Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 229

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 6
Chunk 229
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two-tier profits tax rates system was introduced under the Inland Revenue (Amendment)(No.3) Ordinance 2018 (“the Ordinance”)
of Hong Kong became effective for the assessment year 2018/2019. Under the two-tier profit 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 the lowered tax rate, 8.25% while the
remaining assessable profits will be subject to the legacy tax rate, 16.5%. The Ordinance only allows one entity within a group of “connected
entities” is eligible for the two-tier tax rate benefit. An entity is a connected entity of another entity if (1) one of them has
control over the other; (2) both of them are under the control (more than 50% of the issued share capital) of the same entity; (3) in
the case of the first entity being a natural person carrying on a sole proprietorship business-the other entity is the same person carrying
on another sole proprietorship business.

    F-41

Since
KP (China) and KP (Hong Kong) are wholly owned and under the control of KP International Holding, these entities are connected entities.
Under the Ordinance, it is an entity’s election to nominate the entity that will be subject to the two-tier profits tax rates on
its profits tax return. The election is irrevocable. The Company elected KP (Hong Kong) to be subject to the two-tier profits tax rates.
KP (China) and KP (Hong Kong) did not earn any income that was derived in Hong Kong for years ended September 30, 2024 and 2023 and therefore,
KP (China) and 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 the PRC are subject to income tax
rate of 25%, unless otherwise specified.

Income
tax expense was comprised of the following:

SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE BENEFIT

    2024  
    2023 

    September 30