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INCOME TAXES
 12 Months Ended
Oct. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 7 - INCOME TAXES

 

The Company provides for income taxes and the related accounts under the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to be in effect during the year in which the basis differences reverse. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. As part of the US government’s response to the Pandemic, we have received $701,568 in Employee Retention Credits, which provided funding to keep our employees. This has been recorded as other income for the year ended October 31, 2021.

 

The provision (benefit) for income taxes comprises:

 

   October 31,   October 31, 
   2021   2020 
Current federal benefit  $(25,429)  $(12,502)
Foreign tax expense (benefit)   42,021   (38,161)
           
Total current tax expense (benefit)   16,592   (50,663)
           
Deferred federal expense   288,887    305,125 
Deferred foreign benefit   -    (196,240)
           
Deferred Tax Expense   288,887    108,885 
           
Total Income Tax Expense  $305,479   $58,222 

 

 

CODA OCTOPUS GROUP, INC.

Notes to the Consolidated Financial Statements

October 31, 2021 and 2020

 

NOTE 7 - INCOME TAXES (Continued)

 

The expense for income taxes differed from the U.S. statutory rate due to the following:

 

   October 31,   October 31, 
   2021   2020 
Statutory tax rate   21.0%    21.0%
Change in deferred taxes   (18.4)%   (17.1)%
Alternative Minimum Tax (refund)   0.0%   (1.1)%
Foreign tax (benefit) expense   3.2%   (1.1)%
           
Total   5.8%   1.7%

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

 

Significant components of the Company’s deferred tax assets and liabilities are as follows:

 

   October 31,   October 31, 
   2021   2020 
Noncurrent deferred tax assets          
Temporary differences          
U.S. NOL carryforwards  $15,930   $272,993 
Stock option compensation   -    92,669 
Restricted Stock Awards   72,970   $- 
Book/Tax Depreciation   (12,124)   - 
Foreign fixed assets   18,168    - 
Foreign deferreds   -    

196,240

 
Foreign NOL carryforwards   

148,650

    

143,563

 
           
Total  243,594   705,465 
           
Valuation allowance   (166,818)   (143,563)
           
Total Deferred Asset  $

76,776

   $

561,902

 

 

As of October 31, 2021, we had U.S. federal net operating loss (NOL) carryforwards of $75,857, which expire in 2029.

 

 

CODA OCTOPUS GROUP, INC.

Notes to the Consolidated Financial Statements

October 31, 2021 and 2020