Company: SISI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010889
Chunk: 35

Company: SHINECO, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 35
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 is established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.

The provisions of ASC 740-10-25, “Accounting
for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for unaudited condensed consolidated financial statement
recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This ASC also provides guidance on the
recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting
for interest and penalties associated with tax positions, and related disclosures. The Company did not have any uncertain tax positions
as of March 31, 2025 and June 30, 2024. The Company had not provided deferred taxes for undistributed earnings of non-U.S. subsidiaries
as of March 31, 2025, as it is the Company’s policy to indefinitely reinvest these earnings in non-U.S. operations. Quantification
of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable.

The statute of limitations for the Company’s
U.S. federal income tax returns and certain state income tax returns remains open for tax year 2022 and thereafter. As of March 31, 2025,
the tax years ended December 31, 2020 through December 31, 2024 for the Company’s PRC subsidiaries remained open for statutory examination
by PRC tax authorities.

On December 22, 2017, the “Tax Cuts and Jobs
Act” (“The Act”) was enacted. Under the provisions of The Act, the U.S. corporate tax rate decreased from 35% to 21%.
As the Company has a June 30 fiscal year end, the lower corporate income tax rate was phased in, resulting in a U.S. statutory federal
rate of approximately 28% for our fiscal year ended June 30, 2018, and 21% for subsequent fiscal years. Additionally, The Act imposes
a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject
to U.S. taxation. The change in rate caused the Company to re-measure its income tax liability and record an estimated income tax expense
of US$744,766 for the year ended June 30, 2018. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”)