Next Technology Holding Inc. Income Taxes Disclosure

NOTE 12 – INCOME TAX EXPENSES 

 

The Company in Wyoming is subject to U.S. federal income tax at 21% and a state income tax rate of nil.

 

There is one subsidiary incorporated in Hong Kong and are subject to Hong Kong profits tax at a tax rate of 16.5%. 

 

The Company owns a subsidiary incorporated in the British Virgin Islands (BVI). Under the current tax laws of BVI, the subsidiary’s income tax rate is nil.

 

The current and deferred portions of income tax expense included in the consolidated statements of comprehensive loss are as follows:

 

		For the years ended December 31,
		2025				2024
Current income tax expense		$	1,904			$	-
Deferred income tax expense			56,381,839				8,234,503
Total		$	56,383,743			$	8,234,503

The income tax expense for domestic and foreign components’ are as follows:

 

		For the years ended December 31,
		2025				2024
US		$	56,383,743			$	8,234,503
Hongkong and BVI			-				-
Total		$	56,383,743			$	8,234,503

 

For the years ended December 31, 2025 and 2024, the Company paid $1,904 and nil for income expense, respectively.

 

The following table reconciles the statutory rate to the Company’s effective tax rate. The effective tax rate reconciliation is based on the U.S. federal statutory rate of 21% and State income tax rate of nil.

 

		For the years ended December 31,
		2025				2024
US Statutory income tax rates			21.0	%			21.0	%
Share-based compensation expense			8.0	%			-
Other permanent difference			(0.7	)%			6.7	%
Effective Income Tax Rate			28.3	%			27.7	%

 

The principal components of deferred tax assets and deferred tax liabilities are as follows: 

 

		As of December 31,
		2025				2024
Deferred tax liabilities
Fair value gain of Bitcoin		$	69,946,762			$	11,199,810
Less: Net operating loss carry forward			5,330,420				2,965,307
Total deferred tax liabilities		$	64,616,342			$	8,234,503

 

As of December 31, 2025 and 2024, the Company had net operating loss carryforwards (“NOLs”) of $21.0 million and $25.4 million for U.S. federal income tax purposes. The federal NOLs do not expire but are subject to an annual deduction limit of 80% of taxable income.