AIRWA INC. Income Taxes Disclosure
Note 11: TAXATION
A reconciliation between the Company’s actual provision for income taxes and the provision calculated under the Hong Kong statutory rate is as follows:
| For the Years Ended | ||||||||
| April 30, | ||||||||
| Description | 2025 | 2024 | ||||||
| Income before income tax | 9,013,368 | 3,988,748 | ||||||
| Tax expense at the Hong Kong profits tax rate of 16.5% | 16.5 | % | 16.5 | % | ||||
| Income tax expenses at statutory rate | 1,487,206 | 658,143 | ||||||
| Tax effect on non-deductible items | 545,721 | 606,205 | ||||||
| Effect of tax exemption scheme and tax reduction | (21,154 | ) | (21,154 | ) | ||||
| Income tax expenses | $ | 2,011,773 | $ | 1,243,194 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 13, 2025 | Showing above |
| 2024 | Jul 25, 2024 | |
| 2023 | Sep 14, 2023 | |
| 2022 | May 17, 2023 | |
| 2021 | Aug 6, 2021 | |
| 2020 | Aug 24, 2020 | |
| 2019 | Aug 6, 2019 | |
| 2018 | Aug 14, 2018 | |
| 2017 | Aug 3, 2017 | |
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.