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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 15. Income taxes The Company files its primary tax return in the United Kingdom (“the UK”). Its subsidiaries file income tax returns in the United States (“the US”), Spain, India and Taiwan. The income taxes of the Company are presented on a separate return basis for each tax-paying entity. The components of the Company's loss (income) before income taxes are as follows:
| December 31, 2024 |  | December 31, 2023 |
UK | $ |  | 171,670,156 |  | $ |  | 29,427,631 |
US |  |  | 696,137 |  |  |  | 994,933 |
Spain |  |  | 262,064 |  |  |  | 298,927 |
India |  |  | (88,448 | ) |  |  | (92,982 | )
Taiwan |  |  | 61,948 |  |  |  | 44,181 |
Total | $ |  | 172,601,857 |  | $ |  | 30,672,690 |
Current and deferred income tax expense consist of:
| December 31, 2024 |  | December 31, 2023 |
India | $ |  | 44,933 |  | $ |  | 63,408 |
Total | $ |  | 44,933 |  | $ |  | 63,408 |
Current |  |  | 44,933 |  |  |  | 63,408 |
Total | $ |  | 44,933 |  | $ |  | 63,408 |
Income tax benefit attributable to our loss before income taxes differs from the amounts computed using the applicable income tax rate as a result of the following factors:
|  | December 31, 2024 |  |  | December 31, 2023 |
Loss before income taxes | $ |  | (172,601,857 | ) | $ |  | (30,672,690 | )
Income tax benefit at statutory tax rates (a) |  |  | 43,150,464 |  |  |  | 7,208,082 |
Effect of: |  |  |  |  |  |
Non-deductible or non-taxable foreign currency exchange results |  |  | (329,399 | ) |  |  | (88,195 | )
International rate differences (b) |  |  | (23,423 | ) |  |  | (9,845 | )
Non-deductible expenses |  |  | (29,893,933 | ) |  |  | (2,050,426 | )
Change in valuation allowance |  |  | (12,858,776 | ) |  |  | (4,996,208 | )
Income tax expense | $ |  | 44,933 |  | $ |  | 63,408 |
a. The statutory or “expected” tax rates are the U.K. rates of 25% for 2024 and 23.5% for 2023. The 2023 statutory rate represents that blended rate in effect for the year ended December 31, 2023 based on the 19.0% statutory rate that was in effect for the first quarter of 2023 and the 25.0% statutory rate that was in effect for the remainder of 2023. b. Amounts reflect adjustments (either a benefit or expense) to the “expected” tax expense for statutory rates in jurisdictions in which we operate outside of the UK. The Company and its subsidiaries are liable to income taxes in their respective jurisdiction. The Company has unused tax losses as follows as at December 31, 2024:
| Tax loss carryforward |  |  | Expiration date
UK (1) | $ |  | 41,980,917 |  |  | (1)
US |  |  | 6,238,596 |  |  | Indefinite
Spain |  |  | 1,106,475 |  |  | Indefinite
India |  | — |  |  | N/A
Taiwan |  |  | 2,421,606 |  |  | 10 years
1. Tax losses carried forward in Rezolve Limited were not transferred to Rezolve AI plc in the Pre-Closing Demerger. As a result, all tax losses previously created in the UK was lost upon completion of the Pre-Closing Demerger, see note 2.1. Tax losses incurred subsequent to the Pre-Closing Demerger have an indefinite life. 2. The Company has created a valuation allowance against the deferred tax asset resulting from such losses due to the Company’s history of past losses and lack of conclusive evidence to support the view that sufficient taxable profit will be generated in the future by the operating entities to offset such losses. The changes in our unrecognized tax benefits for the indicated periods are summarized below:
| 2024 |  | 2023 |
Balance at January 1 | $ |  | 33,754,069 |  | $ |  | 24,388,433 |
Effect of rate changes: |  |  |  |  |  |
Additions based on tax positions related to current year |  |  | 10,719,324 |  |  |  | 6,882,336 |
Return to provision (based on tax return) |  |  | 16,505,726 |  |  | — |
Tax losses lost on demerger |  |  | (47,942,752 | ) |  | — |
Foreign currency translation |  |  | 588,135 |  |  |  | 2,483,300 |
Balance at December 31 | $ |  | 13,624,502 |  | $ |  | 33,754,069 |
No assurance can be given that any of these tax benefits will be recognized or realized. During 2025, we do not expect any material reductions to our unrecognized tax benefits related to tax positions taken as of December 31, 2024. No assurance can be given as to the nature or impact of any changes in our unrecognized tax positions during 2024. The tax effects of temporary differences that give rise to the significant portions of our deferred tax assets and liabilities are presented below:
| December 31, 2024 |  | December 31, 2023 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss and other carryforwards | $ |  | 13,624,502 |  | $ |  | 33,754,069 |
PP&E |  | — |  |  | — |
Derivative liabilities |  |  | 644,969 |  |  | — |
Short-term debt to related party |  | — |  |  |  | 1,556,454 |
Share-based payment liability |  |  | 350,000 |  |  |  | 327,757 |
Convertible debt |  |  | 7,382,329 |  |  |  | 8,110,222 |
Deferred tax assets |  |  | 22,001,800 |  |  |  | 43,748,501 |
Deferred tax liabilities: |  |  |  |  |  |
Derivative asset |  |  | (646,895 | ) |  | — |
Intangible assets |  |  | (485,477 | ) |  | — |
Deferred tax liabilities |  |  | (1,132,372 | ) |  | — |
Net Deferred tax asset |  |  | 20,869,428 |  |  | — |
Valuation allowance |  |  | (20,869,428 | ) |  | — |
Net Deferred tax asset, net of valuation allowance | $ |  | — |  | $ |  | — |
The Company files income tax returns as prescribed by the tax laws of its operating jurisdictions. In the normal course of business, the Company is subject to examination by tax authorities. In connection with such reviews, disputes could arise with the taxing authorities over the interpretation or application of certain income tax rules related to our business in that tax jurisdiction. Such disputes may result in future tax and interest and penalty assessments by these taxing authorities. The ultimate resolution of tax contingencies will take place upon the earlier of (i) the settlement date with the applicable taxing authorities in either cash or agreement of income tax positions or (ii) the date when the tax authorities are statutorily prohibited from adjusting the Company’s tax computations. The Company has no t recognized any uncertain tax position for the year ended December 31, 2024 and December 31, 2023, respectively.

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