| Schedule of components of the income tax provision |
The components of the income tax provision are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | For the years ended December 31, | | 2023 | | 2024 | | 2025 | | 2025 | | HK$ | | HK$ | | HK$ | | US$ | | Current tax | | | | | | | | | Hong Kong | (5,877) | | | - | | | 6,226 | | | 800 | | | Total current tax | (5,877) | | | - | | | 6,226 | | | 800 | | | | | | | | | | | Deferred tax: | | | | | | | | | Hong Kong | 154,186 | | | 781,759 | | | (3,046,757) | | | (391,448) | | | Total deferred tax | 154,186 | | | 781,759 | | | (3,046,757) | | | (391,448) | | | Total income tax expense | 148,309 | | | 781,759 | | | (3,040,531) | | | (390,648) | |
|
| Schedule of deferred tax assets and liabilities |
The Company measures deferred tax assets and liabilities based on the difference between the financial statement and tax bases of assets and liabilities at the applicable tax rates. Components of the Company’s deferred tax asset and liability are as follows: | | | | | | | | | | | | | | | | | | | | | | For the years ended December 31 | | | 2024 | | 2025 | | 2025 | | | HK$ | | HK$ | | US$ | | Deferred tax assets: | | | | | | | | - Depreciation of property and equipment | | 25,168 | | | - | | | - | | | - Net operating loss carry forwards | | 2,852,133 | | | 4,673,163 | | | 600,409 | | | Total deferred tax assets | | 2,877,301 | | | 4,673,163 | | | 600,409 | | | Less: valuation allowance | | (2,852,133) | | | (4,673,163) | | | (600,409) | | | Deferred tax assets, net | | 25,168 | | | - | | | - | | | | | | | | | | Deferred tax liabilities: | | | | | | | | - Depreciation of property and equipment | | - | | | (27,524) | | | (3,536) | | | - Amortization of capitalized development costs | | (3,099,882) | | | (433) | | | (56) | | | Deferred tax liabilities, net | | (3,074,714) | | | (27,957) | | | (3,592) | |
|
| Schedule of reconciliation of provision for income taxes |
Reconciliation between the provision for income taxes computed by applying the Hong Kong Profits Tax rate of 16.5% to income before income taxes and the actual provision of income taxes is as follows: | | | | | | | | | | | | | | | | | | | | | | | | | For the years ended December 31, | | | | | | | | | | 2023 | | 2024 | | 2025 | | 2025 | | HK$ | | HK$ | | HK$ | | US$ | | Profit (loss) before income taxes | 6,777,190 | | | (19,429,233) | | | 75,704,173 | | | 9,726,487 | | | Hong Kong Profits Tax rate | 16.5 | % | | 16.5 | % | | 16.5 | % | | 16.5 | % | | Income taxes computed at Hong Kong Profits Tax rate | 1,118,236 | | | (3,205,824) | | | 12,491,190 | | | 1,604,871 | | | Reconciling items: | | | | | | | | | Tax effect of income that is not taxable | (42,605) | | | (24,777) | | | 4,462 | | | 573 | | | Tax effect of expenses that are not deductible (2) | 587,035 | | | 527,337 | | | 43,688 | | | 5,613 | | | The effect of tax rates in different tax jurisdictions | 4,950 | | | 2,241,106 | | | (16,821,462) | | | (2,161,225) | | | Research and development credit (1) | (1,529,698) | | | (1,644,560) | | | - | | | - | | | Change in valuation allowance | - | | | 2,852,133 | | | 1,244,906 | | | 159,946 | | | Tax credits | - | | | - | | | (3,000) | | | (385) | | | Others | 10,391 | | | 36,344 | | | (315) | | | (41) | | | Income tax expenses | 148,309 | | | 781,759 | | | (3,040,531) | | | (390,648) | |
(1)Research and development credit was arising from the tax authority of Hong Kong provided enhanced tax deduction for expenditure incurred by enterprises on a qualifying research and development activity and enterprises will be able to enjoy additional tax deduction for expenditure incurred on domestic research and development. (2)These non-deductible expenses included non-deductible IPO expenses, allowance for credit losses and penalty and entertainment.
|