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INCOME TAXES
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES

10. INCOME TAXES

 

British Virgin Islands

 

Under the current laws of the British Virgin Islands, the Company and other BVI incorporated subsidiaries are not subject to any income tax.

 

Hong Kong

 

All Hong Kong incorporated subsidiaries are incorporated in Hong Kong and are subject to Hong Kong profits tax. Under the two-tiered profit tax rate regime of Hong Kong Profits Tax, the first HKD2,000,000 (US$256,410), of profits of the qualifying group entity is taxed at 8.25%, and profits above HKD2,000,000 (US$256,410) are 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 income tax provision consists of the following:

 

            2025 
  

Six months

ended June 30,

  

Year

ended June 30,

   Year Ended June 30, 
   2024   2025   2026   2026 
   HKD   HKD   HKD   US$ 
Current tax   393,240    213,989    103,789    13,306 
Deferred tax   —    (27,838)   (400,479)   (51,343)
Income tax expense (credit)   393,240    186,151    (296,690)   (38,037)

 

 

CLICK HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

10. INCOME TAXES (cont.)

 

The following is a reconciliation of the Company’s income tax expense (credit) to income (loss) before provision for income taxes for the six months ended June 30, 2024 and the years ended June 30, 2025 and 2026.

 

            2026 
  

Six months

ended June 30,

  

Year

ended June 30,

   Year Ended June 30, 
   2024   2025   2026   2026 
   HKD   HKD   HKD   US$ 
Income (loss) before provision for income taxes   4,042,361    (7,750,311)   14,323,156    1,836,301 
                     
Tax (benefit) at the domestic income tax rate   666,990    (1,278,801)   2,363,320    302,990 
Effect of Hong Kong graduated rates   (165,000)   (165,000)   (149,473)   (19,163)
Effect of non-deductible expenses   5,764    1,678,075    9,854    1,264 
Effect of non-taxable income   (27,028)   (3,448)   (2,464,664)   (315,983)
Effect of utilization of tax losses brought forward   (87,486)   (44,675)   (162,621)   (20,849)
Effect of tax losses not recognized   —    —    106,894    13,704 
Income tax expense (credit)   393,240    186,151    (296,690)   (38,037)

 

Deferred tax assets and deferred tax liabilities

 

The principal components of deferred tax assets are as follows:

 

         2026 
   As of June 30, 
   2025   2026   2026 
   HKD   HKD   US$ 
Net operating loss carrying forwards   229,869    179,241    22,980 
Less: valuation allowance   (229,869)   (179,241)   (22,980)
Total deferred tax assets   —    —    — 

 

As of June 30, 2025 and 2026, the Company had net operating loss (“NOL”) carry forwards of HKD1,393,145 and HKD1,086,308 (US$139,270), respectively, attributable to the Hong Kong subsidiaries. The cumulative tax losses for entities in Hong Kong will not expire under the current tax legislation. The Company evaluates its valuation allowance requirements at the end of each reporting period by reviewing all available evidence, both positive and negative, and considering whether, based on the weight of that evidence, a valuation allowance is needed.

 

When circumstances cause a change in management’s judgement about the realizability of deferred tax assets, the impact of the change on the valuation allowance is generally reflected in income from operations. The future realization of the tax benefit of an existing deductible temporary difference ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryforward period available under applicable tax law. Since the Company considers it more likely than not that those subsidiaries will not generate sufficient pre-tax profit within the carryforward period available under applicable tax law, a full valuation allowance was recognized as of June 30, 2025 and 2026, respectively.

 

The principal components of deferred tax liabilities are as follows:

 

         2026 
   As of June 30, 
   2025   2026   2026 
   HKD   HKD   US$ 
Intangible assets arisen from business combination   5,128,412    10,457,063    1,340,649 
                
Total deferred tax liabilities   5,128,412    10,457,063    1,340,649 

 

Below is an analysis of the movements in the deferred tax liabilities:

 

         2026 
  

Year

ended June 30,

  

Year Ended

June 30,

 
   2025   2026   2026 
   HKD   HKD   US$ 
Balance at beginning of the years   —    5,128,412    657,489 
Additions arising from business combination   5,156,250    5,729,130    734,503 
Credit to profit or loss   (27,838)   (400,479)   (51,343)
Balance at end of the years   5,128,412    10,457,063    1,340,649 

 

 

CLICK HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS