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INCOME TAXES
 12 Months Ended
Dec. 31, 2013
Notes to Financial Statements  
Note 5 - INCOME TAXES

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate (35%) to pre-tax income (loss) as a result of the following differences:

 

Income (loss)before income taxes   $ 286,685     $ (455 ) 
Taxes (benefit) under statutory U.S. tax rates     86,307       (159 ) 
Increase (decrease) in taxes resulting from:                
Increase in valuation allowance     12,562       574  
Non-U.S. Source income (loss)     (138,550 )      (733 ) 
State taxes     -       -  
Income tax expense   $ (39,681 )    $ -  

 

The Company accounts for income taxes under the asset and liability method, which requires the recognition of tax benefits or expense on the temporary differences between the tax basis and financial statement basis of its assets and liabilities as well as tax loss carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled.

 

Prior to the acquisition of Amplerissimo (see Note 3), the Company had net operating losses in the United States which, although offset by a valuation allowance due to the uncertainty of profitable operations in the future, were able to be applied to future taxable income (if any). However, the Internal Revenue Code Section 382 limits the amount of net operating loss carry-forwards that can be utilized upon a change in control. We have therefore eliminated the deferred tax asset and related valuation allowance.

 

Our wholly-owned Cyprian subsidiary, Amplerissimo, Ltd. has taxable income in Cyprus, where the income tax rate is 12.5%. Deferred tax assets and valuation allowances at December 31, 2013 and December 31, 2012 are as follows:

 

    12/31/2013     12/31/2012  
Deferred tax asset – Net operating loss   $ 13,136     $ 574  
Less: reserve     (13,136 )     (574 )
Net deferred tax asset   $ -       -  

 

At December 31, 2013, the Company had net operating loss forwards of approximately $32,810 that may be offset against future taxable income through 2033. No tax benefit has been reported in the December 31, 2013 or 2012 consolidated financial statements due to the uncertainty surrounding the realizability of the benefit. The potential tax benefit is offset by a valuation allowance of the same amount.

 

The Company applied the “more-likely-than-not” recognition threshold to all tax positions taken or expected to be taken in a tax return, which resulted in no unrecognized tax benefits as of December 31, 2013.

 

The Company has elected to classify interest and penalties that would accrue according to the provisions of relevant tax law as interest and other expense, respectively.

 

The Company’s tax years since inception through 2013 remain open to examination by most taxing authorities.