v3.26.1
INCOME TAX EXPENSE
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAX EXPENSE

 

14. 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, 2024 and 2025, 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 (benefits) expenses consist of the following components:

 

 

   2023   2024   2025   2025 
   For the years ended December 31, 
   2023   2024   2025   2025 
   HKD’000   HKD’000   HKD’000   US$’000 
Current tax   733    18    -    - 
Overprovision in prior years   -    (149)   -    - 
Deferred tax   (1,791)   (982)   3,087    397 
Total   (1,058)   (1,113)   3,087    397 

 

 

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:

 

 

   2023   2024   2025   2025 
   For the years ended December 31, 
   2023   2024   2025   2025 
   HKD’000   HKD’000   HKD’000   US$’000 
Loss before income taxes   (7,072)   (6,636)   (36,266)   (4,662)
Tax at Hong Kong statutory tax rate of 16.5%   (1,167)   (1,095)   (5,984)   (769)
Reconciling items:                    
Effect of tax-exempt for the Company and its subsidiaries incorporated in Cayman Islands and British Virgin Islands   33    35    3,143    404 
Adjustments in respect of current tax of previous years   

-

    (149)   -    - 
Tax effect of Hong Kong concessionary tax rate   (165)   (12)   -    - 
Tax effect of temporary difference   (13)   -    -    - 
Change in valuation allowance   -    -    5,822    748 
Tax effect of non-taxable income   (39)   (98)   (44)   (6)
Tax effect of deductible expense   293    206    6    1 
Others   -    -    144    19 
Income tax (benefits) expense   (1,058)   (1,113)   3,087   397

 

Deferred tax

 

Significant components of deferred tax were as follows:

 

  

Property and

equipment

   Allowance for expected credit losses   Net operating loss   Right-of-use assets    Lease liabilities   Total   Total 
   HKD’000   HKD’000   HKD’000   HKD’000    HKD’000   HKD’000   US$’000 
                             
As of January 1, 2023   314    -    -    -    -    314    39 
Recognized in statements of loss   (15)   1,806    -    -    -    1,791    231 
                                    
As of December 31, 2023   299    1,806    -    -    -    2,105    270 
Recognized in statements of loss   (112)   (236)   1,330    -    -    982    126 
                                    
As of December 31, 2024   187    1,570    1,330    -    -    3,087    396 
Recognized in statements of loss   (122)   311    2,546    166    (166)   2,735    351 
                                    
Less: Valuation allowance   (65)   (1,881)   (3,876)   (166)   166    (5,822)   (747)
                                    
As of December 31, 2025   -    -    -    -    -    -    - 

 

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.