v3.26.1
Note 13 - Taxation
 3 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
 

13.

Taxation

 

As of March 31, 2026 and December 31, 2025, taxes payable consists of:

 

   

March 31,

2026

    

December 31,

2025

  
   

US$(’000)

    

US$(’000)

  
   

(Unaudited)

          
                 

Turnover tax and surcharge payable

     1,296       1,276  

Enterprise income tax payable

     2,006       1,973  

Total taxes payable

     3,302       3,249  

 

For the three months ended March 31, 2026 and 2025, the Company’s income tax benefit/(expenses) consisted of:

 

   

Three Months Ended March 31,

  
   

2026

    

2025

  
   

US$(’000)

    

US$(’000)

  
   

(Unaudited)

    

(Unaudited)

  
                 

Current

     -       -  

Deferred

     3       (1 )

Income tax (expense)/benefit

     3       (1 )

 

The Company’s deferred tax assets as of March 31, 2026 and December 31, 2025 were as follows:

 

   

March 31,

2026

    

December 31,

2025

  
   

US$(’000)

    

US$(’000)

  
   

(Unaudited)

          
                 

Tax effect of net operating losses carried forward

     10,913       10,853  

Operating lease cost

     -       -  

Impairment on long-term investments

     106       105  

Impairment on intangible assets

     572       571  

Bad debts provision

     1,558       1,569  

Valuation allowance

     (13,150 )     (13,098 )

Deferred tax assets, net

     -       -  

 

The U.S. holding company has incurred aggregate net operating losses (“NOLs”) of approximately US$35.34 million and US$35.24 million as of March 31, 2026 and December 31, 2025, respectively The NOLs carryforwards as of December 31, 2017 gradually expire over time, the last of which expires in 2037. NOLs incurred after December 31, 2017 will no longer be available to carry back but can be carried forward indefinitely, subject to an annual limit of 80% on the amount of taxable income that can be offset by NOLs arising in tax years ending after December 31, 2017. The Company maintains a full valuation allowance against its net U.S. deferred tax assets, since due to uncertainties surrounding future utilization, the Company estimates there will not be sufficient future earnings to utilize its U.S. deferred tax assets.

 

The NOLs carried forward incurred by the Company’s PRC subsidiaries and VIEs were approximately US$8.99 million and US$8.99 million as of March 31, 2025 and December 31, 2025, respectively. The losses carryforwards gradually expire over time, the last of which will expire in 2028. The related deferred tax assets were calculated based on the respective NOLs incurred by each of the PRC subsidiaries and VIEs and the respective corresponding enacted tax rate that will be in effect in the period in which the losses are expected to be utilized.

 

The Company recorded approximately US$13.15 million and US$13.10 million valuation allowance as of March 31, 2026 and December 31, 2025, respectively, because it is considered more likely than not that a portion of the deferred tax assets will not be realized through sufficient future earnings of the entities to which the operating losses related.

 

For the three months ended March 31, 2026 and 2025, the Company recorded approximately US$0.003 million and US$0.11 million deferred tax valuation allowance, respectively.