Taxes

12 Months Ended

Dec. 31, 2025

Taxes [Abstract]

TAXES

16. TAXES

Income tax

Cayman Islands

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments.

BVI

NCA is incorporated in the BVI and is not subject to tax on income or capital gains under current BVI law. In addition, upon payments of dividends by these entities to their shareholders, no BVI withholding tax will be imposed.

Hong Kong

Neo-Concept HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. From year of assessment of 2019/2020 onwards, Hong Kong profits tax rates are 8.25% on assessable profits up to HKD2,000,000, and 16.5% on any part of assessable profits over HKD2,000,000. Under Hong Kong tax law, Neo-Concept HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.

Other jurisdictions

Taxation arising in other jurisdictions such as the UK and the USA is calculated at the rates prevailing in the relevant jurisdictions.

With effect from 1 April 2024, the current main rate of corporation tax in the UK is 25%.

Significant components of the provision for income taxes are as follows:

	For the years ended December 31,
	2023		2024			2025		2025
	HKD		HKD			HKD		US$
Current:
Hong Kong		928,973		348,835			—		—
The UK		388,288		—			310,430		39,883
Deferred:
Hong Kong		7,876		(206,806	)		134,213		17,244
The UK		—		943,880			1,001,988		128,736
Total provision for income taxes		1,325,137		1,085,909			1,446,631		185,863

The following table reconciles Hong Kong statutory rates to the effective tax rate:

	For the years ended December 31,
	2023					2024					2025
	HKD					HKD					HKD			US$
Income before tax		5,739,870					9,149,240					1,778,310			228,478
Income tax rate in the Cayman Islands, permanent tax holiday		—		—			—		—			—			—		—
Hong Kong statutory income tax rate		947,079		16.5	%		1,509,625		16.5	%		293,421			37,699		16.5	%
Effect of different tax rates		120,537		2.1	%		1,383,890		15.1	%		699,819			89,912		39.4	%
Income not taxable (a)		—		—			(4,219	)	—			(367,658	)		(47,237	)	(20.7	)%
Expense not deductible		401,791		7.0	%		164,216		1.8	%		18,259			2,346		1.0	%
Temporary not recognized		22,959		0.4	%		52,472		0.6	%		1,921,169			246,832		108.0	%
Utilization of tax loss		—		—			(1,849,075	)	(20.2	)%		(1,621,122	)		(208,282	)	(91.2	)%
Under provision of tax in prior years		—		—			—		—			502,743			64,593		28.3	%
Tax concession		(167,229	)	(2.9	)%		(171,000	)	(1.9	)%		—			—		—
Effective tax rate		1,325,137		23.1	%		1,085,909		11.9	%		1,446,631			185,863		81.3	%

(a) The amount for the year ended December 31, 2025 is fully represented to reversal of expected credit losses of HKD2,228,229.

Deferred tax assets (liabilities)

Deferred tax assets (liabilities) as of December 31, 2024 and 2025 consisted of the following:

	As of December 31,
	2024			2025			2025
	HKD			HKD			US$
Deferred tax assets:
Tax loss		2,456,246			1,173,027			150,711
Allowance for expected credit losses		440,251			72,592			9,327
Total deferred tax assets		2,896,497			1,245,619			160,038
Valuation allowance		(2,689,691	)		(1,173,027	)		(150,711	)
Deferred tax assets, net of valuation allowance		206,806			72,592			9,327
Deferred tax liabilities:
Depreciation		(920,142	)		(2,014,423	)		(258,813	)
Total deferred tax liabilities		(920,142	)		(2,014,423	)		(258,813	)

As of December 31, 2024 and 2025, the Group had tax loss amounting to HKD9,824,984 and nil, respectively carry forwards. For financial reporting purposes, the amount of the net deferred tax assets has been partially offset by a valuation allowance due to uncertainty regarding the realization of the assets. The management evaluated position taken by the company will “more likely than not” be sustained upon examination by the appropriate tax authority. The Company believes that its income tax filing positions and deductions would be sustained and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain tax positions have been recorded.