Income Taxes

6 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

INCOME TAXES

NOTE 6. INCOME TAXES

United States

Longduoduo is subject to the U.S. corporation tax rate of 21%.

Hong Kong

Longduoduo HK was incorporated in Hong Kong and is subject to Hong Kong profits tax. Longduoduo HK is subject to Hong Kong taxation on its activities conducted in Hong Kong and income arising in or derived from Hong Kong. The applicable statutory tax rate is 16.5%. The Company did not have any income (loss) subject to the Hong Kong profits tax.

China

Longduoduo Health Technology and subsidiaries are subject to a 25% standard enterprise income tax in the PRC. The Company accrued $216,973 of PRC income tax for the six months ended December 31, 2023. There was no provision for income taxes for the six months ended December 31, 2022.

A summary of income (loss) before income taxes for domestic and foreign locations for the three and six months ended December 31, 2023 and 2022 is as follows:

	For the Three Months Ended December 31,
	2023			2022
United States	$	(102,290	)	$	(34,979	)
Foreign		361,191			(141,181	)
Income (loss) before income taxes	$	258,901		$	(176,160	)

	For the Six Months Ended December 31,
	2023			2022
United States	$	(135,666	)	$	(92,389	)
Foreign		830,211			(399,203	)
Income (loss) before income taxes	$	694,545		$	(491,592	)

The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows:

	For the Six Months Ended December 31,
	2023			2022
Income tax (benefit) at USA statutory rate		(21	)%		(21	)%
U.S. valuation allowance		21	%		21	%
Income tax (benefit) at USA effective rate		(0	)%		(0	)%

The difference between the PRC statutory income tax rate and the PRC effective tax rate was as follows:

	For the Six Months Ended December 31,
	2023			2022
Income tax (benefit) at PRC statutory rate		25	%		(25	)%
Utilization of net operating loss carry forward		(1	)%		-
PRC valuation allowance		4	%		25	%
Other		(2	)%		-
Income tax (benefit) at PRC effective rate		26	%		(0	)%

For the six months ended December 31, 2022, the Company did not recognize deferred tax assets since at that time it did not appear more likely than not that it would realize such deferred taxes. The deferred tax would apply to Longduoduo in the U.S. and Longduoduo Health Technology and subsidiaries in China.

As of December 31, 2023, Longduoduo Health Technology and its subsidiaries have total net operating loss carry forwards of approximately $472,212 in the PRC that expire through 2028. Due to the uncertainty of utilizing these carry forwards, the Company provided a 100% allowance on all deferred tax assets of approximately $118,053 and $87,494 related to its operations in the PRC as of December 31, 2023 and June 30, 2023, respectively. The PRC valuation allowance increased by $30,559 and $100,055 for the six months ended December 31, 2023 and December 31, 2022, respectively.

The Company incurred losses from its United States operations during the six months ended December 31, 2023 of approximately $135,666. The Company’s United States operations consist solely of ownership of its foreign subsidiaries, and the losses arise from administration expenses. Accordingly, management provided a 100% valuation allowance of approximately $199,817 and $171,327 against the deferred tax assets related to the Company’s United States operations as of December 31, 2023 and June 30, 2023, respectively, because the deferred tax benefits of the net operating loss carry forwards in the United States are not more likely than not to be utilized. The US valuation allowance has increased by approximately $28,490 and $19,402 for the six months ended December 31, 2023, and 2022, respectively.

The Company is subject to examination by the Internal Revenue Service (IRS) in the United States as well as by the taxing authorities in China, where the Company has significant business operations. The table below presents the earliest tax year that remains subject to examination by major jurisdiction. 

	Earliest tax year that remains subject to examination
U.S. Federal	June 30, 2021
China	June 30, 2020