Company: QSJC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001683168-25-006089
Chunk: 44

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 44
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(51,841) 
     (50,239)
  
    Non-taxable income 
     –  
     – 
  
    Non-deductible expenses 
     29,327  
     29,085 
  
    Change in valuation allowance 
     21,655  
     19,523 
  
    Tax effect on tax losses expired 
     859  
     1,631 
  
    Income tax expense 
    $–  
    $– 

The full realization of the tax benefit associated
with the losses carried forward depends predominantly upon the Company’s ability to generate taxable income during the carry-forward
period.

     13 

In assessing the realization of deferred tax assets,
management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment. A valuation allowance is provided for deferred tax assets if it is more likely
than not that these items will either expire before the Company is able to realize their benefits or that future deductibility is uncertain.

As of June 30, 2025 and December 31, 2024, the
Company’s deferred tax assets solely represent the tax loss carried forward using the PRC statutory rate of 25%. As management of
the Company believes that it is more likely than not that the benefit from the tax loss carried forwards will not be realized, the Company
recorded a full valuation allowance for all the reporting periods. There were no deferred tax liabilities as of June 30, 2025 and December
31, 2024.

(b)  Value Added Tax (“VAT”)

The Company was subject to the normal VAT rate
of 13% for the three and six months ended June 30, 2025 and 2024.

    6.
    RELATED PARTIES TRANSACTIONS

The table below sets forth the related parties
and their relationships with the Company as of June 30, 2025 and December 31, 2024:

    Name of related parties 
    Relationship with the Company
  
    Yu Yang (“Mr. Yang”) 
    Controlling shareholder
  
    Jiaocheng Xinmu Trade Co., Ltd 
    Controlled by Mr. Yang