v3.26.1
INCOME TAX
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
INCOME TAX

14.        INCOME TAX

 

The provision for income taxes consisted of the following:

             
   Six Months ended June 30,
   2026  2025
       
Current:          
- Local (US tax regime)  $–   $– 
- Foreign   36,251    17,138 
           
Deferred:          
- Local   –    – 
- Foreign   –    – 
           
Income tax expense  $36,251   $17,138 

 

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:

 

United States of America

 

MVNC is registered in the State of Nevada and is subject to the tax laws of United States of America.

 

BVI

 

Under the current BVI law, UWMC is not subject to tax on income.

 

Hong Kong

 

The Company’s subsidiaries operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current period, after deducting a tax concession for the tax year.

 

The reconciliation of income tax computed by applying U.S. federal income tax rate of 21% to the actual income tax expense at the Company’s effective rate is as follows:

            
   Six Months ended June 30,
   2026  2025
   Amount  Percent  Amount  Percent
Computed “expected” tax expense  $44,340    21.0 %   $27,702    21.0 % 
Effect of differential tax rate – foreign subsidiaries (Note i)   (17,503)   (8.3)%    (11,251)   (8.5)% 
Tax credits:                    
Income not subject to taxes   –    0.0 %    –    0.0 % 
Expenses not subject to tax deduction   37,341    17.7 %    24,804    18.8 % 
Changes in unrecognized tax benefits   (27,927)   (13.2)%    (24,117)   (18.3)% 
Income tax expense  $36,251    17.2 %   $17,138    13.0 % 

 

Note :

  (i) Represents the foreign income tax rate differential when compared to U.S. statutory income tax rate for the six months ended June 30, 2026 and 2025.

 

The following table sets forth the significant components of the deferred tax assets of the Company as of June 30, 2026 and December 31, 2025:

      
   As of
  

June 30,

2026

 

December 31,

2025

       
Deferred tax assets:          
NOL – US tax regime  $90,640   $897 
NOL – British Virgin Islands regime   –    – 
NOL – Hong Kong tax regime   –    5,524 
    90,640    6,421 
Less: valuation allowance   (90,640)   (6,421)
Deferred tax assets, net  $–   $– 

 

As of June 30, 2026, the Company had US net operating loss (“NOL”) carryforwards of approximately $90,640, which are available to offset future taxable income. These NOL carryforwards expire in varying amounts beginning in 2026 through 2045. The Company has recorded a full valuation allowance against its deferred tax assets, as management has determined that it is more likely than not that the tax benefits associated with these deferred tax assets will not be realized.

 

As of June 30, 2026, the Company had no cumulative net operating losses under Hong Kong tax regime, which can be carried forward to offset future taxable income at no expiry.

 

The following table summarizes the changes in the valuation allowance for deferred tax assets:

   
Balance, December 31, 2025  $6,421 
Addition during the period   84,219 
Balance, June 30, 2026  $90,640 

 

Valuation allowances

 

Deferred taxes as of June 30, 2026 were reduced by a valuation allowance relating to net operating losses. In assessing the likelihood of realizing deferred tax assets, management considers factors such as prior earnings history, expected future earnings and the reversal of existing taxable temporary differences. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Deferred taxes are determined by utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the determination of the appropriate valuation allowances, the Company has considered the most recent projections of future business results and taxable income by jurisdiction. Actual results may vary in comparison to current projections. After consideration of the evidence described above, management believes it is more likely than not that deferred tax assets will not be realized.

 

As of June 30, 2026 and December 31, 2025, the Company had no unrecognized tax benefits. Interest and penalty charges, if any, related to income taxes would be classified as a component of the provision for income taxes in the unaudited condensed consolidated statements of operations. The Company does not expect any significant change in its uncertain tax positions in the next twelve months.