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INCOME TAX
 12 Months Ended
Dec. 31, 2022
Seamless Group Inc [Member]  
INCOME TAX

16 Income tax

 

The Company’s loss before income tax consists of:

   2021   2021 
   Years ended December 31, 
   2021   2021 
   US$   US$ 
         
Malaysia   1,606,867    4,235,091 
Indonesia   1,609,362    561,712 
Hong Kong   (18,818,064)   (17,250,286)
Others   (10,096)   321,886 
Loss before income tax   (15,611,931)   (12,131,597)

 

The Company is incorporated in Cayman Islands and is not subject to corporate income tax under its relevant regulations.

 

For the Company’s subsidiaries incorporated in Hong Kong, they are subject to a corporate tax rate of 16.5% on the assessable profits arising from Hong Kong.

 

For the Company’s subsidiaries incorporated in Malaysia, they are subject to corporate tax rate on 24% on the assessable profits arising from Malaysia.

 

For the Company’s subsidiaries incorporated in Indonesia, they are subject to a corporate tax rate of 22% on the assessable profits arising from Indonesia.

 

For the Company’s subsidiary incorporated in Singapore, it is subject to a corporate tax rate of 17% on the assessable profits arising from Singapore. No provision for Singapore profits tax has been made in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021.

 

For the Company’s subsidiary incorporated in United Kingdom, it is subject to a corporate tax rate of 19% on the assessable profits arising from United Kingdom. No provision for United Kingdom profits tax has been made in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021.

 

 

SEAMLESS GROUP INC. AND SUBSIDIARIES

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

16 Income tax (Continued)

 

Income tax expense consists of:

   2022   2021 
   Years ended December 31, 
   2022   2021 
   US$   US$ 
         
Income tax expense   507,740    1,123,437 
Deferred income tax benefit   (393,958)   (369,734)
Income tax expense benefit   113,782    753,703 

 

A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the income before income tax in the consolidated statements of operations and comprehensive loss is as follows:

 

   2022   2021 
   Years ended December 31, 
   2022   2021 
   US$   US$ 
         
Income before income tax   (15,611,931)   (12,131,597)
Tax calculated at Hong Kong profits tax rate   (2,576,217)   (2,001,717)
Effect of different tax rates applicable to different jurisdictions   2,244,573    2,227,715 
Income not subject to tax   (567,161)   (291,197)
Non-deductible expenses   658,533    212,759 
Change in valuation allowance   245,220    318,215 
Underprovision of current tax in the previous financial year   48,182    228,936 
Tax effect on deductible temporary differences   46,624    58,992 
Others   14,028    — 
Income tax   113,782    753,703 

 

The Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 are attributable to the following:

 

   2022   2021 
   December 31, 
   2022   2021 
   US$   US$ 
Deferred tax assets          
Tax losses carried forward   7,526,178    6,341,531 
Equipment   (90,113)   (85,534)
Accrued expenses   354,988    189,163 
Others   39,290    — 
Deferred tax gross   7,830,343    6,445,160 
Valuation allowance   (7,061,726)   (6,339,009)
Total deferred tax assets   768,617    106,151 
           
Deferred tax liabilities          
Fixed assets   —    — 
Intangible assets   (1,554,721)   (1,924,455)
Others   (61,622)   (61,622)
Total deferred tax liabilities   (1,616,343)   (1,986,077)
           
Net deferred tax liabilities   (847,727)   (1,879,926)

 

 

SEAMLESS GROUP INC. AND SUBSIDIARIES

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

16 Income tax (Continued)

 

As of December 31, 2022 and 2021, management has recorded a valuation allowance on certain deferred tax assets where management believes that after considering all of the available evidence, it is more likely than not that some portion or all will not be realized in the foreseeable future. The ultimate realization of deferred tax assets depends on the generation of future taxable income in which those temporary differences and carry forwards become deductible.

 

As of December 31, 2022 and 2021, the accumulated tax losses of subsidiaries can be carried forward to offset against future taxable profits. The tax loss for the subsidiary incorporated in Hong Kong is US$41,238,871 and US$37,042,286 as of December 31, 2022 and 2021, respectively, which can be carried forward indefinitely.

 

As of December 31, 2022 and 2021, the accumulated tax losses of subsidiaries can be carried forward to offset against future taxable profits. The tax loss for the subsidiary incorporated in Singapore is US$385,862 and US$294,942 as of December 31, 2022 and 2021, respectively, which can be carried forward indefinitely.

 

The tax loss in the subsidiary incorporated in United Kingdom is US$566,925 and US$696,906 as of December 31, 2022 and 2021, respectively, which can be carried forward indefinitely.

 

The tax loss in the subsidiaries incorporated in Indonesia is US$2,605,545 and US$89,576 as of December 31, 2022 and 2021, respectively, which will expire, if unused, in the year ending December 31, 2022.

 

The tax loss in the subsidiaries incorporated in Malaysia is US$444,983 and US$502,931 as of December 31, 2022 and 2021, respectively, which will expire, if unused, in the year ending December 31, 2030.