Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 219

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 3
Chunk 219
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 rivers within our mining area, encompassing the tributary
of the Mihe River. The aim is to prevent flooding that could harm the wells, aqueducts and crude salt pans at our plant. This Project
incurred total expense of $46,510,856 in the fiscal year 2023.

NOTE 17 – INCOME TAXES

The Company utilizes the asset
and liability method of accounting for income taxes in accordance with FASB ASC 740-10. If it is more likely than not that some portion
or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

(a)United States (“US”)

United States

Gulf Resources, Inc. may be subject
to the United States of America Tax laws at a tax rate of 21%. No provision for the US federal income taxes has been made as the Company
had no US taxable income for the years ended December 31, 2024 and 2023, and management believes that its earnings are permanently invested
in the PRC.

(b)British Virgin Islands (“BVI”)

Upper Class Group Limited, a subsidiary
of Gulf Resources, Inc., was incorporated in the BVI and, under the current laws of the BVI, it is not subject to tax on income or capital
gain in the BVI. Upper Class Group Limited did not generate assessable profit for the years ended December 31, 2024 and 2023.

(c)Hong Kong

Hong Kong 

HKJI, a subsidiary of Upper Class
Group Limited, was incorporated in Hong Kong and is subject to Hong Kong taxation on its activities conducted in Hong Kong and income
arising in or derived from Hong Kong. No provision for income tax has been made as it has no taxable income for the years ended December
31, 2024 and 2023. The applicable statutory tax rates for the years ended December 31, 2024 and 2023 are 16.5%. There is no dividend withholding
tax in Hong Kong.

(d)PRC

PRC

Enterprise income tax (“EIT”)
for SCHC, SYCI, SHSI and DCHC in the PRC is charged at 25% of the assessable profits.

The operating subsidiaries SCHC
is a wholly foreign-owned enterprises (“FIE”), SYCI, DCHC, and SHSI are incorporated in the PRC and are subject to PRC Local
Income Tax Law. The PRC tax