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INCOME TAXES | 12 Months Ended
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Oct. 31, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 8 - 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. The provision (benefit) for income taxes comprises: SCHEDULE OF PROVISION (BENEFIT) FOR INCOME TAXES
|  | October 31, |  |  | October 31, |
|  | 2022 |  |  | 2021 |
Current federal expense |  | $ | 849,580 |  |  | $ | (25,429 | )
Current state income tax expense |  |  | 159,900 |  |  |  | - |
Foreign tax (benefit) expense |  |  | (4,340 | ) |  |  | 42,021 |
Total current tax expense |  |  | 1,005,140 |  |  |  | 16,592 |
Deferred federal (benefit) expense |  |  | (174,026 | ) |  |  | 288,887 |
Deferred Tax (Benefit) Expense |  |  | (174,026 | ) |  |  | 288,887 |
Total Income Tax Expense |  | $ | 831,114 |  |  | $ | 305,479 |
CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2021 and 2020 NOTE 8 - INCOME TAXES (Continued) The expense for income taxes differed from the U.S. statutory rate due to the following: SCHEDULE OF RECONCILIATION OF INCOME TAX BENEFIT
|  | October 31, |  |  | October 31, |
|  | 2022 |  |  | 2021 |
Statutory tax rate |  |  | 21.0 | % |  |  | 21.0 | %
R&D Relief |  |  | (10.6 | )% |  |  | (18.4 | )%
Change in valuation allowance |  |  | 3.7 | % |  |  | 0.0 | %
Foreign tax (benefit) expense |  |  | (0.9 | )% |  |  | 3.2 | %
State Income Tax |  |  | 3.0 | % |  |  | 0.0 | %
Total |  |  | 16.2 | % |  |  | 5.8 | %
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: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES
|  | October 31, |  |  | October 31, |
|  | 2022 |  |  | 2021 |
Noncurrent deferred tax assets |  |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |  |
U.S. NOL carryforwards |  | $ | - |  |  | $ | 15,930 |
Deferred Revenue |  |  | 4,830 |  |  |  | - |
Restricted Stock Awards |  |  | 272,841 |  |  |  | 72,970 |
Book/Tax Depreciation |  |  | (17,861 | ) |  |  | (12,124 | )
Foreign fixed assets |  |  | (84,381 | ) |  |  | 18,168 |
Foreign NOL carryforwards |  |  | 409,100 |  |  |  | 148,650 |
Total |  |  | 584,529 |  |  |  | 243,594 |
Valuation allowance |  |  | (324,719 | ) |  |  | (166,818 | )
Total Deferred Asset |  | $ | 259,810 |  |  | $ | 76,776 |
As of October 31, 2022, we had no remaining U.S. federal net operating loss (NOL) carryforwards. The Company has filed tax returns for federal, state, and foreign jurisdictions. The Company’s evaluation of uncertain tax matters was performed for the tax years ended October 31, 2022, and 2021. The Company has elected to retain its existing accounting policy with respect to the treatment of interest and penalties attributable to income taxes and continues to reflect interest and penalties attributable to income taxes, to extent they arise, as a component of its income tax provision or benefit as well as its outstanding income tax assets and liabilities. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments to result in a material change to its financial position. The Company’s UK Operations, under the applicable UK tax rules, have certain trading losses (referred to in this disclosure as “NOL carryforwards”). Under the applicable UK tax rules, any trading tax losses incurred from 2017 up to and including the current fiscal year can be surrendered for group relief to offset or reduce current year profits and tax liability in any of our UK Operations. Any tax losses before 2017 in a UK entity can only be used in the entity to which it pertains. The tax losses are available indefinitely unless the nature of the business with the trading loss benefit changes substantially. Under UK tax rules, the UK entities are also eligible for R&D Tax Credit. The UK Products Business in any one FY performs significant R&D work due to the nature of its business (researching and developing products and solutions). In the 2022 FY, we were eligible to deduct £2,246,251 (an equivalent of USD $2,819,389,) as R&D tax expenses from our taxable income, thus negating any tax liability of the UK Operations in the Current FY. Our UK Operations have $1.3m in NOL carryforwards, $0.48m of which can be used by the UK entity in which the trading loss was created and $0.82M can be used by any or all UK entities. This applies indefinitely unless the business activities undertaken change substantially. A valuation allowance is required for deferred tax assets, if based on available evidence, it is more likely than not that that all or some portion of the asset will not be realized due to the inability to generate sufficient taxable income in the future. The deferred tax losses refer to timing of asset allowance in the UK. As we are generally able to offset most taxes with brought forward trading losses, R&D tax credit to offset profits expected to be ongoing and ability to utilize such reliefs within between entities then we do not foresee being able to utilize those deferred tax assets in the near future. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2022 and 2021

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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