Lichen International Ltd
For the period ended Jun 30, 2025. Filed Sep 19, 2025.
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Jun 30, 2025 · Filed Sep 19, 2025
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Contents
EX-99.2 · PRC
PRC
The Company’s PRC subsidiaries are governed by the income tax laws of the PRC and the income tax expense in respect to operations in the PRC 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 Enterprise Income Tax Laws of the PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. For the six months ended June 30, 2025 and 2024, there was no preferential tax rate.
| i) | The components of the income tax expense are as follows: |
|---|
| For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | |
|---|---|---|
| In thousands of USD | ||
| Provisions for current income tax | $88 | $1,000 |
| Provisions for deferred income tax | - | - |
| Total | $88 | $1,000 |
There are no deferred tax assets recognized or impaired for the six months ended June 30, 2025 and 2024.
| ii) | The following table reconciles PRC statutory rates to the Company’s effective tax rate: |
|---|
The following table reconciles the China statutory rates to the Company’s effective tax rate for the six months ended June 30, 2025 and 2024:
| For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | |
|---|---|---|
| PRC statutory income tax rate | 25.0% | 25.0% |
| Effect of different tax jurisdiction | (3.4)% | - |
| Non-deductible expenses (1) | (0.5)% | 6.6% |
| Change in valuation allowance | (20.2)% | (1.7)% |
| Effective income tax rate | 0.9% | 29.9% |
| (1) | Non-deductible expenses represented meal and entertainment fees not-deductible in PRC tax returns. |
| iii) | Deferred tax assets |
|---|
| For the six months ended June 30, 2025 · For the six months ended June 30, 2024 | ||||
|---|---|---|---|---|
| Deferred tax assets: | In thousands of USD | |||
| Net accumulated loss-carry forward | $3,385 | $527 | ||
| Less: valuation allowance | (3,385) | (527) | ||
| Net deferred tax assets | $ | - | $ | - |
Movement of valuation allowance is as follows:
| For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | |
|---|---|---|
| In thousands of USD | ||
| Beginning balance | $2,001 | $972 |
| Write-off | (612) | (512) |
| Change of valuation allowance | 1,996 | 67 |
| Ending balance | $3,385 | $527 |
Certain subsidiaries had tax loss of approximately $0.85 million and $0.27 million for the six months ended June 30, 2025 and 2024 respectively, which can be carried forward to offset future taxable income. The carryforwards period for net operating losses under the EIT Law is five years. Valuation allowance is provided against deferred tax assets when the Company determines that it is more likely than not that the deferred tax assets will not be utilized in the future.
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 December 31, 2024, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur interest and penalties during the six months ended June 30, 2025 and 2024.
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