XML 39 R24.htm IDEA: XBRL DOCUMENT
v3.19.1

Income Taxes, Deferred Tax Assets and Deferred Tax Liabilities | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes, Deferred Tax Assets and Deferred Tax Liabilities |
17. | Income Taxes, Deferred Tax Assets and Deferred Tax Liabilities
| (a) | Income taxes in the consolidated statements of comprehensive loss(income)
The Company's provision for income taxes expenses (credit) consisted of:
|  | December 31, |  | December 31, |
|  | 2017 |  |  | 2018 |
PRC income tax |  | $ | - |  |  | $ | - |
Current |  |  | - |  |  |  | - |
Deferred |  | $ | - |  |  | $ | - |
United States Tax CBAK is a Nevada corporation that is subject to U.S. corporate income tax on its taxable income at a rate of up to 21% for taxable years beginning after December 31, 2017 and U.S. corporate income tax on its taxable income of up to 35% for prior tax years. The U.S. Tax Reform signed into law on December 22, 2017 significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump sum. The U.S. Tax Reform also includes provisions for a new tax on GILTI effective for tax years of foreign corporations beginning after December 31, 2017. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of controlled foreign corporations ("CFCs"), subject to the possible use of foreign tax credits and a deduction equal to 50 percent to offset the income tax liability, subject to some limitations. To the extent that portions of CBAK's U.S. taxable income, such as Subpart F income or GILTI, are determined to be from sources outside of the U.S., subject to certain limitations, the Company may be able to claim foreign tax credits to offset its U.S. income tax liabilities. If dividends that CBAK receives from its subsidiaries are determined to be from sources outside of the U.S., subject to certain limitations, CBAK will generally not be required to pay U.S. corporate income tax on those dividends. Any liabilities for U.S. corporate income tax will be accrued in the Company's consolidated statements of comprehensive income and estimated tax payments will be made when required by U.S. law. No provision for income taxes in the United States has been made as CBAK had no taxable income for the years ended December 31, 2017 and 2018. Hong Kong Tax BAK Asia is subject to Hong Kong profits tax rate of 16.5% and did not have any assessable profits arising in or derived from Hong Kong for the years ended December 31, 2017 and 2018 and accordingly no provision for Hong Kong profits tax was made in these periods. PRC Tax The CIT Law in China applies an income tax rate of 25% to all enterprises but grants preferential tax treatment to High-New Technology Enterprises. CBAK Power was regarded as a "High-new technology enterprise" pursuant to a certificate jointly issued by the relevant Dalian Government authorities. The certificate was valid for three years commencing from year 2018. Under the preferential tax treatment, CBAK Power was entitled to enjoy a tax rate of 15% for the years from 2018 to 2020 provided that the qualifying conditions as a High-new technology enterprise were met. A reconciliation of the provision for income taxes determined at the statutory income tax rate to the Company's income taxes is as follows:
|  | Year ended December 31, 2017 |  |  | Year ended December 31, 2018 |
Loss before income taxes |  | $ | (21,467,341 | ) |  | $ | (1,957,482 | )
United States federal corporate income tax rate |  |  | 35 | % |  |  | 21 | %
Income tax credit computed at United States statutory corporate income tax rate |  |  | (7,513,570 | ) |  |  | (411,071 | )
Reconciling items: |  |  |  |  |  |  |  |
Over provision of deferred taxation in prior year |  |  |  |  |  |  |  |
Rate differential for PRC earnings |  |  | 2,019,848 |  |  |  | (44,325 | )
Non-deductible expenses |  |  | 107,248 |  |  |  | 131,888 |
Share based payments |  |  | 265,752 |  |  |  | 46,448 |
Recognition of tax losses previously not recognized |  |  | (188,647 | ) |  |  | (132,104 | )
Provisional re-measurement of deferred taxes – TCJ Act |  |  | 14,572,726 |  |  |  | - |
Valuation allowance on deferred tax assets |  |  | (9,263,357 | ) |  |  | 409,164 |
Income tax expenses |  | $ | - |  |  | $ | - |
| (b) | Deferred tax assets and deferred tax liabilities
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2017 and 2018 are presented below:
|  | December 31, 2017 |  |  | December 31, 2018 |
Deferred tax assets |  |  |  |  |  |
Trade accounts receivable |  | $ | 1,098,183 |  |  | $ | 1,031,389 |
Inventories |  |  | 1,772,444 |  |  |  | 1,751,161 |
Property, plant and equipment |  |  | 781,227 |  |  |  | 618,416 |
Provision for product warranty |  |  | 569,958 |  |  |  | 562,654 |
Net operating loss carried forward |  |  | 25,892,299 |  |  |  | 26,595,654 |
Valuation allowance |  |  | (30,114,111 | ) |  |  | (30,559,274 | )
Deferred tax assets, non-current |  | $ | - |  |  | $ | - |
Deferred tax liabilities, non-current |  | $ | - |  |  | $ | - |
As of December 31, 2018, the Company's U.S. entity had net operating loss carry forwards of $103,580,741, of which $102,293 available to reduce future taxable income which will expire in various years through 2035 and $103,478,448 available to offset capital gains recognized in the succeeding 5 tax years. As of December 31, 2018, the Company's PRC subsidiaries had net operating loss carry forwards of $19,374,795, which will expire in various years through 2028. Management believes it is more likely than not that the Company will not realize these potential tax benefits as these operations will not generate any operating profits in the foreseeable future. As a result, a valuation allowance was provided against the full amount of the potential tax benefits. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or its withholding agent. The statute of limitations extends to five years under special circumstances, which are not clearly defined. In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration