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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES

17. INCOME TAXES

 

Cayman

 

Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gains. In addition, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

 

British Virgin Islands

 

Under the current laws of the British Virgin Islands, subsidiaries incorporated in British Virgin Islands are not subject to tax on income or capital gains.

 

United States

 

Mercurity Fintech Technology Holding Inc. (“MFH Tech”) is incorporated in New York, USA. Chaince Securities, Inc. and its subsidiary Chaince Securities, LLC (formerly known as JVDA, LLC) are incorporated in Delaware, USA. In accordance with the Federal Corporate Income Tax Law, the Federal corporate income tax rate applicable to MFH Tech is 21%.

 

Hong Kong

 

Under the Hong Kong tax laws, the Company’s subsidiaries in Hong Kong are subject to Hong Kong profits tax rate at 16.5%.

 

People’s Republic of China

 

The enterprise income tax (‘‘EIT’’) law applies a uniform 25% EIT rate to both foreign invested enterprises and domestic enterprises. The EIT rate for the Company’s entities operating in the PRC is 25%.

 

For the year ended December 31, 2022, 2023 and 2024, loss or income before income taxes from continuing operations consists of:

 

   2024   2023   2022 
   For the year ended December 31, 
   2024   2023   2022 
   US$   US$   US$ 
Cayman Islands: Mercurity Fintech Holding Inc. (“MFH”)   (1,384,127)   (6,120,978)   (7,992,466)
US: Mercurity Fintech Technology Holding Inc. (“MFH Tech”)   (2,594,153)   (2,662,392)   8,776 
US: Chaince Securities, Inc.   (100,291)   (45,346)   — 
US: Chaince Securities, LLC (formerly known as JVDA, LLC)   (30)   —    — 
Hong Kong: Ucon Capital (HK) Limited (“Ucon”)   (23,652)   (496,006)   (1,317,169)
PRC: Lianji Future Technology Ltd. (“Lianji Future”)   (93,360)   (121,212)   (177,053)

 

 

MERCURITY FINTECH HOLDING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In U.S. dollars, except for number of shares and per share (or ADS) data)

 

 

 

The current and deferred components of the income tax expense from continuing operations in the consolidated statements of comprehensive loss are as follows:

 

   2024   2023   2022 
   For the year ended December 31, 
   2024   2023   2022 
   US$   US$   US$ 
Current tax expense   —    (587)   (2,294)
Deferred tax (expense)/benefit   (336,985)   91,363    251,005 
Income tax (expense)/benefit    (336,985)   90,776    248,711 

 

The reconciliation of tax computed by applying the statutory income tax rate of 21% applicable to the US operation, 16.5% applicable to the Hong Kong operation, and 25% applicable to the PRC operation to income tax benefit from continuing operations is as follows:

 

   US
(MFH Tech)		   US
(Chaince Securities, Inc.)		   US
(Chaince Securities, LLC)		   Hong Kong   PRC   Consolidated 
   For the year ended December 31, 2024 
   US$   US$   US$   US$   US$   US$ 
   US
(MFH Tech)		   US
(Chaince Securities, Inc.)		   US
(Chaince Securities, LLC)		   Hong Kong   PRC   Consolidated 
Loss before income taxes   (2,594,153)   (100,291)   (30)   (23,652)   (93,360)   (2,811,486)
Income tax computed at applicable tax rates   (544,772)   (21,061)   (6)   (3,903)   (23,340)   (593,082)
Current losses unrecognized deferred income tax   544,772    —    6    3,903    23,340    572,021 
Temporary difference between the book value of intangible asset and its tax base   —    —    25,200    —    —    25,200 
Changes in valuation allowance   —    —    —    332,846    —    332,846 
Income tax expenses/(benefits)   —    (21,061)   25,200    332,846    —    336,985 

 

   US
(MFH Tech)		   US
(Chaince Securities, Inc.)		   Hong Kong   PRC   Consolidated 
   For the year ended December 31, 2023 
   US$   US$   US$   US$   US$ 
   US
(MFH Tech)		   US
(Chaince Securities, Inc.)		   Hong Kong   PRC   Consolidated 
Loss before income taxes   (2,662,392)   (45,346)   (496,006)   (121,212)   (3,324,956)
Income tax computed at applicable tax rates   (559,102)   (9,522)   (81,841)   (30,303)   (680,768)
Current losses unrecognized deferred income tax   559,102    —    —    30,303    589,405 
Prior income tax expense recognized in current period   587    —    —    —    587 
Income tax expenses/(benefits)   587    (9,522)   (81,841)   —    (90,776)

 

 

MERCURITY FINTECH HOLDING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In U.S. dollars, except for number of shares and per share (or ADS) data)

 

 

 

   US   Hong Kong   PRC   Consolidated 
   For the year ended December 31, 2022 
   US$   US$   US$   US$ 
   US   Hong Kong   PRC   Consolidated 
Income/(Loss) before income taxes   8,776    (1,317,169)   (177,053)   (1,485,446)
Income tax computed at applicable tax rates   1,843    (217,333)   (44,263)   (259,753)
Effect of different tax rates in different jurisdictions   451    —    —    451 
Non-deductible expenses   —    —    785    785 
Current losses unrecognized deferred income tax   —    —    43,478    43,478 
Prior losses recognized deferred income tax in current period   —    (33,672)   —    (33,672)
Income tax expenses/(benefits)   2,294    (251,005)   —    (248,711)

 

Deferred tax assets

 

The significant components of the Company’s deferred tax assets were as follows:

 

   December 31,   December 31, 
   2024   2023 
   US$   US$ 
Deferred tax assets          
Net operating loss carry forwards   124,609    103,548 
Impairment of intangible assets   238,821    238,821 
Valuation allowance   (332,846)   — 
Total deferred tax assets   30,584    342,369 

 

Deferred tax liabilities

 

The significant components of the Company’s deferred tax liabilities were as follows:

 

   December 31,   December 31, 
   2024   2023 
   US$   US$ 
Deferred tax liabilities          
Temporary difference of intangible asset   25,200    — 
Total deferred tax liabilities   25,200    — 

 

 

MERCURITY FINTECH HOLDING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In U.S. dollars, except for number of shares and per share (or ADS) data)