other | | 117 | Income tax (expense) / recovery | | 162 |
| | | | | | | | 12 months ended December 31, | | USD’000 | | 2024 | | 2023 | | Net loss before income tax | | (18,116) | | (3,043) | | Statutory tax rate | | 14 | % | 14 | % | Expected income tax (expense)/recovery | | 2,536 | | 426 | | Change in tax loss carryforwards | | 3,912 | | 869 | | Change in loss carryforwards in relation to the debt remission | | (52) | | (514) | | Change in valuation allowance | | (6,932) | | (600) | | Foreign tax effects | | (1,047) | | (75) | | Nontaxable or nondeductible items | | (1,491) | | (22) | | Effect of exchange rate changes | | — | | — | | Amortization of PPA | | — | | — | | Other | | (11) | | (309) | | Income tax (expense) / recovery | | (3,085) | | (225) | |
The Group assesses the recoverability of its deferred tax assets and, to the extent recoverability does not satisfy the “more likely than not” recognition criterion under ASC 740, records a valuation allowance against its deferred tax assets. The Group considered its recent operating results and anticipated future taxable income in assessing the need for its valuation allowance. In view of the Group’s continued loss before income tax in the year ended December 31, 2025, and of the anticipated future taxable income per management’s forecast, the Group assessed that the recoverability of its deferred tax assets remains below the “more likely than not” recognition criterion under ASC 740 as at December 31, 2025. Consequently, the Group maintained a full valuation allowance against its gross deferred tax assets. The Group’s deferred tax assets and liabilities consist of the following: | | | | | Deferred income tax assets/(liabilities) | | As at December 31, | | As at December 31, | USD’000 | | 2025 | | 2024 | Foreign | | (4,367) | | — | Deferred income tax assets / (liabilities) | | (4,367) | | — |
| | | | | Deferred tax assets and liabilities | | As at December 31, | | As at December 31, | USD’000 | | 2025 | | 2024 | Defined benefit accrual | | 401 | | (9) | Tax loss carryforwards | | 18,388 | | 8,380 | Add back loss carryforwards used for the debt remission | | 881 | | 776 | Valuation allowance | | (19,670) | | (9,147) | Deferred tax liability from acquisition | | (4,367) | | — | Deferred tax assets / (liabilities) | | (4,367) | | — |
In connection with the acquisition of IC’Alps, the Group recognized a net deferred tax liability of USD 4,366,726 as at December 31, 2025, related to intangible assets identified during the Purchase Price Allocation (PPA). As of December 31, 2025, the Group’s operating cumulated loss carry-forwards of all jurisdictions are as follows: | | | | | | | | | | | Operating loss-carryforward as of December 31, 2025 | Total operating loss carry-forwards / Year of expiration if applicable to jurisdiction | USD’000 | | Switzerland | | France | | Japan | | USA | | Total | 2026 | | — | | — | | — | | — | | — | 2027 | | — | | — | | — | | — | | — | 2028 | | — | | — | | — | | — | | — | 2029 | | 188 | | — | | — | | — | | 188 | 2030 | | 7,189 | | — | | — | | — | | 7,189 | 2031 | | 10,027 | | — | | — | | — | | 10,027 | 2032 | | 14,928 | | — | | — | | — | | 14,928 | 2045 | | — | | — | | — | | 59 | | 59 | No expiration | | — | | 54,521 | | 9 | | — | | 54,530 | Totals | | 32,332 | | 54,521 | | 9 | | 59 | | 86,921 |
In France, operating losses may be carried forward indefinitely but may be offset against the taxable profits of a given fiscal year only up to an amount of €1 million, plus 50% of the taxable result in excess of that threshold. The following tax years remain subject to examination: | | | Significant jurisdictions | | Open years | Switzerland | | 2025 | France | | 2022 – 2025 | Japan | | 2025 | Taiwan | | 2025 | USA | | 2025 |
The Group has no unrecognized tax benefits.
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