INCOME TAX

12 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAX

NOTE – 10 INCOME TAX

For the years ended March 31, 2023 and 2022, the local (“United States of America”) and foreign components of income (loss) before income taxes were comprised of the following:

	Years ended March 31,
	2023			2022
Tax jurisdiction from:
- Local	$	(572,551	)	$	(179,782	)
- Foreign, including
British Virgin Islands		(506,057	)		(3,846	)
Hong Kong		(236,900	)		123,462
Loss before income taxes	$	(1,315,508	)	$	(60,166	)

The provision for income taxes consisted of the following: 

	Years ended March 31,
	2023		2022
Current tax:
- Local	$	–	$	–
- Foreign		–		19,521
Deferred tax
- Local		–		–
- Foreign		–		(19,521	)
Income tax expense	$	–	$	–

The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company mainly operates in Hong Kong that is subject to taxes in the jurisdictions in which they operate, as follows:

United States of America

KRFG is registered in the State of Delaware and is subject to tax laws of the United States of America. The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were not material to its results of operations for the years presented.

As of March 31, 2023, the operations in the United States of America incurred $752,333 of cumulative net operating losses which can be carried forward indefinitely to offset future taxable income. The Company has provided for a full valuation allowance against the deferred tax assets of $157,990 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

BVI

Under the current BVI law, the Company is not subject to tax on income.

Hong Kong

The Company’s subsidiary operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the years ended March 31, 2023 and 2022 is as follows:

	Years ended March 31,
	2023			2022
(Loss) income before income taxes	$	(236,900	)	$	123,462
Statutory income tax rate		16.5%			16.5%
Income tax expense at statutory rate		(39,089	)		20,371
Tax effect of non-deductible items		1,229			62
Tax effect of non-taxable items		(2,207	)		(912	)
Net operating loss carried forward/(utilized)		40,067			(19,521	)
Income tax expense (benefit)	$	–		$	–

As of March 31, 2023, the operations in Hong Kong incurred $1,793,019 of cumulative net operating losses which can be carried forward to offset future taxable income. There is no expiry in net operating loss carryforwards under Hong Kong tax regime. the Company has provided for a full valuation allowance against the deferred tax assets of $295,848 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

The following table sets forth the significant components of the deferred tax assets of the Company as of March 31, 2023 and 2022:

	As of March 31,
	2023			2022
Deferred tax assets:
Net operating loss carryforward, from
US tax regime	$	157,990		$	37,754
Hong Kong tax regime		295,848			256,470
Less: valuation allowance		(453,838	)		(294,224	)
Deferred tax assets, net	$	–		$	–

The Company filed income tax returns in the United States federal tax jurisdiction and the Delaware state tax jurisdiction. Since the Company is in a loss carryforward position, it is generally subject to examination by federal and state tax authority for all tax years in which a loss carryforward is available.