Income Taxes

12 Months Ended

Mar. 31, 2025

5. Income Taxes

Hong Kong

Under the current Hong Kong Inland Revenue Ordinance, the Company’s Hong Kong subsidiaries are subject to a 16.5% income tax on their taxable income generated from operations in Hong Kong. On December 29, 2017, Hong Kong government announced a two-tiered profit tax rate regime. Under the two-tiered tax rate regime, the first HK$2.0 million assessable profits will be subject to a lower tax rate of 8.25% and the excessive taxable income will continue to be taxed at the existing 16.5% tax rate. The two-tiered tax regime becomes effective from the assessment year of 2018/2019, which was on or after April 1, 2018. The application of the two-tiered rates is restricted to only one nominated enterprise among connected entities.

BVI

Under the current laws of the BVI, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no BVI withholding tax will be imposed.

Cyprus

Under the current laws of the Cyprus, the Company’s Cyprus subsidiary is subject to a standard income tax rate of 12.5% on income accrued or derived from all sources in Cyprus and abroad.

Under the current Florida state and US federal income tax, the Company does not need to pay income taxes as Florida state does not levy income tax. The federal income tax is based on a flat rate of 21% for the calendar year of 2025 (2024: 21%).

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

The Company operates in serval tax jurisdictions. Therefore, its income is subject to various rates of taxation. The income tax expense differs from the amount that would have resulted from applying the US statutory income tax rates to the Company’s pre-tax income as follows:

	March 31, 2025		March 31, 2024
	US$		US$
Income before income tax expenses	5,909,713		1,873,581
US federal statutory income tax rate	21	%	21	%
Income tax calculated at statutory rate	1,241,040		393,452
Decrease in income tax expense resulting from:
Rate differences in various jurisdictions	22,003		(14,208)
Non-deductible expenses	8,882		7,481
Loss carried forward	(164,396	)	(50,107	)
Additional tax reduction related to HK two-tiered profits tax regime	(21,154	)	(27,575	)
Income tax expense	1,086,375		309,043

As of March 31, 2025 and 2024, there was net operating loss (“NOL”) carryforward of $314,637 and $150,241 respectively and they can be carried forward indefinitely. Fully valuation allowance has been provided to these NOLs as of March 31, 2025 and 2024 as the Company did not believe these NOLs will more likely than not be realized in foreseeable future.

Uncertain tax positions

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2025, the Company did not have any significant unrecognized uncertain tax positions.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

QDM International Inc. S-1/A