v3.26.3
Taxation
 12 Months Ended
Jun. 30, 2026
Taxation [Abstract]  
TAXATION

18. TAXATION

 

Cayman Islands

 

The Company is incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands.

 

Hong Kong

 

According to Tax (Amendment) (No. 3) Ordinance 2018 published by Hong Kong government, form April 1, 2018, under the two-tiered profits tax rates regime, the profits tax rate for the first HKD2 million of assessable profits will be lowered to 8.25% while the remaining profits will continue to be taxed at the existing tax rate of 16.5%. DSY HK was not subject to Hong Kong profit tax for any period presented as it did not have assessable profit during the years presented.

 

PRC

 

Generally, the Group’s subsidiaries of PRC resident enterprises under PRC tax law, are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of 25%.

 

From January 1, 2023 to December 31, 2027, the State Taxation Administration of the PRC provided a preferential enterprise income tax rate on small-scale and low-profit enterprises whose annual taxable income is less than RMB3 million. For small-scale and low-profit enterprises, the portion of taxable income not exceeding RMB3 million can be counted at a reduced rate of 25%, and the enterprise income tax is calculated at a tax rate of 20%.

 

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The Group adopted the new standard on July 1, 2025 on a prospective basis.

 

The income tax provision consists of the following components:

 

    For the year ended  
    June 30, 2026  
    PRC     Other areas     Total  
    USD     USD     USD  
(Loss)/income before income tax expenses     (2,602,713 )     (1,634,522 )     (4,237,235 )
Current income tax expenses     -       -       -  
Deferred income tax benefit     562,631       -       562,631  
Total income tax benefit     562,631       -       562,631  

 

　   For the years ended  
    June 30,  
　   2025     2024  
　   USD     USD  
Current income tax expenses     (201,629 )     (71,862 )
Deferred income tax (expense)/ benefit     (27,274 )     123,328  
Total income tax (expenses)/ benefit     (228,903 )     51,466  
                 

 

Reconciliation of the differences between statutory tax rate and the effective tax rate:

 

A reconciliation between PRC statutory tax rate of 25% to the Group’s effective income tax rate after the adoption of ASU 2023-09 was as follows:

 

    For the year ended  
    June 30, 2026  
    Amount     Percentage  
    USD     %  
Statutory tax     1,059,309       25.0 %
Foreign tax effects                
Hong Kong     (227,763 )     (5.4 )%
Cayman     (180,868 )     (4.3 )%
Effect of changes in tax laws or rates enacted in the current year     -       - %
Effect of cross-border tax laws     -       - %
Changes in valuation allowance     (93,511 )     (2.2 )%
Nontaxable or nondeductible items                
Non-deductible expenses     (20,057 )     (0.4 )%
Other adjustments                
Effect of tax holidays inside PRC     (166,582 )     (3.9 )
NOL true-up     192,103       4.5 %
Income tax benefit     562,631       13.3 %

 

A reconciliation between PRC statutory tax rate of 25% to the Group’s effective income tax rate for years prior to the adoption of ASU 2023-09 was as follows:

 

　   For the years ended  
    June 30,  
　   2025     2024  
　   USD     USD  
(Loss)/income before income tax expenses     (32,292,178 )     589,019  
Computed income tax expense with statutory tax rate of 25%     8,073,045       (147,255 )
Tax effect of non-deductible items     (7,902,309 )     (10,674 )
Changes in valuation allowance     -       -  
Write-off of net operating losses carried forward     (231,302 )     (72,665 )
Effect of preferential tax rate     (168,337 )     282,060  
Income tax (expense)/benefit     (228,903 )     51,466  

 

Deferred tax assets

 

As of June 30, 2026 and 2025, the significant components of the deferred tax assets are summarized below:

 

    As of June 30,  
    2026     2025  
Deferred tax assets:            
Net operating loss carried forward     1,100,341       355,135  
Impairment of property     137,131       128,034  
Allowance for credit loss     -       701  
Lease Liability     212,849       -  
Net deferred tax liabilities offset     (200,356 )     -  
Valuation allowance     (171,551 )     -  
Total deferred tax assets, net     1,078,414       483,870  

 

    As of June 30,  
    2026     2025  
Deferred tax liabilities:            
ROU assets     (200,356 )     -  
Net deferred tax asset offset     200,356       -  
Total deferred tax liabilities     -       -  

 

As of June 30, 2026 and 2025, the Group had net operating loss carryforwards of approximately $5,811,551 and $1,875,027, respectively, which arose from the Group’s subsidiaries. As of June 30, 2026 and 2025, deferred tax assets from the net operating loss carryforwards amounted to $1,100,341 and $355,135, respectively.

 

Movement of Valuation Allowance

 

The following table shows the movement of valuation allowance for the periods presented:

 

    For the years ended
June 30,		  
    2026     2025     2024  
    USD     USD     USD  
Balance at beginning of the year    -     -      -  
Provision     168,672        -        -  
Foreign exchange effect     2,879       -       -  
Balance at end of the year     171,551       -       -  

 

As of June 30, 2026, net operating loss carryforwards will expire, if unused, in the following amounts:

 

    Amount  
    USD  
2027     1,112,615  
2028     1,102,918  
2029     272,946  
2030     3,323,072  
2031     -  
Total     5,811,551  

  

The Group paid nil of income taxes, net of refund to tax authorities in the year ended June 30, 2026.