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INCOME TAXES | 12 Months Ended
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Oct. 31, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 11 - INCOME TAXES The Company provides for income taxes and the related accounts under the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates and will be updated if the enacted tax rate changes before the expected reversal dates. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The provision (benefit) for income taxes comprises: SCHEDULE OF PROVISION (BENEFIT) FOR INCOME TAXES
|  | October 31, |  |  | October 31, |
|  | 2025 |  |  | 2024 |
Current federal expense |  | $ | 594,187 |  |  | $ | 174,094 |
Current state income tax expense |  |  | 128,005 |  |  |  | 53,147 |
Foreign tax expense |  |  | 427,623 |  |  |  | 486,429 |
Total current tax expense |  |  | 1,149,815 |  |  |  | 713,670 |
Deferred federal (benefit) expense |  |  | (47,205 | ) |  |  | 249,693 |
Deferred state (benefit) expense |  |  | (13,375 | ) |  |  | (11,585 | )
Deferred foreign tax expense |  |  | 293,052 |  |  |  | 13,514 |
Deferred tax expense |  |  | 232,472 |  |  |  | 251,622 |
Total Income Tax Expense |  | $ | 1,382,287 |  |  | $ | 965,292 |
CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2025 and 2024 The expense for income taxes differed from the U.S. statutory rate due to the following: SCHEDULE OF RECONCILIATION OF INCOME TAX BENEFIT
|  | October 31, |  |  | October 31, |
|  | 2025 |  |  | 2024 |
Statutory tax rate |  |  | 21.0 | % |  |  | 21.0 | %
R&D Relief |  |  | (8.6 | )% |  |  | (8.8 | )%
Foreign Tax expense |  |  | 10.4 | % |  |  | 7.5 | %
State Income Tax |  |  | 2.3 | % |  |  | (1.2 | )%
Total |  |  | 25.1 | % |  |  | 20.9 | %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES
|  | October 31, |  |  | October 31, |
|  | 2025 |  |  | 2024 |
Noncurrent deferred tax assets (liabilities) |  |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |  |
Restricted Stock Awards |  |  | 103,021 |  |  |  | 42,441 |
Book/Tax Depreciation |  |  | (1,213 | ) |  |  | (7,666 | )
Foreign fixed assets |  |  | (519,899 | ) |  |  | (213,484 | )
Foreign short term timing differences |  |  | 87,890 |  |  |  | - |
Foreign NOL carryforwards |  |  | 12,252 |  |  |  | 96,698 |
Subtotal Deferred Asset |  |  | 203,163 |  |  |  | 139,139 |
Subtotal Deferred (Liability) |  |  | (521,112 | ) |  |  | (221,150 | )
Valuation allowance |  |  | - |  |  |  | - |
Total Deferred (Liability) Asset, net |  | $ | (317,949 | ) |  | $ | (82,011 | )
As of October 31, 2025, we had no U.S. federal net operating loss (NOLs) carryforwards. The Company’s tax jurisdictions are the USA, UK, Denmark, India, and Australia (our India and Australian operations are currently dormant). As a result, the Company’ foreign derived income is subject to GILTI tax in the United States. The Company has elected to treat GILTI inclusions as period costs. The Company has filed tax returns for federal, state, and foreign jurisdictions. The Company’s evaluation of uncertain tax matters was performed for the tax years ended October 31, 2025, and October 31, 2024. The Company has elected to retain its existing accounting policy with respect to the treatment of interest and penalties attributable to income taxes and continues to reflect interest and penalties attributable to income taxes, to the extent they arise, as a component of its income tax provision or benefit as well as its outstanding income tax assets and liabilities. The Company believes that its income tax positions and deductions would be sustained upon audit and does not anticipate any adjustments to result in a material change to its financial position. The One Big Beautiful Bill Act of 2025 (the “2025 Tax Act”) was signed into law on July 4, 2025. The 2025 Tax Act makes changes to the U.S corporate income tax, including reinstating the option to claim 100% accelerated depreciation deductions on qualified property, with retroactive application beginning January 20, 2025 and immediate expensing of domestic research and development costs, with retroactive application beginning January 1, 2025. While we are still carefully evaluating the full extent of the 2025 Tax Act’s impact, in 2025 we do not anticipate major changes to our U.S taxes. In the future (2027) we expect our income tax provision to increase primarily due to a decrease in our foreign income deduction under the Act’s global intangible low-taxed income (“GILTI”) provisions. In the Current FY 66.6% of our consolidated net revenue was attributable to the Company’s foreign subsidiaries. The Company’s UK Operations, under the applicable UK tax rules, have certain carryforward trading losses (referred to in this Form 10-K disclosure as “UK NOLs”). Under the applicable UK tax rules, any trading tax losses incurred from 2017 up to and including the current fiscal year can be surrendered for group relief (between and among the Company’s “UK companies”) to offset or reduce current year tax liability relating to any of the UK companies. Any UK NOLs arising before 2017 in a UK company can only be used by the UK company to which it pertains (and cannot be used within the UK tax group). The benefit of these UK NOLs is available indefinitely unless the nature of the business with the tax benefit changes substantially. Under UK tax rules, the UK entities are also eligible for research and development (R&D) Tax Credit. The UK Marine Technology Business in any one financial year performs significant R&D work due to the nature of its business (researching and developing products and solutions) and typically receives R&D allowance. Similarly, PAL performs research and development activities which also qualify for R&D tax credit. In the 2025 FY we believe that our UK R&D allowance will be insufficient to completely eliminate our corporate tax liability and as such we have recorded a current income tax provision for UK entities of $265,434 for 2025 FY, compared to $267,759 for 2024 FY. We have also made a deferred tax provision in our UK entities of $293,052 for 2025 FY. Our UK Operations have the equivalent of $282,273 in NOL carryforwards which, under the applicable rules, are restricted and can only be utilized by the entity in which the loss occurred and therefore is not available for the broader abatement of tax liability of the UK tax group. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2025 and 2024

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