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Taxation | 12 Months Ended
--- | ---
Dec. 31, 2023
Taxation [Abstract] |
TAXATION |
17. | TAXATION
Value added tax (“VAT”) GF Cash (CIT) and AI R&I are subsidiaries operating in Thailand, which are subject to a statutory VAT of 7% for services in Thailand. Shenzhen GFAI, Guangzhou GFAI and Beijing Wanjia are the subsidiaries operating in the PRC, which are subject to a statutory VAT of 13% for goods delivered and rental provided, 6% for services provided and 9% for construction projects in the PRC. The output VAT is charged to customers who receive services from the Company and the input VAT is paid when the Company purchases goods and services from its vendors. The input VAT can be offset against the output VAT. The VAT payable is presented on the balance sheets when input VAT is less than the output VAT. A recoverable balance is presented on the balance sheets when input VAT is larger than the output VAT. Income taxes Cayman Islands The Company is incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholding tax in the Cayman Islands. British Virgin Islands The Company’s subsidiary incorporated in the BVI is not subject to taxation. The Company’s operating subsidiaries incorporated in different tax jurisdiction are subject to different corporate income tax rate as follows:
|  | Corporate income tax rate |
Hong Kong |  |  | 16.5 | %
Singapore |  |  | 17.0 | %
Thailand |  |  | 20.0 | %
Malaysia |  |  | 24.0 | %
Macau |  |  | 12.0 | %
United States |  |  | 21.0 | %
Australia |  |  | 0.0 | %
United Arab Emirates |  |  | 25.0 | %
United Kingdom |  |  | 19.0 | %
South Korea |  |  | 25.0 | %
Japan |  |  | 23.2 | %
Canada |  |  | 15.0 | %
Vietnam |  |  | 20.0 | %
China |  |  | 25.0 | %
Pre-tax profit (loss) from continuing operations, by jurisdiction, for the years ended December 31, 2023, 2022 and 2021 is as follows:
|  | For the years ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Cayman Islands |  | $ | (4,100,487 | ) |  | $ | (4,302,089 | ) |  | $ | (1,733,786 | )
BVI |  |  | (16,537 | ) |  |  | (17,811 | ) |  |  | (12,769 | )
Hong Kong |  |  | (10,805,695 | ) |  |  | (3,245,238 | ) |  |  | (628,015 | )
Singapore |  |  | (180,619 | ) |  |  | (160,228 | ) |  |  | (16,041 | )
Thailand |  |  | (2,852,376 | ) |  |  | (5,826,236 | ) |  |  | (3,873,611 | )
Malaysia |  |  | (2,761,202 | ) |  |  | (478,658 | ) |  |  | - |
Macau |  |  | (193,865 | ) |  |  | (161,513 | ) |  |  | - |
United States |  |  | (321,399 | ) |  |  | (572,088 | ) |  |  | - |
Australia |  |  | 15,199 |  |  |  | (15,199 | ) |  |  | - |
United Arab Emirates (UAE) |  |  | (22,157 | ) |  |  | (72,036 | ) |  |  | - |
United Kingdom |  |  | 1,350 |  |  |  | (1,350 | ) |  |  | - |
South Korea |  |  | (11,236 | ) |  |  | (20,029 | ) |  |  | - |
Japan |  |  | (189,773 | ) |  |  | (77,055 | ) |  |  | - |
Canada |  |  | 3,418 |  |  |  | (2,997 | ) |  |  | - |
Vietnam |  |  | 17,123 |  |  |  | (17,123 | ) |  |  | - |
China |  |  | (7,770,944 | ) |  |  | (3,501,768 | ) |  |  | - |
|  | $ | (29,189,200 | ) |  | $ | (18,471,418 | ) |  | $ | (6,264,222 | )
The components of the income tax provision are:
|  | For the years ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current income tax expense |  | $ | - |  |  | $ | - |  |  | $ | - |
Deferred income tax expense (benefit) |  |  | (434,320 | ) |  |  | 132,208 |  |  |  | (732,868 | )
Total income tax (benefit) expense |  | $ | (434,320 | ) |  | $ | 132,208 |  |  | $ | (732,868 | )
Reconciliation between the statutory tax rate to income before income taxes and the actual provision for income taxes is as follows:
|  | For the years ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
(Loss) Profit before income tax expense* |  | $ | (994,531 | ) |  | $ | (3,840,120 | ) |  | $ | (4,068,887 | )
Thailand income tax statutory rate |  |  | 20 | % |  |  | 20 | % |  |  | 20 | %
Income tax at statutory tax rate |  |  | (198,906 | ) |  |  | (768,024 | ) |  |  | (813,777 | )
Deferred tax assets not recognized |  |  | 713,468 |  |  |  | 768,024 |  |  |  | - |
Permanent differences |  |  | (80,242 | ) |  |  | 132,208 |  |  |  | 80,910 |
Income tax expense (benefit) |  | $ | 434,320 |  |  | $ | 132,208 |  |  | $ | (732,868 | )
| * | This amount represents profit before income tax after adjustments for non-deductible and non-taxable expense items from the Thailand operating entity.
Deferred tax assets and liabilities are comprised of the following:
|  | As of December 31, |
|  | 2023 |  |  | 2022 |
Provision for employee benefits |  | $ | 982,013 |  |  | $ | 965,560 |
Net operating loss carried forward |  |  | 893,693 |  |  |  | 671,894 |
Valuation allowance |  |  | (724,866 | ) |  |  | - |
Deferred tax assets |  |  | 1,150,840 |  |  |  | 1,637,454 |
Less: |  |  |  |  |  |  |  |
Deferred tax liabilities - finance leases |  |  | (65,363 | ) |  |  | (125,701 | )
Deferred tax assets, net |  | $ | 1,085,477 |  |  | $ | 1,511,753 |

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