v3.26.1
Income Taxes
 12 Months Ended
Mar. 31, 2026
Income Taxes [Abstract]  
Income Taxes

6. Income Taxes

 

Hong Kong

 

Under the current Hong Kong Inland Revenue Ordinance, the Company’s Hong Kong subsidiaries are subject to a 16.5% income tax on their taxable income generated from operations in Hong Kong. On December 29, 2017, Hong Kong government announced a two-tiered profit tax rate regime. Under the two-tiered tax rate regime, the first HK$2.0 million assessable profits will be subject to a lower tax rate of 8.25% and the excessive taxable income will continue to be taxed at the existing 16.5% tax rate. The two-tiered tax regime becomes effective from the assessment year of 2018/2019, which was on or after April 1, 2018. The application of the two-tiered rates is restricted to only one nominated enterprise among connected entities.

 

BVI

 

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

 

US

 

Under the current Florida state and US federal income tax, the Company does not need to pay income taxes as Florida state does not levy income tax. The federal income tax is based on a flat rate of 21% for the calendar year of 2026 (2025: 21%).

 

During the year ended March 31, 2026, the Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures on a prospective basis for the first annual period beginning after December 15, 2024. Adoption did not affect the recognized amounts of income tax expense or related tax balances; it expanded the income tax disclosures presented below. Prior comparative periods are not restated (prospective application).

 

Components of income (loss) before income taxes

 

The following table presents the components of income (loss) before income taxes by geographic region for the year ended March 31, 2026, in accordance with the updated requirements of ASU 2023-09: 

 

   March 31,
2026		 
   US$ 
United States   (757,815)
Foreign (Hong Kong)   10,019,171 
Total income before income taxes   9,261,356 

The following tables present the provision for benefit from income taxes for the year ended March 31, 2026, in accordance with the updated requirements of ASU 2023-09: 

 

   March 31,
2026		 
Current income taxes:  US$ 
U.S. Federal   
—
 
U.S. State & local (net)   
—
 
Foreign (Hong Kong)   1,728,035 
Total current   1,728,035 
      
Deferred income taxes:     
U.S. Federal   
—
 
U.S. State & local (net)   
—
 
Foreign (Hong Kong)   
—
 
Total deferred   
—
 
      
Income tax expenses   1,728,035 

 

Reconciliation of the differences between statutory tax rate and the effective tax rate

 

The Company operates in serval tax jurisdictions. Therefore, its income is subject to various rates of taxation. The income tax expense differs from the amount that would have resulted from applying the US statutory income tax rates to the Company’s pre-tax income for the year ended March 31, 2025 as follows:

  

   March 31,
2025		 
    US$ 
Income before income tax expenses   6,692,553 
US federal statutory income tax rate   21%
Income tax calculated at statutory rate   1,405,436 
Decrease in income tax expense resulting from:     
Rate differences in various jurisdictions   (263,156)
Non-deductible expenses   8,882 

Change in valuation allowance of deferred income tax assets

   (43,633)
Additional tax reduction related to HK two-tiered profits tax regime   (21,154)
Income tax expense   1,086,375 

 

During the year ended March 31, 2026, the Company adopted ASU 2023-09. As a result of the adoption, the effective income tax rate for the year ended March 31, 2026 from the US statutory income tax rates as follows:

 

   For the year ended
March 31, 2026		 
   US$   % 
US Federal Statutory Tax Rate   2,104,026    21.0%
           
State and local income taxes, net of federal income tax effect   
—
    0.0%
Foreign tax effects:          
Hong Kong          
Effect of rates different than statutory   (456,118)   -26.1%
Non-deductible items   115,500    6.7%
Hong Kong two-tier tax regime benefit and exempt interest income   (40,628)   -2.4%

Change in valuation allowance of deferred income tax assets

   5,255    9.2%
Total income tax expenses and effective tax rate   1,728,035    18.7%

 

Income Taxes Paid

 

The amount of cash paid for income taxes (net of refunds) for the fiscal year ended March 31, 2026 is as follows:

 

    For the year ended March 31, 2026   
    US$  
United States   —  
Foreign (Hong Kong)     2,208,238  
Total income taxes paid, net of refunds     2,208,238  

The tax effect of temporary differences that gives rise to significant portions of the deferred tax assets and liabilities are presented below:

 

   March 31,
2026		   March 31,
2025		 
   US$   US$ 
Deferred tax assets:        
Net operating loss carryforwards   159,141    164,396 
Gross deferred tax assets   159,141    164,396 
Less valuation allowance   (159,141)   (164,396)
Total deferred tax assets   
-
    
-
 
           
Deferred tax liabilities:          
Gross deferred tax liabilities   
-
    
-
 
Net deferred tax asset   
-
    
-
 

 

As of March 31, 2026 and 2025, there was net operating loss (“NOL”) carryforward in the United States of $473,779 and $314,637 respectively and they can be carried forward indefinitely. Fully valuation allowance has been provided to these NOLs as of March 31, 2026 and 2025 as the Company did not believe these NOLs will more likely than not be realized in foreseeable future.

 

Uncertain tax positions

 

The Company evaluates each 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 March 31, 2026, the Company did not have any significant unrecognized uncertain tax positions.