v3.26.1
Taxes
 9 Months Ended
Mar. 31, 2026
Taxes [Abstract]  
TAXES

NOTE 14 — TAXES

 

Corporate Income Taxes

 

Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign invested enterprises is 25%.

 

As of March 31, 2026 and June 30, 2025, the Company did not have an accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. For the period ended March 31, 2026 and 2025, no amounts were incurred for income tax uncertainties or interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company’s tax years since its formation remain subject to possible income tax examination by its major taxing authorities for all periods.

 

The provision for income tax for the three months ended March 31, 2026 and 2025 consists of the following:

 

   For the Three Months Ended
March 31,		 
   2026   2025 
Current income tax expense  $84,954    26,608 
Deferred income tax credit   (55,361)   (8,014)
Total income tax expense  $29,593    18,594 

 

The following table reconciles the statutory tax rate to the Company’s effective tax the three months ended March 31, 2026 and 2025:

 

   For the Three Months Ended
March 31,		 
   2026   2025 
Loss before tax  $(1,499,218)  $(358,366)
Statutory state tax rate   21%   21%
Income tax credit at the federal statutory rate   (314,835)   (75,257)
Change in valuation allowance   324,578    70,779 
Tax effect on other tax jurisdiction   (1,038)   1,919 
Non-deductible expense   20,888    21,153 
Total income tax expense  $29,593   $18,594 

 

The provision for income tax for the nine months ended March 31, 2026 and 2025 consists of the following:

 

   For the Nine Months Ended
March 31,		 
   2026   2025 
Current income tax expense  $189,487    26,608 
Deferred income tax credit   (78,855)   (8,014)
Total income tax expense  $110,632    18,594 

The following table reconciles the statutory tax rate to the Company’s effective tax the nine months ended March 31, 2026 and 2025:

 

   For the Nine Months Ended
March 31		 
   2026   2025 
Loss before tax  $(3,342,245)  $(1,511,008)
Statutory state tax rate   21%   21%
Income tax credit at the federal statutory rate   (701,871)   (317,312)
Change in valuation allowance   772,953    329,955 
Tax effect on other tax jurisdiction   342    (15,202)
Non-deductible expense   39,208    21,153 
Total income tax expense  $110,632   $18,594 

 

The Company’s deferred tax assets and liabilities consist of the following:

 

   March 31
2026		   June 30,
2025		 
Deferred tax assets:        
Allowance for credit loss  $42,795   $8,260 
Allowance for credit loss - loan receivable   73,500    
-
 
Refundable liability net of right of return asset   28,292    
-
 
Non-capital loss carried forward   1,234,620    535,167 
Valuation allowance   (1,308,120)   (535,167)
Total deferred tax assets  $71,087   $8,260 
Deferred tax liabilities:          
Intangible asset – license   (75,332)   (91,360)
Total deferred tax liabilities   (75,332)   (91,360)
Deferred tax liabilities, net  $(4,245)  $(83,100)

 

As of March 31, 2026 and June 30, 2025, the accumulated tax losses of subsidiaries incorporated in the U.S. of approximately $4.9 million and approximately $1.8 million, are allowed to be carried forward to offset against future taxable profits. The carry forward of non-capital losses in the U.S. generally has no time limit, but the loss could be only offset up to 80% of taxable income in a given year. The carry forward of net operating loss generated by the subsidiaries incorporated in the PRC, subject to the agreement of the PRC tax authorities, of approximately $1.0 million and $0.6 million as of March 31, 2026 and June 30, 2025 can be carried forward for 5 years.