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

NOTE 8 － INCOME TAX EXPENSE

 

The provision for income tax expense consisted of the following:

 

SCHEDULE OF PROVISION FOR INCOME TAX EXPENSE 

   2025   2026   2026 
   Six months ended March 31, 
   2025   2026   2026 
   HKD   HKD   USD 
             
Current income tax  $671,009   $-   $- 
Deferred income tax   -    -    - 
                
Income tax expense  $671,009   $-   $- 

 

The effective tax rate in the periods 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 mainly operates in Hong Kong that are 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.

 

British Virgin Islands

 

Beta Alpha is incorporated in the British Virgin Islands and is not subject to taxation. In addition, upon payments of dividends by these entities to their shareholder, no British Virgin Islands withholding tax will be imposed.

 

Hong Kong

 

707IL and BXF are operating in Hong Kong and are subject to the Hong Kong profits tax at the two-tiered income tax rates at the rate of 8.25% on the estimated assessable income up to HK$2,000,000 and 16.5% on any part of assessable income over HK$2,000,000 arising in Hong Kong during its tax year.

 

 

707 CAYMAN HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED MARCH 31, 2026 AND 2025

 

The reconciliation of the differences between income tax expense computed by applying Hong Kong income tax rate of 16.5% and the Company’s income tax expense recorded for the six months ended March 31, 2025 and 2026, are as follows:

 

SCHEDULE OF RECONCILIATION OF INCOME TAX RATE 

                     
   Six Months ended March 31, 
   2025   2026 
   HKD  

% of Pre-tax

income

   HKD   USD  

% of Pre-tax

income

 
                     
Computed expected income tax expense (benefit)  $690,243    16.50%  $(12,603,703)  $(1,607,615)   16.50%
Income exempted from tax   (126)   0.00%   (71,935)   (9,175)   0.09%
Effect of differential tax rate – foreign subsidiaries (Note i)   -    -    857,004    109,311    (1.12)%
Non-deductible expenses for tax purpose   143,891    3.44%   17,667    2,253    (0.02)%
Non-deductible share-based compensation expenses   -    -    10,876,115    1,387,260    (14.24)%
Net operating loss   -    -    929,455    118,553    (1.22)%
Others   (162,999)   (3.90)%   (4,603)   (587)   0.01%
Income tax expense  $671,009    16.04%  $-   $-    0.00%

 

Note :

 

  (i) Represents the foreign income tax rate differential when compared to Hong Kong income tax rate for the six months ended March 31, 2026 and 2025.

 

The following table sets forth the significant components of the deferred tax assets of the Company as of September 30, 2025 and March 31, 2026.

SCHEDULE SIGNIFICANT COMPONENTS OF THE DEFERRED TAX ASSETS

   2025   2026   2026 
   As of 
   September 30,   March 31,   March 31, 
   2025   2026   2026 
   HKD   HKD   USD 
Deferred tax assets:                     
Net operating loss carryforwards from               
Hong Kong   -    929,455    118,553 
Less: valuation allowance   -    (929,455)   (118,553)
Deferred Tax Assets Net  $-   $-   $- 

 

The movements of valuation allowance of deferred tax assets are as follows:

SCHEDULE VALUATION ALLOWANCE OF DEFERRED TAX ASSETS

             
   As of 
   September 30,   March 31,   March 31, 
   2025   2026   2026 
   HKD   HKD   USD 
Balance at beginning of the period  -   -   - 
Additions          -    929,455    118,553 
Balance at end of the period  $-   $929,455   $118,553 

 

As of September 30, 2025 and March 31, 2026, the Company incurred the aggregate of HK$nil and HK$5,633,065 (US$718,503) of cumulative net operating losses which can be carried forward to offset future taxable income. There is no expiry in net operating loss carryforwards under Hong Kong tax regimes.

 

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 September 30, 2025 and March 31, 2026, 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 six months ended March 31, 2025 and 2026, and also did not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from March 31, 2026.

 

 

707 CAYMAN HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED MARCH 31, 2026 AND 2025