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INCOME TAXES | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | 18. INCOME TAXES The United States and foreign components of loss before income taxes were comprised of the following: SCHEDULE OF COMPONENTS OF LOSS BEFORE INCOME TAXES
|  | 2024 |  |  | 2023 |
|  | For the years ended December 31, |
|  | 2024 |  |  | 2023 |
Tax jurisdictions from: |  |  |  |  |  |  |  |
Local – United States |  | $ | (1,706,035 | ) |  | $ | (735,503 | )
Foreign – Malaysia |  |  | (762,788 | ) |  |  | (1,315,491 | )
Foreign – China |  |  | (3,144 | ) |  |  | - |
Foreign – Hong Kong |  |  | (9,143 | ) |  |  | (55,366 | )
Foreign – Tax Jurisdictions |  |  | (9,143 | ) |  |  | (55,366 | )
Loss before income tax |  | $ | (2,481,110 | ) |  | $ | (2,106,360 | )
Income tax expense consisted of the following: SCHEDULE OF INCOME TAX EXPENSE
|  | 2024 |  |  | 2023 |
|  | For the years ended December 31, |
|  | 2024 |  |  | 2023 |
Current: |  |  |  |  |  |  |  |
- Local |  | $ | - |  |  | $ | - |
- Foreign |  |  | (4,934 | ) |  |  | (3,795 | )
Deferred: |  |  |  |  |  |  |  |
- Local |  |  | - |  |  |  | - |
- Foreign |  |  | - |  |  |  | 220 |
Income tax credit (expense) |  | $ | (4,934 | ) |  | $ | (3,575 | )
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company and its subsidiary that operate in various countries: United States, Malaysia (including Labuan), China and Hong Kong that are subject to taxes in the jurisdictions in which they operate, are as follows: United States of America Agape ATP Corporation was incorporated in the State of Nevada and is subject to the tax laws of the United States of America with a corporate tax rate of 21% on its taxable income. Agape ATP Corporation also subject to controlled foreign corporations Subpart F income (“Subpart F”) tax, which is a tax primarily on passive income from controlled foreign corporations with a tax rate of 21%. In addition, the Tax Cuts and Jobs Act imposed a global intangible low-taxed income (“GILTI”) tax, which is a tax on certain off-shore earnings at an effective rate of 10.5% for tax years (50% deduction of the current enacted tax rate of 21%) with a partial offset for 80% foreign tax credits. If the foreign tax rate is 13.125% or higher, there will be no U.S. corporate tax after the 80% foreign tax credits are applied. For the years ended December 31, 2024 and 2023, the Company’s foreign subsidiaries did not generate any income that were subject to Subpart F tax and GILTI tax. AGAPE ATP CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Currency expressed in United States Dollars (“US$”), except for number of shares) 18. INCOME TAXES (CONT’D) As of December 31, 2024 and 2023, the operations in the United States of America incurred approximately $3,799,000 and $2,093,000, respectively, of cumulative net operating losses (“NOL”) which can be carried forward to offset future taxable income or Subpart F and GILTI taxes. These balances can be carried forward indefinitely. The deferred tax valuation allowance related to U.S. net operating losses as of December 31, 2024 and 2023 were approximately $798,000 and $440,000, respectively. As of December 31, 2024, the tax year from 2021 to 2024 remain open for examination in the United States of America. Malaysia Changes to the Labuan Business Activity Tax Act (LBATA) 1990 which was gazetted and came into operation on January 1, 2019 mandate companies incorporated in Labuan to satisfy the “substantial activity requirements” to qualify for the preferential tax rate of 3% on net audited profit. Subsequently, on April 29, 2020, a circular setting out revisions to the “substantial activity requirements” was issued. As Agape ATP Corporation did not maintain a permanent establishment in Labuan, and therefore did not satisfy the said requirements, the company was subjected to tax at 24% on its net audited profit. On June 11, 2021, Agape ATP Corporation made an irrevocable election to be taxed under the Malaysian Income Tax Act 1967 as the elected tax regime is more tax