Company: GURE
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001193805-25-000638
Chunk: 23

Company: GULF RESOURCES, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 23
---
 Circular
1”). According to Article 4 of Circular 1, distributions of accumulated profits earned by a FIE prior to January 1, 2008 to foreign
investor(s) in 2008 will be exempted from withholding tax (“ WHT”) while distribution of the profit earned by an FIE after
January 1, 2008 to its foreign investor(s) shall be subject to WHT at 5% effective tax rate.

As of March 31, 2025 and December 31, 2024, the
accumulated distributable earnings under the Generally Accepted Accounting Principles (GAAP”) of PRC that are subject to WHT are
$35,315,678and $40,524,183, respectively. Since the Company intends to reinvest its earnings to further expand its businesses in mainland
China, its foreign invested enterprises do not intend to declare dividends to their immediate foreign holding companies in the foreseeable
future. Accordingly, as of March 31, 2025 and December 31, 2024, the Company has not recorded any WHT on the cumulative amount of distributable
retained earnings of its foreign invested enterprises that are subject to WHT in China. As of March 31, 2025 and December 31, 2024, the
unrecognized WHT are $816,956and $1,078,743, respectively.

The Company’s income tax returns are subject
to the various tax authorities’ examination. The federal, state and local authorities of the United States may examine the Company’s
income tax returns filed in the United States for three years from the date of filing. The Company’s US income tax returns since
2017 are currently subject to examination.

Inland Revenue Department of Hong Kong (“ IRD”)
may examine the Company’s income tax returns filed in Hong Kong for seven years from date of filing. For the years 2012 through
2019, HKJI did not report any taxable income. It did not file any income tax returns during these years except for 2014 and 2018. For
companies which do not have taxable income, IRD typically issues notification to companies requiring them to file income tax returns once
in every four years. The tax returns for 2014 and 2018 are currently subject to examination.

The components of the provision for income tax
benefit (expense) from continuing operations are:

Income Taxes - Schedule of Components of Income Tax Expense Benefit

                                            Three-Month