Company: SISI
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006895
Chunk: 35

Company: SHINECO, INC.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 35
---
 Company has a June 30 fiscal year end, the lower corporate income tax rate was phased in, resulting in a U.S.
statutory federal rate of approximately 28% for our fiscal year ended June 30, 2018, and 21% for subsequent fiscal years. Additionally,
The Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings
are subject to U.S. taxation. The change in rate caused the Company to re-measure its income tax liability and record an estimated income
tax expense of US$744,766 for the year ended June 30, 2018. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”)
was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available,
prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of The
Act. In accordance with SAB 118, additional work is necessary to do a more detailed analysis of The Act as well as potential correlative
adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in fiscal 2019 when the analysis is complete.
The Company elects to pay the transition tax over an eight-year period using specified percentages (eight percent per year for the first
five years, 15 percent in year six, 20 percent in year seven, and 25 percent in year eight).

Value-Added Tax

Sales revenue represents the invoiced
value of goods, net of a value-added tax (“VAT”). All of the Company’s products that were sold in the PRC were subject
to a Chinese value-added tax at rates ranging from 3% to 13%, depending on the type of products sold. For overseas sales, VAT is exempted
on the exported goods. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of
producing finished products or acquiring finished products. The Company records a VAT payable or VAT receivable in the accompanying unaudited
condensed consolidated financial statements.

Foreign Currency Translation

The Company uses the United States dollar
(“U.S. dollars,” “USD,” or “US$”) for financial reporting purposes. The Company’s subsidiaries
and VIEs maintain their books and records in their functional currency of Renminbi (“RMB”), the currency of the P