Quarterly report pursuant to Section 13 or 15(d)

INCOME TAXES

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INCOME TAXES
9 Months Ended
Mar. 31, 2019
Income Tax Disclosure [Abstract]  
INCOME TAXES

Note 10 – income taxes 

 

The Company was incorporated in the United States of America, is subject to U.S. tax and plans to file U.S. federal income tax returns. The Company conducts all of its businesses through its subsidiaries and affiliated entities, principally in the PRC. No provision for US federal income tax was made for the nine months ended March 31, 2019 and 2018 as the US entity incurred losses.

 

The Company’s offshore subsidiary, Shuhai Skill (HK), did not earn any income that was derived in Hong Kong for the nine months ended March 31, 2019 and 2018 and therefore did not incur any Hong Kong Profits tax. 

 

Under the Corporate Income Tax Law of the PRC, the corporate income tax rate is 25%. 

 

The Company had net operating losses (“NOL”) of $540,999 and $438,937 during three months ended March 31, 2019 and 2018, respectively, $1,284,936 and $1,238,935 during nine months ended March 31, 2019 and 2018 respectively. Management believes that it is more likely than not that the benefit from the NOL carryforwards will not be realized. In recognition of this risk, the Company has provided a 100% valuation as of March 31, 2019 and 2018 and no deferred tax asset has been recorded. 

 

The provisions for income taxes is summarized as follows:

 

    Nine months ended 
March 31, 2019
(Unaudited)
    Nine months ended 
March 31, 2018
(Unaudited)
 
Current   $     $  
Deferred     321,234       309,734  
Increase in valuation allowance     (321,234 )     (309,734 )
Total   $     $  

  

    Three months ended
March 31, 2019
(Unaudited)
    Three months ended  
March 31, 2018  
(Unaudited)
 
Current   $     $  
Deferred     135,250       109,734  
Increase in valuation allowance     (135,250 )     (109,734 )
Total   $     $  

 

The Company’s net deferred tax asset as of March 31, 2019 and June 30, 2018 is as follows:

 

    March 31, 2019
(Unaudited)
    June 30, 2018  
Deferred tax asset – Net Operating Loss   $ 1,307,329     $ 986,095  
Valuation allowance     (1,307,329 )     (986,095 )
Net deferred tax asset   $     $