XML 33 R22.htm IDEA: XBRL DOCUMENT v3.24.3
Taxes
 9 Months Ended
Sep. 30, 2024
Taxes [Abstract]  
Taxes

Note 14 – Taxes

 

Income Tax

 

United States

 

GDC was organized in the state of Delaware in April 2015. As of September 30, 2024 and December 31, 2023, GDC’s net operating loss carry forward for United States income taxes was approximately $7.5 million and $6.3 million, respectively. The net operating loss carry forwards are available to reduce future years’ taxable income through year 2040. Management believes that the realization of the benefits from these losses appears uncertain due to the Company’s operating history and continued losses in the United States. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management reviews this valuation allowance periodically and makes changes accordingly.

 

On December 22, 2017, the “Tax Cuts and Jobs Act” (“The 2017 Tax Act”) was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. The 2017 Tax Act imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after March 31, 2017 (increasing to 13.125% for tax years beginning after March 31, 2025) with a partial offset for foreign tax credits. The Company determined that there is no impact of GILTI for the nine months ended September 30, 2024 and 2023, which the Company believes that it will be imposed a minimum tax rate of 10.5% and to the extent foreign tax credits are available to reduce its US corporate tax, which may result in no additional US federal income tax being due.

 

British Virgin Islands

 

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

 

Hong Kong

 

TMSR HK and Highlight HK are incorporated in Hong Kong and are 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. TMSR and Highlight HK are subject to Hong Kong profit tax at a rate of 8.25% for assessable profits on the first HK$2 million and 16.5% for any assessable profits in excess of HK$2 million for the nine months ended September 30, 2024 and 2023. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, TMSR HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.

  

PRC

 

Makesi WFOE, Highlight WFOE, Highlight Media, Yuanma and SH Xianzhui are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments.

 

The current and deferred components of income tax expenses from continuing operations appearing in the unaudited interim consolidated statements of operations are as follows:

 

  

For the nine months ended

September 30,

 
   2024   2023 
   (unaudited)   (unaudited) 
Current tax expenses  $
-
   $
        -
 
Deferred tax benefits   (22,666)   
-
 
Total  $(22,666)  $
-
 

 

The principal components of the Company’s deferred income tax assets and liabilities as of September 30, 2024 and December 31, 2023 are as follows:

 

   September 30,   December 31, 
   2024   2023 
   (unaudited)     
Deferred tax assets        
Net operating losses carried forward  $7,642,653   $6,295,697 
Lease liability   333,422    352,102 
Valuation allowance   (7,976,075)   (6,647,799)
Deferred tax assets, net  $
-
   $
-
 
Deferred tax liabilities          
Right - Of - Use assets  $305,156   $327,822 
Deferred tax liabilities, net  $305,156   $327,822 

 

Value added tax

 

Enterprises or individuals who sell commodities, provide services, engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax (the “VAT”) in accordance with PRC laws. The VAT standard rates changed to 6% to 13% of the gross sales prices starting in April 2019. A credit is available whereby VAT paid on the purchases of services can be used to offset the VAT due on sales of the finished products and services.

 

As of September 30, 2024 and December 31, 2023, there is no balance of the value added tax payable.