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

NOTE 13 － INCOME TAX EXPENSE

 

The components of income before income taxes were as follows:

 

          
   Years ended December 31, 
   2023   2024   2025 
Domestic (Cayman Islands)  $-   $(1,062,815)  $(1,490,142)
Foreign   12,181,382    11,899,328    22,244,114 
                
Income before income taxes  $12,181,382   $10,836,513   $20,753,972 

 

The components of the provision for income tax expense were as follows:

 

          
   Years ended December 31, 
   2023   2024   2025 
Current income tax expense:               
 Domestic  $-   $-   $- 
 Foreign   1,767,811    2,410,265    4,206,889 
Total   1,767,811    2,410,265    4,206,889 
                
Deferred income tax expense (benefit):               
 Domestic   -    -    - 
 Foreign   96,390    5,477    (7,069)
Total   96,390    5,477    (7,069)
                
Total income tax expense  $1,864,201   $2,415,742   $4,199,820 

 

The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company is subject to taxes in the jurisdictions in which it operates, as follows:

 

Cayman Islands

 

Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.

 

The summary of effective income tax rates by the governing countries is as follows:-

 

 SCHEDULE OF EFFECTIVE INCOME TAX RATE

   Income Tax Rate 
Jurisdiction  2023   2024   2025 
France   25%   25%   25%
Australia   30%   30%   30%
South Korea   9.9%   9.9%   9.9%
Japan   34%   34%   34%
United Kingdom   25%   25%   25%
Singapore   17%   17%   17%

 

 

The reconciliation of the actual income taxes to the amount of tax computed by the applying Singapore tax rate (17% for 2023, 2024 and 2025) to pre-tax income is as follows:

 

                            
   Years ended December 31, 
   2023   2024   2025 
Income tax expense at statutory tax rate   $2,070,835    17%  $1,842,207    17%  $3,528,175    17%
Effect of differences between statutory tax rates and foreign effective tax rates (i)   (44,903)   0%   242,191    2%   (32,887)   (0)%
Income not subject to taxes   (935,003)   (8)%   (3,263)   (0)%   (2,053,981)   (10)%
Expenses not subject to tax deduction   258,086    2%   239,505    2%   546,262    3%
Net operating losses   1,060    0%   241,212    2%   2,129,290    10%
Other tax adjustments   514,126    4%   (146,110)   (1)%   82,961    0%
Income tax expense and effective income tax rate  $1,864,201    15%  $2,415,742    22%  $4,199,820    20%

 

(i)Certain operations were conducted out of Singapore. The effect represents the foreign income tax rate differential when compared to Singapore statutory income tax rate for the years ended December 31, 2023, 2024, and 2025.

 

Deferred taxes

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred tax assets are comprised of operating loss carryforwards and other temporary differences. Significant components of the Company’s deferred tax assets are as follows:

 

      
   As of December 31, 
  2024   2025 
Deferred tax assets:          
Allowance for obsolete stocks  $162,108   $164,589 
Allowance for expected credit losses   2,363    - 
Provision for warranty liabilities   356,140    366,562 
Depreciation   -    3,409 
Provision for employee related obligations   112,406    158,573 
Other items   19,042    10,678 
           
Total deferred tax assets   652,059    703,811 
           
Deferred tax liabilities:          
Property, plant and equipment   (15,478)   (19,683)
Other items   -    (10,712)
Total deferred tax liabilities   (15,478)   (30,395)
           
Non-current deferred tax assets, net  $636,581   $673,416 

 

As of December 31, 2025, the cumulative net operating losses which can be carried forward to offset future taxable income are as follows:

SCHEDULE OF CUMULATIVE NET OPERATING LOSSES

 

Tax regimes of the country  Expiration date  Amount 
Singapore  Indefinite  $7,135,877 
United Kingdom  Indefinite   116,879 
Japan  2035   1,878,109 
South Korea  2035   1,001,991 
Total     $10,132,856 

 

These cumulative net operating losses can be carried forward to offset future taxable income, subject to the statutory requirements applicable to the operations in their respective countries of incorporations.

 

 

The following table presents supplemental cash flow information related to income taxes paid (net of refunds received):

  

   Year ended December 31, 2025 
Domestic  $- 
Foreign:     
Japan   342,990 
Singapore   2,362,347 
Other countries   (24,051)
Total  $2,681,286 

 

Income taxes paid (net of refunds received) for the years ended December 31, 2023 and 2024 were $734,001 and $1,238,497, respectively.

 

Uncertain tax positions

 

The Company evaluates the 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 December 31, 2023, 2024 and 2025, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2023, 2024 and 2025 and also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from December 31, 2025.

 

The Company remains subject to examination by the respective governing authorities on its tax returns for the tax periods of 2025.