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

12. Income Taxes

 

Cayman Islands and British Virgin Islands

 

Pursuant to the current rules and regulations, the Cayman Islands and British Virgin Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. Therefore, the Company is not subject to any income tax in the Cayman Islands or British Virgin Islands.

 

Hong Kong

 

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income.

 

On 21 March 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the “Bill”) which introduces the two-tiered profits tax rates regime. The Bill was signed into law on 28 March 2018 and was gazetted on the following day. Under the two-tiered profits tax rates regime, the first HKD2 million of estimated assessable profits of the qualifying group entity will be taxed at 8.25%, and estimated assessable profits above HKD2 million will be taxed at 16.5%. The profits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a flat rate of 16.5%.

 

The components of the income tax expense (benefit) are as follows:

 

   2026   2025   2024 
   For the years ended March 31, 
   2026   2025   2024 
   USD   USD   USD 
Current               
Cayman Islands   -    -    - 
British Virgin Islands   -    -    - 
Hong Kong   -    276,574    230,304 
Current               
Deferred               
Cayman Islands   -    -    - 
British Virgin Islands   -    -    - 
Hong Kong   (2,385)   (5,903)   (47,237)
Deferred               
Total   (2,385)   270,671    183,067 

 

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:

 

   2026   2025 
   As of March 31, 
   2026   2025 
   USD   USD 
Deferred tax assets          
Provision for allowance of credit losses   9,077    10,176 
Long service payment obligation   1,779    1,093 
Deferred tax assets, net   10,856    11,269 
Deferred tax liabilities          
Plant and equipment, net   (1,367)   (4,165)
Deferred tax liabilities, net   (1,367)   (4,165)
Deferred tax assets, net   9,489    7,104 

 

 

PHOENIX ASIA HOLDINGS Limited and its subsidiaries
Notes to Consolidated Financial Statements

 

12. Income Taxes (cont.)

 

The reconciliation of income tax rate to the effective income tax rate based on income before income taxes for the years ended March 31, 2026, 2025 and 2024 are as follows:

 

   2026   2025   2024 
   For the years ended March 31, 
   2026   2025   2024 
   USD   USD   USD 
(Loss) / Income before income taxes   (1,203,345)   1,296,989    1,239,650 
Hong Kong Profits Tax rate   16.5%   16.5%   16.5%
Income taxes computed at Hong Kong Profits Tax rate   

(198,552

)   214,003    204,542 
                
Reconciling items:               
Tax effect of income that is not taxable*   (76)   (10)   (4)
Tax effect of expense that is not deductible   

168,330

    78,025    68 

Tax losses not recognized

   27,913    -    - 
Effect of two-tier tax rate   -   (21,154)   (21,154)
Statutory tax deduction# (tax holiday)   -   (192)   (385)
Income tax (credit) / expense   (2,385)   270,671    183,067 

 

* Income that is not taxable mainly consisted of the government subsidies which are non-taxable under Hong Kong income tax law.

 

# It represents a reduction granted by the Hong Kong SAR Government of 100% of the tax payable subject to a maximum reduction of HKD3,000 (2025: HKD1,500) for each business.

 

Uncertain tax positions

 

The Company evaluates the uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2026, 2025 and 2024, 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 years ended March 31, 2026, 2025 and 2024 and also did not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from March 31, 2026.