v3.26.1
Taxes
 12 Months Ended
Dec. 31, 2025
Taxes [Abstract]  
Taxes

Note 15 – Taxes

 

Corporation Income Tax (“CIT”)

 

The Company is subject to income taxes on an entity basis on income derived from the location in which each entity is domiciled.

 

Jowell Global is incorporated in the Cayman Islands as an offshore holding company and is not subject to tax on income or capital gain under the laws of the Cayman Islands.

 

Jowell Tech is incorporated in Hong Kong as a holding company with no activities. Under Hong Kong’s two-tier tax rates regime, the first 2 million Hong Kong Dollar (“HKD”) of profits will be taxed at 8.25%, and the profits above HKD2 million will be taxed at 16.5%. Jowell Tech is not subject to income tax for 2024, 2023 and 2022 because it had no activities within the three years.

 

Under the Enterprise Income Tax (“EIT”) Law of PRC, domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. Each of Shanghai Jowell and Shanghai Juhao is subject to income tax at unified rate of 25%.

 

The income taxes expense (benefit) consists of the following:

 

   For the years ended December 31, 
   2025   2024   2023 
             
Current income tax expense (benefit)  $70   $(2,506)  $5,355 
Deferred income taxes expense   478,411    30,582    129,761 
Total  $478,481   $28,076   $135,116 

 

Loss before provision for income taxes is attributable to the following geographic locations:

 

   For the years ended December 31, 
   2025   2024   2023 
             
PRC  $(4,748,506)  $(7,378,833)  $(10,597,746)
Cayman and Hong Kong   (1,051,439)   (595,735)   (787,071)
Total  $(5,799,945)  $(7,974,568)  $(11,384,817)

 

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

 

   For the years ended December 31, 
   2025   2024   2023 
             
China Statutory income tax rate   25.0%   25.0%   25.0%
Effect of different tax rates in other jurisdictions   (5.6)%   (1.9)%   (1.7)%
Change of valuation allowance   (27.2)%   (23.3)%   (24.2)%
Non-deductible expenses-permanent difference   (0.5)%   (0.2)%   (0.2)%
Effective tax rate   (8.3)%   (0.4)%   (1.2)%

Components of deferred tax assets was as follows:

 

   December 31,   December 31, 
   2025   2024 
Deferred tax assets:        
Net operating loss carryforward  $7,413,930   $7,230,751 
Inventory reserve   264,806    288,014 
Allowance for credit losses   192,051    189,473 
Valuation allowance   (7,868,635)   (7,230,751)
Total  $2,152   $477,487 

 

As of December 31, 2025 and 2024, the valuation allowance was $7,868,635 and $7,230,751, respectively. The Company’s management reviews this valuation allowance periodically and makes adjustments as necessary.

 

Taxes Payable

 

The Company’s taxes payable consists of the following:

 

   December 31,
2025		   December 31,
2024		 
         
VAT tax payable  $71,777   $15,579 
Income tax payable   70    
-
 
Other taxes payable   15,750    55,583 
Total  $87,597   $71,162