FGI Industries Ltd. Income Taxes Disclosure
| For the Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| USD | USD | ||||||||||
| Income components | |||||||||||
| United States | $ | (5,378,499) | $ | (5,300,760) | |||||||
| Outside United States | 1,039,485 | 3,018,662 | |||||||||
| Total pre-tax loss | $ | (4,339,014) | $ | (2,282,098) | |||||||
| Provision for (benefit of) income taxes | |||||||||||
| Current | |||||||||||
| Federal | $ | (944) | $ | 2,809 | |||||||
| State | 4,549 | 46,915 | |||||||||
| Foreign | 328,783 | 899,207 | |||||||||
| 332,388 | 948,931 | ||||||||||
| Deferred | |||||||||||
| Federal | 1,892,588 | (941,331) | |||||||||
| State | 586,651 | (435,241) | |||||||||
| Foreign | (25,235) | (120,180) | |||||||||
| 2,454,004 | (1,496,752) | ||||||||||
| Total provision for (benefit of) income taxes | $ | 2,786,392 | $ | (547,821) | |||||||
| For the Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| USD | % | USD | % | ||||||||||||||||||||
| Income tax expense at Federal statutory tax rate | $ | (911,194) | 21.0 | $ | (479,240) | 21.0 | |||||||||||||||||
| Increase (decrease) in tax rate resulting from: | |||||||||||||||||||||||
State and local income taxes, net of federal benefit(1) | 311,429 | (7.2) | (306,778) | 13.4 | |||||||||||||||||||
| Foreign tax effects (statutory rate differential) | |||||||||||||||||||||||
| Hong Kong | (54,845) | 1.3 | (165,121) | 7.3 | |||||||||||||||||||
| Canada | 158,369 | (3.7) | 150,688 | (6.6) | |||||||||||||||||||
| Cayman Islands | 184,621 | (4.3) | 134,299 | (5.9) | |||||||||||||||||||
| Cambodia | (123,932) | 2.9 | (8,626) | 0.4 | |||||||||||||||||||
| Other | (87,185) | 2.0 | 34,313 | (1.6) | |||||||||||||||||||
| Nontaxable or nondeductible items | 25,721 | (0.6) | 185,639 | (8.1) | |||||||||||||||||||
| Valuation allowance | 3,419,636 | (78.8) | — | — | |||||||||||||||||||
| Other adjustments | (136,228) | 3.2 | (92,995) | 4.1 | |||||||||||||||||||
| Income tax expense | $ | 2,786,392 | (64.2) | $ | (547,821) | 24.0 | |||||||||||||||||
| For the Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| USD | USD | ||||||||||
| Federal | $ | — | $ | — | |||||||
| State | 8,729 | 10,144 | |||||||||
| Foreign | |||||||||||
| Canada | 677,614 | 651,750 | |||||||||
| Germany | 42,607 | 28,129 | |||||||||
| Hong Kong | 30,644 | 418,026 | |||||||||
| Other | 7,309 | 4,591 | |||||||||
| Total cash paid for income taxes, net of refunds received | $ | 766,903 | $ | 1,112,640 | |||||||
| As of December 31, 2025 | As of December 31, 2024 | ||||||||||
| USD | USD | ||||||||||
| Deferred tax assets | |||||||||||
| Allowance for credit losses | $ | 46,824 | $ | 45,859 | |||||||
| Other reserve | 157,620 | 127,515 | |||||||||
| Accrued expenses | 149,705 | 152,600 | |||||||||
| Lease liability | 1,131,158 | 1,464,256 | |||||||||
| Charitable contributions | 923 | 331 | |||||||||
| Business interest limitation | 927,728 | 634,794 | |||||||||
| Net operating loss – federal | 2,257,513 | 976,500 | |||||||||
| Net operating loss – state | 573,279 | 328,861 | |||||||||
| Other | 211,125 | 186,554 | |||||||||
| Total deferred tax assets | 5,455,875 | 3,917,270 | |||||||||
| Less: valuation allowance | (4,013,288) | — | |||||||||
| Net deferred tax assets | 1,442,587 | 3,917,270 | |||||||||
| Deferred tax liabilities | |||||||||||
| Fixed assets | 1,140,919 | 1,416,178 | |||||||||
| Intangibles | 90,087 | (164,493) | |||||||||
| Total deferred tax liabilities | 1,231,006 | 1,251,685 | |||||||||
| Deferred tax assets, net of deferred tax liabilities | $ | 211,581 | $ | 2,665,585 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 10, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Mar 26, 2024 | |
| 2022 | Apr 17, 2023 | |
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.