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Taxes Payable | 12 Months Ended
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Jun. 30, 2017
Taxes Payable [Abstract] |
TAXES PAYABLE | NOTE 11 – TAXES PAYABLE Enterprise Income Tax Effective January 1, 2008, the Enterprise Income Tax (“EIT”) law of the PRC replaced the tax laws for Domestic Enterprises (“DEs”) and Foreign Invested Enterprises (“FIEs”). The EIT rate of 25% replaced the 33% rate that was applicable to both DEs and FIEs. The two-year tax exemption and three-year 50% tax reduction tax holiday for production-oriented FIEs was eliminated. Since January 1, 2008, Jinong became subject to income tax in China at a rate of 15% as a high-tech company, because of the expiration of its tax exemption on December 31, 2007. Accordingly, it made provision for income taxes for the years ended June 30, 2017 and 2016 of $3,521,978 and $3,592,823, respectively, which is mainly due to the operating income from Jinong. Gufeng is subject to 25% EIT rate and thus it made provision for income taxes of $2,148,326 and $3,584,006 for the year ended June 30, 2017 and 2016, respectively. Value-Added Tax Certain fertilizer products that are produced and sold in the PRC were subject to a Chinese Value-Added Tax (VAT) of 13% of the gross sales price. On April 29, 2008, the PRC State of Administration of Taxation (SAT) released Notice #56, “Exemption of VAT for Organic Fertilizer Products”, which allows certain fertilizer products to be exempt from VAT beginning June 1, 2008. The Company submitted the application for exemption in May 2009, which was granted effective September 1, 2009, continuing through December 31, 2015. Income Taxes and Related Payables Taxes payable consisted of the following:
|  | June 30, |  |  | June 30, |
|  | 2017 |  |  | 2016 |
VAT provision |  | $ | (575,872 | ) |  | $ | 2,218 |
Income tax payable |  |  | 2,229,735 |  |  |  | 3,445,480 |
Other levies |  |  | 1,036,544 |  |  |  | 656,520 |
Total |  | $ | 2,690,407 |  |  | $ | 4,104,218 |
The provision for income taxes consists of the following:
|  | Years Ended June 30, |
|  | 2017 |  |  | 2016 |
Current tax - foreign |  | $ | 6,511,880 |  |  | $ | 7,371,967 |
Deferred tax |  |  | - |  |  |  | - |
|  | $ | 6,511,880 |  |  | $ | 7,371,967 |
The components of deferred income tax assets and liabilities are as follows:
|  | June 30, |  |  | June 30, |
|  | 2017 |  |  | 2016 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss |  | $ | 14,607,802 |  |  | $ | 13,803,943 |
Total deferred tax assets |  |  | 14,607,802 |  |  |  | 13,803,943 |
Less valuation allowance |  |  | (14,607,802 | ) |  |  | (13,803,943 | )
|  | $ | - |  |  | $ | - |
The Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors. At June 30, 2017, based on the weight of available evidence, including cumulative losses in recent years and expectations of future taxable income, the Company determined that it was more likely than not that its deferred tax assets would not be realized and have a $14.6 million valuation allowance associated with its deferred tax assets. Tax Rate Reconciliation Our effective tax rates were approximately 20.6% and 21.6% for years ended June 30, 2017 and 2016, respectively. Substantially all the Company’s income before income taxes and related tax expense are from PRC sources. Actual income tax benefit reported in the consolidated statements of income and comprehensive income differ from the amounts computed by applying the US statutory income tax rate of 34% to income before income taxes for the years ended June 30, 2017 and 2016 for the following reasons: June 30, 2017
Tax Rate Reconciliation
|  | China |  |  | United States |  |  |  |  |  |  |
|  |  | 15% - 25% |  |  |  | 34% |  |  |  | Total |  |  |  |  |
Pretax income (loss) |  | $ | 34,028,617 |  |  |  |  |  |  | $ | (2,364,584 | ) |  |  |  |  |  | $ | 31,664,033 |  |  |  |  |
Expected income tax expense (benefit) |  |  | 8,507,154 |  |  |  | 25 | % |  |  | (803,958 | ) |  |  | 34 | % |  |  | 7,703,196 |  |  |  |  |
High-tech income benefits on Jinong |  |  | (2,033,489 | ) |  |  | -6.0 | % |  |  |  |  |  |  |  |  |  |  | (2,033,489 | ) |  |  |  |
Gains from subsidiaries in which additional benefit is recognized |  |  | 38,215 |  |  |  | 0.1 | % |  |  |  |  |  |  |  |  |  |  | 38,215 |  |  |  |  |
Change in valuation allowance on deferred tax asset from US tax benefit |  |  | 0 |  |  |  |  |  |  |  | 803,958 |  |  |  | (34) | % |  |  | 803,958 |  |  |  |  |
Actual tax expense |  | $ | 6,511,880 |  |  |  | 19.1 | % |  | $ | 0 |  |  |  | 0 | % |  | $ | 6,511,880 |  |  |  | 20.6 | %
June 30, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | China |  |  | United States |  |  |  |  |  |  |
|  | 15% - 25% |  |  | 34% |  |  | Total |  |  |  |
Pretax income (loss) |  | $ | 32,076,160 |  |  |  |  |  |  |  | (5,768,770 | ) |  |  |  |  |  | $ | 26,307,390 |  |  |  |  |
Expected income tax expense (benefit) |  |  | 8,019,040 |  |  |  | 25.0 | % |  |  | (1,961,382 | ) |  |  | 34.0 | % |  |  | 6,062,571 |  |  |  |  |
High-tech income benefits on Jinong |  |  | (2,214,672 | ) |  |  | (5.7 | )% |  |  | - |  |  |  | - |  |  |  | (2,214,672 | ) |  |  |  |
Losses from subsidiaries in which no benefit is recognized |  |  | 1,567,599 | ) |  |  | (0.8 | )% |  |  | - |  |  |  | - |  |  |  | 1,567,599 | ) |  |  |  |
Change in valuation allowance on deferred tax asset from US tax benefit |  |  | - |  |  |  |  |  |  |  | 1,961,382 |  |  |  | (34.0) | % |  |  | 1,961,382 |  |  |  |  |
Actual tax expense |  | $ | 7,371,967 |  |  |  | 23 | % |  | $ | - |  |  |  | - | % |  | $ | 7,371,967 |  |  |  | 21.6 | %

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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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