v3.26.1
Taxation
 6 Months Ended
Dec. 31, 2025
Taxation [Abstract]  
TAXATION

15. TAXATION

 

Cayman Islands

 

The Company was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands.

 

British Virgin Islands

 

EPWK BVI was incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed.

Hong Kong

 

According to Tax (Amendment) (No. 3) Ordinance 2018 published by Hong Kong government, from April 1, 2018, under the two-tiered profits tax rates regime, the profits tax rate for the first HKD2 million of assessable profits will be lowered to 8.25% (half of the rate specified in Schedule 8 to the Inland Revenue Ordinance (IRO)) for corporations. EPWK HK was not subject to Hong Kong profit tax for any period presented as it did not have assessable profit during the periods presented.

 

PRC

 

Generally, the Company’s WFOE, VIE and subsidiaries of VIE, which are considered PRC resident enterprises under PRC tax law, are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of 25%, and for High-tech enterprises the tax is 15%.

 

The income tax provision consists of the following components:

 

  

For the six months ended

December 31,

 
   2025   2024 
Current income tax expenses  $(203)  $595 
Deferred income tax benefit   
-
    (669)
Total income tax benefit  $(203)  $(74)

 

The reconciliation of tax computed by applying the statutory income tax rate of 25% for the six months ended December 31, 2025 and 2024 applicable to the PRC operations to income tax expense were as follows:

 

  

For the six months ended

December 31,

 
   2025   2024 
Statutory income tax rate   25.00%   25.00%
Impact of different tax rates in other jurisdictions   (23.26)%   
-
 
Tax effect of preferential tax treatments   (1.40)%   (7.09)%
R&D credit   0.48%   7.73%
Change in valuation allowance   (0.78)%   (26.23)%
Permanent difference   (0.04)%   0.61%
Tax adjustment   0.00%   
-
 
Effective income tax rate  $0.00%  $0.02%

 

The tax effects of temporary differences that give rise to the deferred tax balances as of December 31, 2025 and June 30, 2025 are as follows:

 

   As of 
   December 31,
2025		   June 30,
2025		 
Deferred tax assets:        
Credit loss  $196   $2,422 
Net operating losses carried forward   2,519,188    2,442,931 
Subtotal   2,522,384    2,445,353 
Less: valuation allowance   (2,522,384)   (2,445,353)
Total  $
-
   $
-
 

 

As of December 31, 2025 and June 30, 2025, the Company had tax deductible net operating loss carryforwards of approximately $19,509,199 and $19,725,595, respectively, which arose from the Company’s subsidiaries, VIE and the VIE’s subsidiaries established in the PRC and Hong Kong.