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INCOME TAXES
 12 Months Ended
Mar. 31, 2026
INCOME TAXES  
INCOME TAXES

NOTE 16 – INCOME TAXES

 

Income Tax Expense

 

Cayman Islands

The Company is incorporated in the Cayman Islands. Under current Cayman Islands law, the Company is not subject to income, corporation or capital gains tax, and no Cayman Islands withholding tax applies to dividends paid by the Company.

 

United States

 

The Company’s U.S. corporate subsidiaries are subject to U.S. federal income tax at 21% and applicable state and local taxes. Current federal and state income tax expense for the fiscal year ended March 31, 2026 was $107,286 and $2,658, respectively.

 

People’s Republic of China

The Company’s PRC subsidiary is generally subject to PRC enterprise income tax at 25%. No material PRC current income tax expense was recognized for the fiscal year ended March 31, 2026.

 

Hong Kong

The Company’s Hong Kong subsidiary is subject to Hong Kong profits tax under the two-tiered regime, generally at 8.25% on the first HK$2 million of assessable profits and 16.5% on assessable profits above that amount, subject to the connected-entity rules. No material Hong Kong current income tax expense was recognized for the fiscal year ended March 31, 2026.

 

 

 

For the year ended

March 31, 2026

 

Federal current tax

 

$107,286

 

State current tax

 

 

2,658

 

Foreign current tax

 

 

-

 

Deferred tax expense

 

 

1,128,900

 

Income tax expense

 

$1,238,844

 

 

Deferred Tax Assets and Liabilities

 

 

 

As of March 31,

2026

 

Deductible temporary differences

 

$55,508

 

Net operating loss carry forwards

 

 

973,514

 

Gross deferred tax assets

 

 

1,029,022

 

Less: valuation allowance

 

 

(1,029,022)

Net deferred tax assets

 

$-

 

Customer relationships

 

 

(1,128,900)

Gross deferred tax liabilities

 

 

(1,128,900)

Net deferred tax liability

 

$(1,128,900)

 

Deferred tax assets and liabilities are evaluated separately for each tax-paying component and are offset only when the applicable offsetting criteria are met within the same tax jurisdiction and tax-paying component.

 

Uncertain Tax Positions

The Company recognizes a tax benefit from an uncertain tax position only when it is more likely than not that the position will be sustained upon examination. As of March 31, 2026 and 2025, the Company had no significant unrecognized tax benefits and had not accrued interest or penalties related to uncertain tax positions. U.S. federal income tax returns are generally subject to examination for three years, and state income tax returns generally for three to four years. Under PRC law, the statute of limitations is generally three years, may be extended to five years in specified circumstances and is ten years for transfer-pricing matters; there is no limitation for tax evasion. Hong Kong tax returns are generally subject to examination for six years.