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Income Taxes
 9 Months Ended
Mar. 31, 2025
Income Taxes [Abstract]  
Income taxes

Note 15 – Income taxes

 

The United States and foreign components of income (loss) before income taxes were comprised of the following:

 

   For the
three months ended		   For the
nine months ended		 
   March 31,   March 31, 
   2025   2024   2025   2024 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
Tax jurisdictions from:                
- Local – United States  $1,368,933   $(1,291,148)  $362,733   $(3,748,688)
- Foreign – Malaysia   (108,968)   (422,167)   (264,976)   (1,275,001)
Income (loss) before income tax  $1,259,965   $(1,713,315)  $97,757   $(5,023,689)

 

United States of America

 

TGL was incorporated in the State of Delaware and is subject to the tax laws of the United States of America. As of March 31, 2025, the operations in the United States of America incurred $9,590,229 of cumulative net operating losses which can be carried forward indefinitely to offset future taxable income and can be used to offset up to 80% of taxable income for losses arising in tax years beginning after June 30, 2023. The deferred tax valuation allowance as of March 31, 2025 and June 30, 2024 were $2,013,948 and $1,751,481, respectively.

 

TGL 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 35%. 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 three and nine months ended March 31, 2025 and 2024, the Company’s foreign subsidiaries did not generate any income that are subject to Subpart F tax and GILTI tax.

 

Malaysia

 

ZCITY, Foodlink, Morgan, and AY Food are governed by the income tax laws of Malaysia and the income tax 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, enterprises that incorporated in Malaysia are usually subject to a unified 24% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. As of March 31, 2025, the operations in the Malaysia incurred $22,298,975 of cumulative net operating losses which can be carried forward for a maximum period of ten consecutive years to offset future taxable income. The deferred tax valuation allowance as of March 31, 2025, and June 30, 2024 were $5,351,754 and $5,288,159, respectively.

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of:

 

  

As of
March 31,
2025

   As of
June 30,
2024		 
    (Unaudited)     
Deferred tax assets:        
Net operating loss carry forwards in U.S.  $2,013,948   $1,751,481 
Net operating loss carry forwards in Malaysia   5,351,754    5,288,159 
Allowance for credit losses   75,131    51,157 
Unrealized holding loss on marketable securities   209,486    173,957 
Change in fair value of derivative liabilities   (374,169)   
-
 
Amortization of debt discount   156,403    156,403 
Less: valuation allowance*   (7,432,553)   
(7,421,157
)
Deferred tax assets  $
-
   $
-
 

 

* Change in valuation allowance was amounted to $69,954 and $1,665,893 for the nine months ended March 31, 2025 and 2024, respectively.

 

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 March 31, 2025 and June 30, 2024, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur interest and penalties tax for the nine months ended March 31, 2024 and 2023.