efficient to the entity compare to LBATA. Agape Superior Living Sdn Bhd, Agape S.E.A Sdn Bhd, Cedar ATPC Sdn Bhd, DSY Wellness International Sdn Bhd, ATPC Green Energy Sdn Bhd, OIE ATPC Exim (M) Sdn Bhd are governed by the income taxes laws of Malaysia and the income taxes provision in respect of operations in Malaysia is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Income Tax Act of Malaysia, the tax rate of companies with more than 20% of its paid-up share capital being owned directly or indirectly by a foreign company is 24% for the years ended December 31, 2024 and 2023. As of December 31, 2024 and 2023, the operations in the Malaysia incurred approximately $3,369,000 and $2,796,000, respectively, of cumulative net operating losses (“NOL”) which can be carried forward to offset future taxable income. Approximately $753,000, $842,000, $1,225,000 and $549,000 of the net operating loss carry forwards will expire in 2031, 2032, 2033 and 2034, respectively, if unutilized. The deferred tax valuation allowance related to Malaysia deferred tax assets as of December 31, 2024 and 2023 were approximately $827,000 and $670,000, respectively. As of December 31, 2024, the tax year from 2019 to 2024 remain open for examination in Malaysia. In cases of fraud, wilful default or negligence, there is no limitation to the examination period. Hong Kong Agape ATP International Holding (HK) Limited is subject to Hong Kong Profits Tax, which is charged at the statutory income rate of 16.5% on its assessable income derived from Hong Kong. Business income derived or business expenses incurred outside the Special Administrative Region is not subject to Hong Kong Profits Tax or deduction. China ATPC Technology Private Limited is subject to the Corporate Income Tax governed by the Income Tax Law of the People’s Republic of China with a unified statutory income tax rate of 25%. AGAPE ATP CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Currency expressed in United States Dollars (“US$”), except for number of shares) 18. INCOME TAXES (CONT’D) The following table reconciles the Malaysia statutory rates to the Company’s effective tax rate for the periods indicated below: SCHEDULE OF EFFECTIVE INCOME TAX RATE
|  | 2024 |  |  | 2023 |
|  | For the years ended December 31, |
|  | 2024 |  |  | 2023 |
Malaysia statutory tax rate* |  |  | 24.00 | % |  |  | 24.00 | %
Valuation allowance |  |  | (19.12 | )% |  |  | (20.23 | )%
Differential of local statutory tax rate |  |  | (2.08 | )% |  |  | (1.55 | )%
Permanent difference |  |  | (3.00 | )%(1) |  |  | (2.39 | )%(1)
Effective tax rate |  |  | (0.20 | )% |  |  | (0.17 | )%
* | As the Company business operation mainly concentrated in Malaysia, the Company determined to apply Malaysia statutory tax rate in reconciliation of the statutory tax rate to the effective tax rate.
(1) | The amount comprised:
Expenses incurred in AATP LB, ASL, SEA, CEDAR, AGE, EXIM that are not deductible in the Malaysia tax return.
(1) | The amount comprised: Expenses incurred in AATP LB, ASL, SEA, CEDAR, AGE, EXIM that are not deductible in the Malaysia tax return.
The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of: SCHEDULE OF DEFERRED TAX ASSETS
|  | 2024 |  |  | 2023 |
|  | As of December 31, |
|  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carry forwards in U.S. |  | $ | 797,759 |  |  | $ | 439,492 |
Net operating loss carry forwards in Malaysia |  |  | 824,143 |  |  |  | 664,105 |
Unabsorbed capital allowance carry forward in Malaysia |  |  | 3,245 |  |  |  | 5,577 |
Less: valuation allowance |  |  | (1,625,147 | ) |  |  | (1,108,955 | )
Deferred tax assets, net |  | $ | - |  |  | $ | 219 |
Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2024 and 2023, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur interest and penalties tax for the years ended December 31, 2024 and 2023. AGAPE ATP CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Currency expressed in United States Dollars (“US$”), except for number of shares)

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