Company: GURE
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001193805-25-000638
Chunk: 22

Company: GULF RESOURCES, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 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 of21%. No provision for the US federal income taxes has been made as the Company had no US taxable
income for the three-month periods ended March 31, 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 periods ended March 31, 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 periods ended March
31, 2025 and 2024. The applicable statutory tax rates for the three-month periods ended March 31, 2025 and 2024 are16.5%.
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 at25% of the assessable profits.

The operating subsidiaries SCHC, SYCI, DCHC, and
SHSI are wholly foreign-owned enterprises (“ FIE”) incorporated in the PRC and are subject to PRC Local Income Tax Law. The
PRC tax losses may be carried forward to be utilized against future taxable profit for ten years for High-tech enterprises and small and
medium-sized enterprises of science and technology and for five years for other companies. Tax losses of the operating subsidiaries of
the Company may be carried forward for five years.

On February 22, 2008, the Ministry of Finance
(“ MOF”) and the State Administration of Taxation (“ SAT”) jointly issued Cai Shui [2008] Circular 1 (“