Company: GURE
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001193805-25-001627
Chunk: 35

Company: GULF RESOURCES, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 35
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 of $2,008,853.

As of September 30, 2025, as
SCHC and SYCI were liable for a sum of principal and interests of $3,521,613, net of auction proceeds, the Company recognized accrued
liabilities of $968,113 accordingly.

NOTE 17 – INCOME TAXES

The Company utilizes the asset and liability
method of accounting for income taxes in accordance with FASB ASC 740-10. If it is more likely
than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

(a)          United
States (“US”)

United States

Gulf Resources, Inc. may be subject to the United
States of America Tax laws at a tax rate of 21%. No provision for the US federal income taxes has been made as the Company had no US taxable
income for the three-month and nine-month periods ended September 30, 2025 and 2024, and management believes that its earnings are permanently
invested in the PRC.

(b)           British
Virgin Islands (“BVI”)

Upper Class Group Limited, a subsidiary of Gulf
Resources, Inc., was incorporated in the BVI and, under the current laws of the BVI, it is not subject to tax on income or capital gain
in the BVI. Upper Class Group Limited did not generate assessable profit for the three-month and nine-month periods ended September 30,
2025 and 2024.

(c)           Hong
Kong

Hong Kong

HKJI, a subsidiary of Upper Class Group Limited, was
incorporated in Hong Kong and is subject to Hong Kong taxation on its activities conducted in Hong Kong and income arising in or derived
from Hong Kong.  No provision for income tax has been made as it has no taxable income for the three-month and nine-month periods
ended September 30, 2025 and 2024.  The applicable statutory tax rates for the three-month and nine-month periods ended September
30, 2025 and 2024 are 16.5%. There is no dividend withholding tax in Hong Kong.

(d)           PRC

PRC

Enterprise income tax (“EIT”) for SCHC, SYCI, SHSI and
DCHC in the PRC is charged at 25% of the assessable profits.

The operating subsidiaries SCHC is a wholly foreign