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TAXATION
 3 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
TAXATION

13. TAXATION

 

(a) Enterprise Income Tax (“EIT”)

 

The Company operates in multiple jurisdictions, including the People’s Republic of China (“PRC”), Hong Kong, Seychelles and the United States, and is subject to the applicable tax laws in those jurisdictions.

 

Yingxi Seychelles was incorporated in the Republic of Seychelles and, under the current laws of Seychelles, is not subject to income taxes.

 

Yingxi HK is subject to Hong Kong Profits Tax. Under the two-tiered profits tax regime, the first HK$2 million of assessable profits is taxed at 8.25%, with the remaining assessable profits taxed at 16.5%. No provision for income taxes in Hong Kong has been made as Yingxi HK had no taxable income for the three months ended June 30, 2026 and 2025.

 

YX was incorporated in the PRC and is subject to the EIT tax rate of 25%. No provision for income taxes in the PRC has been made as YX had no taxable income for the three months ended June 30, 2026 and 2025.

 

The Company’s PRC operating subsidiaries are subject to the EIT Law of the PRC. The applicable statutory EIT rate is 25%. Income taxes of the PRC subsidiaries were $2 and $764 for the three months ended June 30, 2026 and 2025, respectively.

 

YX’s parent entity, Addentax Group Corp. is a U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as Addentax Group Corp. had no U.S. taxable income for the three months ended June 30, 2026 and 2025.

 

The reconciliation of income taxes computed at the PRC statutory tax rate applicable to the PRC, to income tax expenses are as follows:

 

   2026   2025 
   Three months ended June 30, 
   2026   2025 
PRC statutory tax rate   25%   25%
Computed expected benefits (expense)   597,322    (32,627)
Temporary differences   (550,145)   33,626 
Permanent difference   (54,414)   (256)
Changes in valuation allowance   7,239    21 
Income tax expense  $2   $764 

 

Deferred tax assets had not been recognized in respect of any potential tax benefit that may be derived from non-capital loss carry forward and property and equipment due to past negative evidence of previous cumulative net losses and uncertainty upon restructuring. The management will continue to assess at each reporting period to determine the realizability of deferred tax assets.

 

(b) Value Added Tax (“VAT”)

 

In accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is 13%, which is levied on the invoiced value of sales and is payable by the purchaser. Companies are required to remit the VAT they collect to the tax authority. A credit is available whereby VAT paid on purchases can be used to offset the VAT due on sales.

 

For services, the applicable VAT rate is 9% under the relevant tax category for logistic company, except the branch of PF enjoyed the preferential VAT rate of 3% in 2026 and 2025. The Company is required to pay the full amount of VAT calculated at the applicable VAT rate of the invoiced value of sales as required. A credit is available whereby VAT paid on gasoline and toll charges can be used to offset the VAT due on service income.

 

The Company’s consulting service is conducted through Yingxi HK, the Company’s Hong Kong subsidiary. Hong Kong does not impose value-added tax, goods and services tax or sales tax. Accordingly, the consulting service conducted through Yingxi HK is not subject to VAT in Hong Kong.