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 March 21, 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 March 28, 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%.

 

Hong Kong profits tax has been provided in accordance with the two-tiered profits tax regime on the estimated assessable profits arising in Hong Kong during the years ended March 31, 2026 and 2024.

 

No provision has been made for Hong Kong Profits Tax in the financial statements as the Group did not have estimated assessable profits arising in Hong Kong for the year ended March 31, 2025.

 

 

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   211,105    -    649,119 
Current   211,105    -    649,119 
                
Deferred               
Cayman Islands   -    -    - 
British Virgin Islands   -    -    - 
Hong Kong   (197,270)   (80,154)   (183)
Deferred   (197,270)   (80,154)   (183)
                
Total   13,835    (80,154)   648,936 

 

The Company measures deferred tax assets and liabilities based on the difference between the financial reporting and tax bases of assets and liabilities at the applicable tax rates. Deferred tax assets are reduced by a valuation allowance when, based on available evidence, it is more likely than not that some portion or all of the asset will not be realized. Components of the Company’s deferred tax asset and liability are as follows:

 

   2026   2025 
   As of March 31, 
   2026   2025 
   USD   USD 
MSE:          
Net operating loss carryforward   281,951    281,951 
Total deferred tax assets   281,951    281,951 
Less: valuation allowance   (281,951)   (281,951)
Deferred tax assets, net   -    - 
           
MSHK:          
Property and equipment   (61,692)   (68,449)
Finance lease right-of-use assets, net   (12,996)   (16,982)
Operating lease right-of-use assets, net   

(6,746

)   - 
Operating lease liabilities   6,746    - 
Net operating loss carryforward   1,261,843    409,297 
Less: valuation allowance   (1,261,843)   (409,297)
Total deferred tax liabilities   (74,688)   (85,431)
Deferred tax assets - provision for allowance of credit losses   351,384    164,857 
Deferred tax assets, net   276,696    79,426 
           
Deferred tax assets, net   276,696    79,426 

 

As of March 31, 2026 and 2025, the Company had net operating loss carry forward of USD9,356,327 (HKD72,979,348) and USD4,189,379 (HKD32,677,157), respectively. These losses can offset future taxable income and can be carried forward indefinitely. As of March 31, 2026 and 2025, management considers evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The Company believed that it was more likely than not that it will be unable to fully utilize its deferred tax assets related to the net operating loss carry forward in Hong Kong. As a result, the valuation allowance of USD1,543,794 and USD785,934 was recorded against the gross deferred tax asset balance at March 31, 2026 and 2025, respectively. For the years ended March 31, 2026, 2025 and 2024, no net operating loss carry forward has been utilized.

 

 

No material deferred tax asset has been recognized in respect of net operating loss carry forward as of March 31, 2026 and 2025, due to the unpredictability of future profit streams.

 

   2026   2025   2024 
   For the years ended March 31, 
   2026   2025   2024 
   USD   USD   USD 
             
(Loss) Profit before income taxes   (5,749,910)   (5,810,905)   2,975,533 
Hong Kong Profits Tax rate   16.5%   16.5%   16.5%
Income taxes computed at Hong Kong Profits Tax rate   (948,735)   (958,799)   490,963 
                
Reconciling items:               
Tax effect of income that is not taxable*   (16,470)   (1,478)   (25)
Tax effect of non-deductible expenditure   120,414    371,984    90,539 
Tax effect of temporary differences not recognized   27,619    98,842    - 
Change in valuation allowance   852,546    409,297    88,998 
Effect of two-tier tax rate   (21,154)   -    (21,154)
Statutory tax deduction#   (385)   -    (385)
Income tax expense (benefit)   13,835    (80,154)   648,936 

 

* Income that is not taxable mainly consisted of the bank interest income which is 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) (2024: HKD3,000) for each business.