Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 237

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 19
Chunk 237
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 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 than50% 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. All of the tax returns of the Group’s subsidiary in
China remain subject to examination by the tax authorities for five years from the date of filing.

Value added tax

Revenue represents the invoiced
value of service, net of VAT. The VAT is based on gross sales price and VAT rates range up to13%, depending on the type of service provided.
Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities.
Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Group’s subsidiary
in China, have been and remain subject to examination by the tax authorities for five years from the date of filing.

Employee defined contribution plan

Full time employees of the
Group in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits,
medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations
require that the Group make contributions to the government for these benefits based on a certain percentage of the employee’s salaries.
The Group has no legal obligation for the benefits beyond the contributions. The total amount was expensed as incurred.

Loss per share

Earnings (loss) per ordinary
share is calculated in accordance with ASC 260, Earnings per Share. Basic earnings (loss) per ordinary share is computed by dividing the