v3.26.3
Taxes
 6 Months Ended
Jun. 30, 2026
Taxes [Abstract]  
TAXES

NOTE 12 — TAXES

 

Corporate Income Taxes (“CIT”)

 

The income before taxes by geographic area is as follows:

 

Loss before taxes:   For the
Six Months
 Ended
June 30,
2026		     For the
Six Months
 Ended
June 30,
2025		  
             
China   $ (1,384,896 )   $ (754,674 )
Japan     (272,171 )     1,184,949  
USA     753,504       (26,085 )
Germany     (122,381 )     (26,310 )
Cayman     (15,713,828 )     (9,044,435 )
Singapore     (92,269 )     —  
Total loss before taxes   $ (16,832,041 )   $ (8,666,555 )

 

The components of the income tax provision are as follows:

 

    For the
Six Months
 Ended
June 30,
2026		     For the
Six Months
 Ended
June 30,
2025		  
             
Current income tax expense   $ 214,016     $ 256,389  
Deferred income tax expense     (394,377 )     (191,703 )
Total (benefit) provision for income taxes   $ (180,361 )   $ 64,686  

 

The following table reconciles the PRC statutory rate to the Company’s effective tax rate:

 

    For the
Six Months
 Ended
June 30,
2026		     For the
Six Months
 Ended
June 30,
2025		  
             
PRC statutory tax rate     25 %     25 %
Effect of different tax jurisdiction     (23.4 )%     (24.3 )%
Non-deductible items*     (0.5 )%     (1.4 )%
Effective tax rate     1.1 %     (0.7 )%

 

* Non-deductible items represent excess expenses and losses not deductible for PRC tax purpose.

 

The following table summarizes deferred tax assets and liabilities resulting from differences between financial accounting basis and tax basis of assets and liabilities:

 

    June 30,
2026		     December 31,
2025		  
             
Deferred tax assets:            
Allowance for credit losses   $ 448,038     $ 258,510  
Net operating losses     646,305       426,337  
Total deferred tax assets   $ 1,094,343     $ 684,847  

 

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. Management considers the cumulative earnings and projected future taxable income in making this assessment. Recovery of substantially all of the Company’s deferred tax assets is dependent upon the generation of future income, exclusive of reversing taxable temporary differences. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets as of June 30, 2026.

 

Taxes payable

 

Taxes payable consists of the following:

 

    June 30,
2026		     December 31,
2025		  
             
Income tax payable   $ 538,952     $ 399,156  
VAT payable     628,806       482,587  
Other taxes payable     —       2,951  
Total taxes payable   $ 1,167,758     $ 884,694