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Note 5 - Income Taxes | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
5. | Income taxes
Cayman Islands The Company is incorporated in the Cayman Islands, and is not subject to income tax under the current laws of the Cayman Islands. British Virgin Islands BeyondSpring Ltd. and BVI Biotech are incorporated in the British Virgin Islands, and are not subject to income tax under the current laws of the British Virgin Islands. U.S. BeyondSpring US is incorporated in Delaware, the U.S. It is subject to statutory U.S. Federal corporate income tax at a rate of 35% for the years ended December 31, 2017, 2016 and 2015. BeyondSpring US had no taxable income for all years presented and therefore, no provisions for income taxes were recorded. In December 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. Australia BeyondSpring Australia incorporated in Australia is subject to corporate income tax at a rate of 30%. BeyondSpring Australia has no taxable income for all years presented and therefore, no provision for income taxes is required. Hong Kong BeyondSpring HK is in incorporated in Hong Kong. Companies registered in Hong Kong are subject to Hong Kong Profits Tax on the taxable income as reported in their respective statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. BeyondSpring HK has no taxable income for all years presented and therefore, no provision for income taxes is required. PRC Wanchun Shenzhen and Wanchunbulin are subject to the statutory tax rate of 25% in accordance with the PRC Enterprise Income Tax Law (“EIT Law”), which was effective since January 1, 2008. The components of losses before income taxes are as follows:
|  | Year Ended December 31, |
|  | 2015 |  |  | 2016 |  |  | 2017 |
Cayman Islands |  |  | 489 |  |  |  | 894 |  |  |  | 2,045 |
U.S. |  |  | 5,921 |  |  |  | 9,840 |  |  |  | 80,008 |
PRC |  |  | 1,642 |  |  |  | 1,338 |  |  |  | 11,341 |
BVI |  |  | - |  |  |  | - |  |  |  | 2,498 |
Australia |  |  | - |  |  |  | 473 |  |  |  | 496 |
Net loss before income taxes |  |  | 8,052 |  |  |  | 12,545 |  |  |  | 96,388 |
There were no provisions for current and deferred income taxes because the Company and all of its subsidiaries were losses making and were at cumulative losses for the years presented. A reconciliation of the differences between income tax benefits and the amounts computed by applying the U.S. corporate income tax rate of 35% is as follows:
|  | Year Ended December 31, |
|  | 2015 |  |  | 2016 |  |  | 2017 |
Net loss before income taxes |  |  | 8,052 |  |  |  | 12,545 |  |  |  | 96,388 |
Expected income tax benefit |  |  | 2,818 |  |  |  | 4,391 |  |  |  | 33,736 |
Tax rate differential |  |  | 297 |  |  |  | 581 |  |  |  | 5,796 |
Non-deductible expenses |  |  | (351 | ) |  |  | (152 | ) |  |  | (25,299 | )
Deemed disposal gain* |  |  | - |  |  |  | - |  |  |  | (10,506 | )
Impact of U.S. statutory tax rate change |  |  | - |  |  |  | - |  |  |  | (2,943 | )
Non-taxable income |  |  | - |  |  |  | - |  |  |  | 227 |
Others |  |  | 28 |  |  |  | (63 | ) |  |  | 74 |
Change in valuation allowance |  |  | (2,792 | ) |  |  | (4,757 | ) |  |  | (1,085 | )
Total income tax benefit |  |  | - |  |  |  | - |  |  |  | - |
*Arose from intragroup transfer of certain intellectual property rights. Net deferred tax assets as of December 31, 2016 and 2017 consisted of the following:
|  | December 31, |
|  | 2016 |  |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforward |  |  | 8,317 |  |  |  | 7,244 |
Intangible asset |  |  | 428 |  |  |  | 329 |
Deferral of tax deduction of R&D expense |  |  | 409 |  |  |  | 1,239 |
Share based compensation |  |  | - |  |  |  | 1,427 |
Less: valuation allowance |  |  | (9,154 | ) |  |  | (10,239 | )
Net deferred tax assets |  |  | - |  |  |  | - |
Valuation allowances have been provided on the deferred tax assets where, based on all available evidence, it was considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. The Company recorded a full valuation allowance against deferred tax assets. As of December 31, 2017, the Company had U.S. and PRC tax loss carryforwards of approximately $43,952 and $746, respectively. For losses occurred in the U.S. in years after December 31, 2017, the 2017 Tax Act included a limitation of the deduction for net operating losses to 80% of current year taxable income and a provision where such losses can be carried forward indefinitely. Loss carryforwards in 2017 and prior years are not limited in their current usage, and can be carried forward for 20 years after the year they were generated. Whereas the PRC unused tax losses can be carryforward for 5 years and $746 will fully expire by 2022 if not utilized. As of December 31, 2016 and 2017, the Company determined that it had no material unrecognized tax benefit and accordingly no material related interest and penalty. Management does not expect that the amount of unrecognized tax benefit will increase significantly within the next 12 months. The Company’s subsidiaries in the U.S., Australian and PRC filed income tax returns in the U.S., Australia and PRC, respectively. BeyondSpring US is subject to U.S. federal and state income tax examination by tax authorities for tax years beginning in 2014. BeyondSpring Australia’s tax returns are open to examination by Australian Taxation Office for tax years beginning in 2016. For Wanchun Shenzhen and Wanchunbulin, the tax returns for tax years after 2015 are open to examination by the PRC taxing authorities.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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