Company: MEGL
Filing Date: 2025-04-14
Form Type: 20-F
Source: 0001641172-25-004566
Chunk: 140

Company: Magic Empire Global Ltd
Filing Date: 2025-04-14
Form: 20-F
Item: Item 19
Chunk 140
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 been enacted or substantively enacted by the balance sheet date. The Group is not currently subject to tax
in the British Virgin Islands.

Deferred
income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts
in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances
are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

An
uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained
in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on
examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest
incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties
or interest relating to income taxes have been incurred during the years ended December 31, 2024, 2023 and 2022.

Related
parties

Parties
are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject
to common control or significant influence of the same party, such as a family member or relative, shareholder, or a related corporation.

Segment
reporting

To adopt the new ASU No. 2023-07, Segment Reporting (Topic 280)
Improvements to Reportable Segment Disclosures, which requires that an entity report segment information in accordance with Topic 280,
Segment Reporting. The amendment in the ASU is intended to improve reportable segment disclosure requirements primarily through enhanced
disclosures about significant segment expenses. The amendments in this update are effective for fiscal years beginning after December
15, 2023.

The
Group operates and manages its business as a single segment, in accordance with ASC 280, Segment Reporting

The Group’s CODM assesses performance for the segment and decides
how to allocate resources by regularly reviewing the segment net income (loss)