Company: KPEA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023821
Chunk: 57

Company: Kun Peng International Ltd.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 57
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    $332,076  
    $428,647 

NOTE
14 - INCOME TAXES

The
Company accounts for income taxes pursuant to the accounting standards that require the recognition of deferred tax assets and liabilities
for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the
expected future tax benefit to be derived from tax losses and tax credit carryforwards. Additionally, the accounting standards require
the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. The Company and its subsidiaries
file separate income tax returns.

United
States

Kun
Peng International Limited is incorporated in the State of Nevada and is subject to United States federal income tax. No provision for
income taxes in the U.S. has been made as the Company has no U.S. taxable income for the nine months ended June 30, 2025 and 2024.

British
Virgin Islands

KP
International Holding is a holding company organized as an International Business Company under the laws of the British Virgin Islands
(“BVI”), and its principal operating subsidiaries are organized under the laws of Hong Kong and the laws of the PRC. KP International
and its subsidiaries are not subject to income taxes in the BVI.

Hong
Kong

The
two-tier profits tax rates system was introduced under the Inland Revenue (Amendment)(No.3) Ordinance 2018 (“the Ordinance”)
of Hong Kong and became effective for the assessment year 2018/2019. Under the two-tier profits tax rates regime, the profits tax rate
for the first $0.26 million (HKD 2 million) of assessable profits of a corporation will be subject to a lowered tax rate of 8.25%, while
the remaining assessable profits will be subject to the legacy tax rate of 16.5%.

KP
(Hong Kong) did not earn any income that was derived in Hong Kong for the nine months ended June 30, 2025 and 2024, and, therefore, KP
(Hong Kong) were not subject to Hong Kong profits tax for the periods reported.

Since
the two-tier profit tax rates regime is tentative, we applied the original profits tax rate, 16.5%, for the calculation of deferred taxes
for our subsidiaries in Hong Kong.

PRC

The
PRC’s statutory income tax rate is 25%. The Company’s subsidiaries and VIE registered in