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TAXATION | 3 Months Ended
--- | ---
Jun. 30, 2025
Income Tax Disclosure [Abstract] |
TAXATION | 12. TAXATION
(a) | Enterprise Income Tax (“EIT”)
The Company operates in the PRC and files tax returns in the PRC. Yingxi Industrial Chain Group Co., Ltd was incorporated in the Republic of Seychelles and, under the current laws of Seychelles, is not subject to income taxes. It is a wholly owned subsidiary of Addentax Group Corp. Yingxi HK (Yingxi Industrial Chain Investment Co., Ltd.) was incorporated in Hong Kong which is indirectly wholly owned by Addentax Group Corp., and is subject to Hong Kong income tax at a progressive rate of 16.5%. No provision for income taxes in Hong Kong has been made as Yingxi HK had no taxable income for the three months ended June 30, 2025 and 2024. Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), our wholly-owned subsidiary, was incorporated in the PRC and is subject to the EIT tax rate of 25%. No provision for income taxes in the PRC has been made as YX had no taxable income for the three months ended June 30, 2025 and 2024. YX is governed by the Income Tax Laws of the PRC. All YX’s operating companies were subject to progressive EIT rates from 5% to 15% in 2025 and 2024. The preferential tax rate will expire at end of year 2025 and the EIT rate will be 25% from year 2026. YX’s parent entity, Addentax Group Corp. is a U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as Addentax Group Corp. had no U.S. taxable income for the three months ended June 30, 2025 and 2024. The reconciliation of income taxes computed at the PRC statutory tax rate applicable to the PRC, to income tax expenses are as follows: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION
|  | 2025 |  |  | 2024 |
|  | Three months ended |
|  | June 30, |
|  | 2025 |  |  | 2024 |
PRC statutory tax rate |  |  | 25 | % |  |  | 25 | %
Computed expected benefits (expense) |  |  | (97,918 | ) |  |  | (305,157 | )
Temporary differences |  |  | 98,917 |  |  |  | 24,191 |
Permanent difference |  |  | (256 | ) |  |  | 32,612 |
Changes in valuation allowance |  |  | 21 |  |  |  | 248,838 |
Income tax expense |  | $ | 764 |  |  | $ | 484 |
Deferred tax assets had not been recognized in respect of any potential tax benefit that may be derived from non-capital loss carry forward and property and equipment due to past negative evidence of previous cumulative net losses and uncertainty upon restructuring. The management will continue to assess at each reporting period to determine the realizability of deferred tax assets.
(b) | Value Added Tax (“VAT”)
In accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is 13%, which is levied on the invoiced value of sales and is payable by the purchaser. The subsidiaries HSW, AOT and YS enjoyed preferential VAT rate of 13%. The companies are required to remit the VAT they collect to the tax authority. A credit is available whereby VAT paid on purchases can be used to offset the VAT due on sales. For services, the applicable VAT rate is 9% under the relevant tax category for a logistics company, except that PF enjoys the preferential VAT rate of 3% in 2025 and 2024. XKJ and PF are required to pay the full amount of VAT calculated at the applicable VAT rate of the invoiced value of sales as required. A credit is available whereby VAT paid on gasoline and toll charges can be used to offset the VAT due on service income.

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