Company: KPEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010699
Chunk: 60

Company: Kun Peng International Ltd.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 60
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% 
     (2.8)%
  
    Change in valuation allowance 
     (24.5)% 
     (22.9)
  
    Effective tax rate 
     0.0% 
     (1.1)%

Uncertain tax positions

The Company files tax returns
as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination
by the respective jurisdictions, where applicable. The statute of limitations for the tax returns varies by jurisdiction.

The statute of limitations for
the U.S. Internal Revenue Service to assess the income tax returns of a taxpayer expires three years from the due date of the income tax
return or the date on which it was filed, whichever is later.

In accordance with the Hong Kong
profits tax regulations, a tax assessment by the IRD may be initiated within six years after the relevant year of assessment, but that
period is extendable to 10 years in the case of potential willful underpayment or evasion.

In accordance with the PRC Tax
Administration Law on the Levying and Collection of Taxes, the PRC tax authorities generally have up to five years to assess underpaid
tax plus penalties and interest for PRC entities’ tax filings. In the case of tax evasion, which is not clearly defined in the law,
there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax
authorities based on the above.

As of March 31, 2025 and September
30, 2024, the Company did not accrue any liability, interest, or penalties related to uncertain tax positions in the provision for income
taxes in its consolidated financial statements. The Company does not expect that its assessment regarding unrecognized tax positions will
materially change over the next 12 months.

     34 

NOTE 14 - RIGHT-OF-USE ASSETS AND LEASE

The
Company has operating leases for its office facilities, automobiles and employee accommodation and finance lease for equipment for revenue
service. The Company classified the equipment for revenue service as finance lease as the lessor will transfer the ownership of equipment
for revenue service to the Company by the end of the lease term.

Leases with an initial term of
12 months or less are not recorded on the balance sheet. The Company recognized lease expense on a straight-line basis over the lease
term for operating lease. Meanwhile, the Company recognized the finance