Company: FRHC
Filing Date: 2025-07-29
Form Type: ARS
Source: 0000924805-25-000027
Chunk: 178

Company: Freedom Holding Corp.
Filing Date: 2025-07-29
Form: ARS
Chunk 178
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EDOM HOLDING CORP. NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2024 (All amounts in thousands of United States dollars, except share data, unless otherwise stated) 112

assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income. The Group records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Group determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Group recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Group will include interest and fines arising from the underpayment of income taxes in the provision for income taxes (if anticipated). As of March 31, 2025 and 2024, the Group had no accrued interest or fines related to uncertain tax positions. The Global Intangible Low-Taxed Income ("GILTI") provisions of the Tax Cuts and Jobs Act require the Group to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary's tangible assets. The Group has presented the deferred tax impacts of GILTI tax in its consolidated financial statements as of March 31, 2025 and 2024. Pillar 2 In October 2021, the Inclusive Framework, established by members of the OECD and the G20 countries, reached an agreement on a Two-Pillar Solution to address the tax challenges arising from the digitalisation of the economy (Pillar 1 and Pillar 2). The Inclusive Framework brings together over 140 countries and jurisdictions, including Kazakhstan. Pillar 2 specifically targets MNEs with annual consolidated revenue of 750 million EUR or more (“MNE groups”) (for any two years within the last 4 reporting years), aiming to ensure a minimum global effective tax rate (ETR) of 15%. Pillar 2 introduces additional taxation in jurisdictions where the effective tax rate (ETR) of a constituent entity falls below the minimum 15% threshold, via the following mechanisms: 1. Income Inclusion Rule (IIR) – Applies at the level of the Ultimate Parent Entity (UPE) to top up income of low- taxed subsidiaries. 2