v3.26.1
Income Tax
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
INCOME TAX

13. income tax

 

The Company and its subsidiaries file separate income tax returns.

 

In general, all of the tax returns of the Company’s HK entities remain subject to examination by the tax authorities for up to six years from the date of filing. The Company may also be subject to the examinations of the tax filings in other jurisdictions, which are not material to the consolidated financial statements.

 

Cayman Islands

 

Under the current laws of the Cayman Islands, the Company and its subsidiaries in Cayman Islands are not subject to tax on its income or capital gains. In addition, upon any payment of dividends by the Company, no Cayman Islands withholding tax is imposed.

 

British Virgin Islands

 

Under the current laws of the British Virgin Islands(“BVI”), the Company’s subsidiary in BVI is not subject to tax on its income or capital gains. In addition, upon any payment of dividends by the Company, no British Virgin Islands withholding tax is imposed.

 

Hong Kong

 

The Company’s subsidiaries established in Hong Kong are subject to Hong Kong profits tax at a rate of 16.5% on their taxable income generated from operations in Hong Kong before April 1, 2018. Starting from the financial year commencing on April 1, 2018, the two-tiered profits tax regime took effect, under which the tax rate is 8.25% for assessable profits on the first HK$2 million and 16.5% for any assessable profits in excess of HK$2 million.

 

Vietnam

 

Under the current tax laws in Vietnam, the Company’s subsidiary in Vietnam is subject to a corporate income tax rate of 20%. Additionally, the subsidiary in Vietnam is currently enjoying a preferential tax treatment of “two years of tax exemption followed by four years of 50% tax reduction” for its taxable income.

 

Composition of income tax expenses

 

The following table sets forth current and deferred portion of income tax expenses:

 

    For the years ended
March 31,		  
    2024     2025     2026  
    USD     USD     USD  
Current income tax expenses     139,269       657,621       796,741  
Deferred income tax expense (recovery)     (12,428 )     (55 )     (4,870 )
Income tax expense     126,841       657,566       791,871  

 

Income before income taxes for the year ended March 31, 2026 were taxed within the following jurisdictions:

 

    For the
year ended
March 31,
2026		  
    USD  
Pre-tax income/(loss) from Hong Kong entities     5,281,512  
Pre-tax income/(loss) from Vietnam entity     43,934  
Pre-tax income/(loss) from Cayman & BVI entities     (1,726,569 )
Income/(loss) before income taxes     3,598,877  

 

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

 

The Company adopted ASU 2023-09 on a prospective basis. Pursuant to the disclosure requirements of ASU 2023-09, a reconciliation of the Hong Kong statutory income tax rate to the Company’s effective tax rate for the year ended March 31, 2026, is as follow

 

    For the year ended
March 31, 2026		  
  USD     %  
Hong Kong statutory income tax rate     593,815       16.5  
Foreign Tax Effects                
—Statutory tax rate difference between HK and Vietnam     (2,856 )     -0.1  
—Statutory tax rate difference between HK and Cayman & BVI     284,884       7.9  
Change in valuation allowance     (33,023 )     -0.9  
Nontaxable or Nondeductible Items                
—Non-taxable income     (72,882 )     -2.0  
Tax credit allowed by Hong Kong government     (21,538 )     -0.6  
Others     43,471       1.2  
Effective tax rate     791,871       22  

 

Cash paid for income taxes, net of refunds, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended March 31,2026 is as follows:

 

    For the
year ended
March 31,
2026		  
      USD  
Hong Kong taxes     1,038,785  

 

Reconciliation between the income tax expenses computed applying the Hong Kong and Vietnam enterprise tax rate to income before income taxes and actual provision were as follows:

 

    For the years ended
March 31,		  
    2024     2025  
    USD     USD  
Income before income tax     910,501       3,169,906  
Caymen Islands statutory income tax rate     0 %     0 %
Income tax calculated at statutory rate     —       —  
(Increase)/decrease in income tax expense resulting from:                
Rate differences in various jurisdictions     150,233       722,893  
Tax effect of non-taxable income     (6,736 )     (49,833 )
Tax effect of non-deductible expenditure     17,310       11,374  
Tax reduction allowed by Hong Kong government(1)     (21,538 )     (21,154 )
Tax effect of deductible temporary difference     (12,428 )     (5,714 )
Income tax expense     126,841       657,566  

 

(1) One-off tax reduction provided by the Hong Kong government.

 

    As of
March 31,		  
    2025     2026  
    USD     USD  
Deferred tax assets     92,026       96,896  
Deferred tax liabilities     —       —  
Deferred tax assets, net     92,026       96,896  

 

The significant components of the Company’s deferred tax assets and liabilities are as follows:

 

    As of
March 31,		  
    2025     2026  
    USD     USD  
Deferred tax assets:            
Property, plant and equipment     (22,885 )     (26,700 )
Inventory write-down     78,705       111,606  
Allowance for credit loss     3,761       3,761  
Impairment provision for marketable debt securities     32,445       -  
Tax loss carryforwards     33,023       8,229  
Total deferred tax assets     125,049       96,896  
Less: Valuation allowance     33,023       -  
Net deferred tax assets     92,026       96,896