OSR Holdings, Inc. Income Taxes Disclosure

(22)	Income taxes

 

A summary of income tax benefit for the years ended December 31, 2025 and 2024, is as follows:

 

		Year ended December 31
		2025				2024
Current:
Primary jurisdiction (Republic of Korea)		$	1,829,820			$	1,563,768
Foreign			—				—
			1,829,820				1,563,768
Deferred:
Primary jurisdiction (Republic of Korea)			—				—
Foreign			—				—
			—				—
Income tax benefits		$	1,829,820			$	1,563,768

 

There is no deferred tax recognized in other than net income for the years ended December 31, 2025 and 2024.

The provision for income taxes differs from that computed by applying statutory rates to loss before income taxes. Explanations of the relationship between income tax benefits and accounting loss for the years ended December 31, 2025 and 2024 are as follows:

 

		2025				2024
Loss before income taxes		$	(28,888,361	)		$	(11,892,678	)
Income tax based on statutory tax rate			5,806,050				2,493,699
Adjustments:
Tax credit			-				(1,284	)
Special tax for rural areas			-				198
Unrecognized changes in temporary differences			(2,110,974	)			(449,656	)
Others (changes in effective tax rate)			(1,865,256	)			(479,189	)
Income tax benefits		$	1,829,820			$	1,563,768

 

In assessing the reliability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon these considerations as of December 31, 2025 and 2024, the Company had a full valuation allowance for the net deferred tax assets on one of its Asian subsidiaries and certain of its European subsidiaries. Also, as of December 31, 2025 and 2024, the Company had a partial valuation allowance offsetting certain deferred tax assets of another one of its Asian subsidiaries. Management believes that it is more likely than not that the Company will realize the benefits of the remaining deductible differences, net of valuation allowances, at December 31, 2025.

 

Items that result in deferred tax assets and liabilities at December 31, 2025 and 2024 are as follows:

 

		Year ended December 31
		2025				2024
Deferred tax assets:
Account payable (severance)		$	35,818			$	54,400
Interest payable			80,894				69,942
Amortization of intangible assets			511,742				386,589
Net operating loss carryforward			1,204,917				627,897
Other			(220,736	)			(202,597	)
Gross Deferred tax assets			1,612,635				936,231
Valuation allowance			(1,412,120	)			(844,130	)
Total deferred tax assets			200,515				92,101
Deferred tax liabilities:
PPA effect			(27,021,305	)			(28,035,508	)
Total deferred tax liabilities			(27,021,305	)			(28,035,508	)
Net deferred tax liabilities		$	(26,820,790	)		$	(27,943,407	)

 

The Company did not have any material uncertain tax positions, which should be recognized in the consolidated financial statements as of December 31, 2025. In addition, the Company did not have any unrecognized tax benefits, which, if recognized, would affect the effective tax rate for the years then ended.