INCOME TAXES

12 Months Ended

Dec. 31, 2025

NOTE 13: INCOME TAXES

The provision for income taxes consisted of the following:

	2025		2024
	Years ended December 31,
	2025		2024

Current tax	$	-	$	836
Deferred tax		-		-
Income tax expense	$	-	$	836

The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company operates in various countries: United States of America, Hong Kong and the PRC that are subject to taxes in the jurisdictions in which they operate, as follows:

United States of America

CFOO is registered in the State of Delaware and is subject to US federal corporate income tax. The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were not material to its results of operations for the years presented.

For the years ended December 31, 2025 and 2024, the Company did not have any interest and penalties associated with tax positions. As of December 31, 2025 and 2024, the Company has not accrued any penalties on uncertain tax positions.

As of December 31, 2025, the operation in the United States incurred $189,025 of cumulative net operating losses which can be carried forward indefinitely to offset future taxable income.

BVI

ECGL is incorporated in the British Virgin Islands and is not subject to taxation. In addition, upon payments of dividends by these entities to their shareholder, no British Virgin Islands withholding tax will be imposed.

Hong Kong

AWL operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the years ended December 31, 2025 and 2024 is as follows:

	2025			2024
	Years ended December 31,
	2025			2024

Loss before income taxes	$	(149,505	)	$	(158,218	)
Statutory income tax rate		8.25	%		8.25	%
Income tax expense at statutory rate		(12,334	)		(13,053	)
Tax adjustments		11			656
Net operating loss		12,323			13,333
Income tax expense	$	-		$	936

The PRC

GXXH operating in the PRC is subject to the Corporate Income Tax Law of the People’s Republic of China at a unified income tax rate of 25%. The reconciliation of income tax rate to the effective income tax rate for the years ended December 31, 2025 and 2024 is as follows:

	2025			2024
	Years ended December 31,
	2025			2024

Loss before income taxes	$	(172,895	)	$	(207,619	)
Statutory income tax rate		25	%		25	%
Income tax expense at statutory rate		(43,224	)		(51,905	)
Net operating loss		43,224			51,905
Income tax expense	$	-		$	-

The following table sets forth the significant components of the deferred tax assets of the Company as of December 31, 2025 and 2024:

SCHEDULE OF DEFERRED TAX ASSETS

	2025			2024
	As of December 31,
	2025			2024
Deferred tax assets:
Net operating loss carryforwards
- United States	$	189,025		$	173,008
- Hong Kong		42,616			30,293
- PRC		448,052			404,828
Net operating loss carryforwards		679,693			608,129
Less: valuation allowance		(679,693	)		(608,129	)
Deferred tax assets, net	$	-		$	-

The Company recognizes interest and penalties, if applicable, related to uncertain tax positions in the income tax provision. There were no reserves for unrecognized tax benefits and no accrued interest related to uncertain tax positions as of December 31, 2025 and 2024.

The Company files income tax returns in U.S. federal, U.S. state and foreign jurisdictions. With some exceptions, most tax years remain open to examination by the taxing authorities due to the Company’s NOL carryforwards.

Total net operating losses (NOLs) carryforwards of the Company’s subsidiaries in mainland China are $43,224 and $51,901 as of December 31, 2025 and 2024, respectively. As of December 31, 2025, net operating loss carry-forwards from PRC will expire in calendar years 2028 through 2035, if not utilized.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

China Foods Holdings Ltd. 10-K