Taxes

12 Months Ended

Jun. 30, 2025

Taxes [Abstract]

TAXES

NOTE 13 — TAXES

(a) Corporate Income Taxes (“CIT”)

Cayman Islands

Under the current tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.

Hong Kong

ICZOOM HK, Ehub, Hjet HK and Components Zone HK are incorporated in Hong Kong and are subject to profit taxes at a rate of 16.5% for taxable income earned in Hong Kong before April 1, 2018. Starting from the financial year commencing on or after April 1, 2018, the two-tiered profits tax rates regime took effect, under which the profits tax rate is 8.25% on assessable profits of the first HK$2 million and 16.5% on any assessable profits in excess of HK$2 million. There is an anti-fragmentation measure where each group will have to nominate only one company in the group to benefit from the progressive rates. As a result, Ehub is nominated by the Company and is subject to tax rate of 8.25% on the first HK$2 million of assessable profits and a tax rate of 16.5% on the remaining profits and ICZOOM HK, Hjet HK and Components Zone HK are subject to Hong Kong profit taxes at a rate of 16.5% for the years ended June 30, 2025 and 2024, respectively.

PRC

ICZOOM WFOE, Hjet Shuntong, ICZOOM Shenzhen, Hjet Supply Chain, Heng Nuo Chen, Hjet Logistics and Pai Ming Shenzhen are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws (“EIT Laws”) and are taxed at the statutory income tax rate of 25%.

EIT grants preferential tax treatment to High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. ICZOOM Shenzhen, one of the Company’s ICZOOM Operating Entities in the PRC, was approved as HNTEs and is entitled to a reduced income tax rate of 15% beginning December 2023, which is valid for three years.

(i) The components of the income tax provision from Cayman Islands, Hong Kong, and China are as follows:

	2025			2024			2023
Current tax provision
Cayman Islands	$	—		$	—		$	—
Hong Kong		(163,776	)		(69,120	)		(84,828	)
China		-			-			(157,376	)
Total		(163,776	)		(69,120	)		(242,204	)
Deferred tax provision benefit
Cayman Islands		—			—			—
Hong Kong		—			(305	)		305
China		(134,632	)		135,141			(23,771	)
Total		(134,632	)		134,836			(23,465	)
Income tax (expenses)/benefit	$	(298,408	)	$	65,716		$	(265,670	)

Reconciliation of the differences between the income tax provision computed based on PRC statutory income tax rate and the Company’s actual income tax provision for the years ended June 30, 2025, 2024 and 2023, respectively are as follows:

	For the Years Ended June 30,
	2025			2024			2023
Income tax (benefit)expense computed based on PRC statutory rate	$	316,598		$	(584,503	)	$	504,210
Effect of rate differential for Hong Kong entities		(581,814	)		523,579			(110,932	)
Non-deductible expenses:
Stock-based compensation*		608,573			-			14,649
Meals and entertainment		2,960			6,869			3,375
Less: Deductible expense		(18,998	)		-			-
Change in valuation allowance		(28,911	)		(11,661	)		(145,632	)
Actual income tax (expenses) /benefit	$	(298,408	)	$	65,716		$	(265,670	)

* The Company’s stock-based compensation expenses were recorded under the Cayman parent company level. Pursuant to the current tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. As a result, stock-based compensation expenses are non-deductible expenses for income tax purposes.

Deferred tax assets

The Company’s deferred tax assets are comprised of the following:

	June 30, 2025			June 30, 2024
Deferred tax assets derived from net operating loss (“NOL”) carry forwards	$	134,632		$	533,757
Less: valuation allowance		(134,632	)		(398,659	)
Deferred tax assets	$	-		$	135,098

Movement of valuation allowance:

	June 30, 2025			June 30, 2024
Balance at beginning of the year	$	398,659		$	406,760
Change of valuation allowance		(264,027	)		(8,101	)
Balance at end of the year	$	134,632		$	398,659

The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect the Company’s future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company has four subsidiaries in HK, including ICZOOM HK, Components Zone HK, Hjet HK and Ehub, among which Components Zone HK were reported recurring operating losses since 2015 to June 2025. In addition, the Company also has five subsidiaries in the PRC, among which, Hjet Shuntong were also reported recurring operating losses since 2015 to June 2025.

Management concluded that the chances for the above-mentioned HK and PRC subsidiaries to be profitable in the foreseeable near future and to utilize their net operating loss carry forwards were uncertainty. Accordingly, the Company provided valuation allowance of $134,632, $398,659 and $406,760 for the deferred tax assets of these subsidiaries for the years ended June 30, 2025, 2024 and 2023 respectively.

(b) Taxes payable

Taxes payable consist of the following:

	June 30, 2025		June 30, 2024
Income tax payable	$	2,401,084	$	2,308,231
Value added tax payable		1,105,522		943,253
Total taxes payable	$	3,506,606	$	3,251,484