TREASURE GLOBAL INC Income Taxes Disclosure

Note 14 – Income taxes

 

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

 

		For the years ended
		June 30,
		2025				2024
Tax jurisdictions from:
- Local – United States		$	(22,542,326	)		$	(3,919,962	)
- Foreign – Malaysia			(485,675	)			(2,626,946	)
Loss before income tax		$	(23,028,001	)		$	(6,546,908	)

 

The provision for income taxes consisted of the following:

 

		For the years ended
		June 30,
		2025				2024
Tax jurisdictions from:
- Local – United States		$	349,487			$	33,680
- Foreign – Malaysia			-				6,035
Provision for income taxes		$	349,487			$	39,715

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 June 30, 2025, the operations in the United States of America incurred $15,572,252 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 June 30, 2025 and 2024 were $3,270,173 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 years ended June 30, 2025 and 2024, the Company’s foreign subsidiaries did not generate any income that are subject to Subpart F tax and GILTI tax.

 

Malaysia

 

TADAA Technologoies, Foodlink, Morgan, AY Food, and TADAA Ventures 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 June 30, 2025, the operations in the Malaysia incurred $22,519,671 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 June 30, 2025 and 2024 were $5,404,721 and $5,288,159, respectively.

 

The following table reconciles the local (United States) statutory rates to the Company’s effective tax rate for the periods indicated below:

 

		For the years ended
		June 30,
		2025				2024
U.S. statutory rate			21.0	%			21.0	%
Differential of Malaysia statutory tax rate			0.1	%			1.2	%
Change in valuation allowance			(22.5	)%			(18.7	)%
Permanent difference			(0.1	)%			(4.1	)%
Effective tax rate			(1.5	)%			(0.6	)%

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

 

		As of June 30, 2025				As of June 30, 2024
Deferred tax assets:
Net operating loss carry forwards in U.S.		$	3,270,173			$	1,751,481
Net operating loss carry forwards in Malaysia			5,404,721				5,288,159
Allowance for credit losses			261,186				51,157
Unrealized holding loss on marketable securities			-				173,957
Long-live assets impairment			4,098,634				-
Change in fair value of derivative liabilities			(381,553	)			-
Amortization of debt discount			-				156,403
Less: valuation allowance*			(12,653,161	)			(7,421,157	)
Deferred tax assets		$	-			$	-

 

*	Change in valuation allowance was amounted to $5,232,003 and $1,245,262 for the years ended June 30, 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 June 30, 2025 and 2024, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur interest and penalties tax for the years ended June 30, 2025 and 2024.