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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | 11. INCOME TAXES The Company and its subsidiaries file tax returns separately. Income taxes Cayman Islands: under the current laws of the Cayman Islands, the Company and its subsidiaries in the Cayman Islands are not subject to taxes on their income and capital gains. Hong Kong: in accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. In March 2018, the Hong Kong Government introduced a two-tiered profit tax rate regime by enacting the Inland Revenue (Amendment) (No.3) Ordinance 2018 (the “Ordinance”). Under the two-tiered profits tax rate regime, the first $2 million of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective from the year of assessment 2018-2019. According to the policy, if no election has been made, the whole of the taxpaying entity’s assessable profits will be chargeable to Profits Tax at the rate of 16.5% or 15%, as applicable. Because the preferential tax treatment is not elected by the Group, all the subsidiaries registered in Hong Kong are subject to income tax at a rate of 16.5%. The subsidiaries registered in Hong Kong did not have assessable profits that were derived Hong Kong during the years ended December 31, 2023, 2022 and 2021. Therefore, no Hong Kong profit tax has been provided for in the periods presented. Our returns for 2017 and subsequent tax years remain subject to examination by Hong Kong Inland Revenue Department. United Kingdom: in accordance with the relevant tax laws and regulations of United Kingdom, a company registered in the United Kingdom is subject to income taxes within United Kingdom at the applicable tax rate on taxable income. All the United Kingdom subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate of 19%. The subsidiary in United Kingdom did not have assessable profits that were derived from United Kingdom during the years ended December 31, 2023, 2022 and 2021. Therefore, no United Kingdom profit tax has been provided for in the periods presented. Our returns for 2019 and subsequent tax years remain subject to examination by the UK tax authority. Singapore: in accordance with the relevant tax laws and regulations of Singapore, a company registered in the Singapore is subject to income taxes within Singapore at the applicable tax rate on taxable income. All the Singapore subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate of 17%. The subsidiary in Singapore did not have assessable profits that were derived from Singapore during the years ended December 31, 2023, 2022 and 2021. Therefore, no Singapore profit tax has been provided for in the periods presented. Our returns for 2019 and subsequent tax years remain subject to examination by the Singapore tax authority. United States (Nevada): in accordance with the relevant tax laws and regulations of the United States, a company registered in the United States is subject to income taxes within the United States at the applicable tax rate on taxable income. All the United States subsidiaries in Nevada that are not entitled to any tax holiday were subject to income tax at a rate of 21%. The subsidiary in the United States did not have assessable profits that were derived from the United States during the years ended December 31, 2023, 2022 and 2021. Therefore, no United States profit tax has been provided for in the periods presented. Our returns for 2020 and subsequent tax years remain subject to examination by Internal Revenue Service. Canada: in accordance with the relevant tax laws and regulations of Canada, a company registered in Canada is subject to income taxes within Canada at the applicable tax rate on taxable income. All the Canada subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate of 15%. The subsidiary in Canada did not have assessable profits that were derived from Canada during the years ended December 31, 2023, 2022 and 2021. Therefore, no Canada profit tax has been provided for in the periods presented. Our returns for 2019 and subsequent tax years remain subject to examination by the Canada tax authority. The components of the provision for income taxes expenses are:
|  |  | Year ended December 31, 2023 |  |  |  | Year ended December 31, 2022 |  |  |  | Year ended December 31, 2021 |
Current |  | $ | - |  |  | $ | - |  |  | $ | - |
Deferred |  |  | - |  |  |  | - |  |  |  | - |
Total income taxes expense |  | $ | - |  |  | $ | - |  |  |  | - |
The reconciliation of income taxes expenses computed at the Hong Kong statutory tax rate applicable to income tax expense is as follows:
|  | Year ended December 31, 203 |  |  | Year ended December 31, 2022 |  |  | Year ended December 31, 2021 |
Net loss before tax |  | $ | (4,340,975 | ) |  | $ | (11,525,102 | ) |  | $ | (27,114,293 | )
Provision for income taxes at Hong Kong statutory income tax rate (16.5%) |  |  | (716,261 | ) |  |  | (1,901,642 | ) |  |  | (4,473,859 | )
Impact of different tax rates in other jurisdictions |  |  | (16,272 | ) |  |  | (263,787 | ) |  |  | (214,135 | )
Non-taxable income |  |  | (1,071,774 | ) |  |  | (907,495 | ) |  |  | (716,628 | )
Non-deductible expenses |  |  | 98,704 |  |  |  | - |  |  |  | 1,992,463 |
Change in valuation allowance |  |  | 1,705,603 |  |  |  | 3,072,924 |  |  |  | 3,412,159 |
Effective income tax expense |  | $ | - |  |  | $ | - |  |  | $ | - |
Deferred tax asset, net Deferred tax assets and deferred tax liabilities reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purpose and the tax bases used for income tax purpose. The following represents the tax effect of each major type of temporary difference.
|  | December 31, 2023 |  |  | December 31, 2022 |
Deferred tax asset: |  |  |  |  |  |
Tax loss carry forward |  | $ | 16,956,748 |  |  | $ | 14,865,121 |
Share-based payment expenses |  |  | 229,126 |  |  |  | 948,893 |
Depreciation and amortization |  |  | 128,866 |  |  |  | - |
Impairment of long-lived assets |  |  | 92,416 |  |  |  | - |
|  |  | 17,407,156 |  |  |  | 15,814,014 |
Deferred tax liability: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | - |  |  |  | (108,926 | )
Net deferred tax assets before valuation allowance |  |  | 17,407,156 |  |  |  | 15,705,088 |
Valuation allowance |  |  | (17,407,156 | ) |  |  | (15,705,088 | )
Deferred tax asset, net |  | $ | - |  |  | $ | - |
As of December 31, 2023 and 2022, the Group had net operating loss carry-forwards of $102,367,435 and $90,060,983, respectively, including its Hong Kong, Singapore, the United States, the United Kingdom and Canada operations, which are available to reduce future taxable income and have an unlimited carryover period. For the year ended December 31, 2023, there was no tax loss carried forward expired, while tax loss brought forward of $28,281 was cancelled due to the disposal of various subsidiaries. Valuation allowance was provided against deferred tax assets in entities where it was determined, it was more likely than not that the benefits of the deferred tax assets will not be realized. The Group had deferred tax assets which consisted of tax loss carry forward, which can be carried forward to offset future taxable income. The Group maintains a full valuation allowance on its net deferred tax assets. The management determines it is more likely than not that all of its deferred tax assets will not be utilized. Changes in valuation allowance are as follows:
|  | Year ended December 31, 2023 |  |  | Year ended December 31, 2022 |  |  | Year ended December 31, 2021 |
Balance as of January 1 |  | $ | 15,705,088 |  |  | $ | 12,632,164 |  |  | $ | 9,561,560 |
Additions |  |  | 1,705,603 |  |  |  | 3,072,924 |  |  |  | 3,412,159 |
Disposal |  |  | (3,535 | ) |  |  | - |  |  |  | (341,555 | )
Balance as of December 31 |  | $ | 17,407,156 |  |  | $ | 15,705,088 |  |  | $ | 12,632,164 |

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