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

13. TAXES

 

Income tax

 

BVI

 

Charming Medical and BeautyLab Group are incorporated in the BVI and are not subject to tax on income or capital gains under the current BVI law. In addition, upon payments of dividends by these entities to their shareholders, no BVI withholding tax will be imposed.

 

Hong Kong

 

My Beauty, Pilate, Dream International and Choliya are incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. From year of assessment of 2019/2020 onwards, Hong Kong profits tax rates are 8.25% on assessable profits up to HK$2,000,000 (approximately US$255,562, and 16.5% on any part of assessable profits over HK$2,000,000 (approximately US$255,562). Under Hong Kong tax law, the above-mentioned Hong Kong company is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.

 

For the years ended March 31, 2026, 2025 and 2024, the Company generated substantially all of its taxable income in Hong Kong. The tax expenses recorded in the Company’s result of operations are almost entirely attributable to income earned in Hong Kong. Should the Company’s operations expand or change in the future, where the Company generates taxable income in other jurisdictions, the Company’s effective tax rates may substantially change.

 

Taxation in the statements of income represents:

 

    Years ended March 31,  
    2026     2025     2024  
    US$     US$     US$  
Hong Kong profits tax provision for the year:                  
Current     88,131       101,209       119,274  
Deferred     67,983       134,873       62,477  
Total income tax expenses     156,114       236,082       181,751  

 

A reconciliation of the provision for income taxes determined at the Hong Kong statutory income tax rate to the Company’s effective income tax rate is as follows:

 

    Years ended  March 31,  
    2026     2025     2024  
    %     %     %  
Statutory tax rate of British Virgin Islands     0.0       0.0       0.0  
Hong Kong tax rate     16.5       16.5       16.5  
Permanent difference     117.2       1.3       3.3  
Tax concession (Note 1)     (16.7 )     (1.4 )     (1.7 )
Effective tax rate     117.0       16.4       18.1  

 

Note 1: The tax concession by the election by the Company for profits tax rate at 8.25% on the first HK$2,000,000 under the two-tiered profits tax regime as above mentioned.

 

Deferred tax

 

The following table sets forth the significant components of the deferred tax assets of the Company:

 

    As of March 31,  
    2026     2025  
    US$     US$  
Deferred tax assets:            
Difference in depreciation basis for property and equipment            
Opening balances     26,179       44,178  
Addition     2,416       10,388  
Utilized during the year     (23,021 )     (28,619 )
Exchange realignment     (107 )     232  
Ending balances     5,467       26,179  
                 
Net operating losses                
Opening balances     51,114       166,966  
Utilized during the year     (47,378 )     (116,642 )
Exchange realignment     (172 )     790  
Ending balances     3,564       51,114  
Total ending balances     9,031       77,293  
Less: valuation allowance     —       —  
Total deferred tax assets, net     9,031       77,293  

 

The Company did not recognize any valuation allowance against its deferred tax asset as management believes the Company will be able to fully utilize the assets in the foreseeable future. For Hong Kong company who has net operating losses incurred in an accounting year, the losses can be carried forward indefinitely to offset future profits generated from the business.