BioNexus Gene Lab Corp Income Taxes Disclosure
NOTE 5 – INCOME TAXES
Loss before income taxes for the years ended December 31, 2025, and 2024 is summarized as follows:
|
| Year ended December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Loss before income taxes: |
|
|
|
|
|
| ||
Local |
| $ | (1,709,197 | ) |
| $ | (1,144,817 | ) |
Foreign, representing Malaysia |
|
| (1,275,410 | ) |
|
| (450,031 | ) |
|
| $ | (2,984,607 | ) |
| $ | (1,594,848 | ) |
Provision for income taxes for the years ended December 31, 2025, and 2024 is summarized as follows:
|
| Year ended December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Current (expense)/benefit: |
|
|
|
|
|
| ||
Federal |
| $ | - |
|
| $ | - |
|
Local |
|
| - |
|
|
| - |
|
Foreign, representing Malaysia |
|
| - |
|
|
| (15,799 | ) |
Total current |
|
| - |
|
|
| (15,799 | ) |
Deferred (expense)/benefit: |
|
|
|
|
|
|
|
|
Federal |
|
| - |
|
|
| - |
|
Local |
|
| - |
|
|
| - |
|
Foreign, representing Malaysia |
|
| - |
|
|
| 12,305 |
|
Total deferred |
|
| - |
|
|
| 12,305 |
|
Total deferred benefit |
| $ | - |
|
| $ | (3,494 | ) |
The income taxes paid (net of refunds) by jurisdiction for the years ended December 31, 2025, and 2024, as reported in the Consolidated Statements of Cash Flows, are as follows:
|
| Year ended December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
U.S. federal |
| $ | - |
|
| $ | - |
|
Foreign, representing Malaysia |
| $ | (28,832 | ) |
| $ | 40,380 |
|
Total income taxes paid/(refunded), net |
| $ | (28,832 | ) |
| $ | 40,380 |
|
The reconciliation of the federal statutory income tax amount and rate to the Company’s effective tax rate for the years ended December 31, 2025, and 2024 is as follows:
|
| Year ended December 31, |
| |||||||||||||
|
| 2025 |
|
| 2024 |
| ||||||||||
|
| Amount |
|
| % |
|
| Amount |
|
| % |
| ||||
Loss before income taxes |
| $ | (2,984,607 | ) |
|
|
|
| $ | (1,594,848 | ) |
|
|
| ||
Federal statutory tax rate |
|
| (626,767 | ) |
|
| 21.00 | % |
|
| (334,924 | ) |
|
| 21.00 | % |
State and local income tax, net of federal income tax effect |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Foreign tax effects: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Malaysia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign rate difference |
|
| (38,262 | ) |
|
| 1.28 | % |
|
| (13,494 | ) |
|
| 0.85 | % |
Non-taxable or non-deductible items |
|
| 186,128 |
|
|
| -6.24 | % |
|
| (149,821 | ) |
|
| 9.39 | % |
Prior year tax adjustment |
|
| - |
|
|
| - |
|
|
| 20,531 |
|
|
| -1.29 | % |
Changes in valuation allowances |
|
| 478,902 |
|
|
| -16.05 | % |
|
| 481,201 |
|
|
| -30.17 | % |
Income tax expense and effective tax rate |
| $ | - |
|
|
| - |
|
| $ | 3,494 |
|
|
| -0.22 | % |
The significant components of deferred taxes of the Company are as follows
|
| As of December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Deferred tax assets |
|
|
|
|
|
| ||
Property, plant and equipment |
| $ | (214,436 | ) |
| (179,429 | ) | |
Capital allowances |
|
| 315,688 |
|
| 204,398 |
| |
Net operating loss (NOL) carryforwards: |
|
|
|
|
|
|
| |
– United States of America |
|
| 8,938,122 |
|
| 8,024,108 |
| |
– Malaysia |
|
| 2,567,801 |
|
| 1,354,566 |
| |
Gross deferred tax assets |
|
| 11,607,175 |
|
| 9,403,642 |
| |
Less: Valuation allowance |
|
| (11,607,175 | ) |
| (9,403,642 | ) | |
Deferred tax assets, net of valuation allowance |
|
| - |
|
| - |
| |
The table below summarizes changes in the valuation allowance for deferred tax assets for the years presented:
|
| Year ended December 31, |
| |||||
|
| 2,025 |
|
| 2,024 |
| ||
Valuation allowance |
|
|
|
|
|
|
|
|
Balance, beginning of year |
| $ | 9,403,642 |
|
| $ | 7,267,659 |
|
Increases in (reversal of) valuation allowance during the year |
|
| 2,203,533 |
|
|
| 2,135,984 |
|
Balance, end of year |
| $ | 11,607,175 |
|
| $ | 9,403,642 |
|
The Company believes that it is more likely than not that the deferred tax assets will not be fully realized in the future. Accordingly, the Company established a valuation allowance of 11,607,175 to offset deferred tax assets of $11,607,175 including deferred tax assets related to the net operating loss (NOL) carry forwards of $11,505,923 as of December 31, 2025.
For the year ended December 31, 2025, a valuation allowance was increased by $2,203,533, this increase was primarily due to an increase of NOL carryforwards of $1,213,235 from the Company’s Malaysia subsidiaries.
United States of America
The Company is registered in the State of Wyoming and is subject to United States of America tax law.
For the years ended December 31, 2025, and 2024, the operations in the United States of America incurred a net operating loss (NOL) of $1,709,197 and $1,144,817, respectively.
As of December 31, 2025, the cumulative net operating losses (NOLs) were $8,938,122 which can be carried forward to offset future taxable income. The NOL carryforwards begin to expire in 2041, if unutilized.
Malaysia
The Company’s subsidiaries operating in Malaysia are subject to the Malaysia Corporate Tax Laws at a standard income tax rate of 24% on their assessable income for the tax year.
For the years ended December 31, 2025, and 2024, the subsidiaries in Malaysia incurred an aggregate net operating loss (NOL) of $1,275,410 and $450,031, respectively
As of December 31, 2025, the operations in Malaysia had incurred the aggregate amount of cumulative net operating losses (NOLs) of $2,567,801 which can be carried forward carried forward indefinitely to offset taxable income in the future. The NOL carryforwards begins to expire in 2029, if unutilized.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 14, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
| 2023 | Apr 16, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Apr 6, 2022 | |
| 2020 | Mar 30, 2021 | |
| 2019 | Mar 31, 2020 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.