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Income Taxes

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

NOTE 15 - INCOME TAXES

The (loss) income before income taxes of the Company For the three months ended March 31, 2017 and 2016 were comprised of the following:

		For the three months ended March 31,
		2017				2016
Tax jurisdictions from:
– Local		$	(135,657	)		$	(286,206	)
– Foreign, representing:
BVI			(65,937	)			(102	)
Belize			150,168				67,271
Anguilla			(427	)			1,669
Malaysia			(43,797	)			(2,223	)
Hong Kong			38,370				1,400
The PRC			(41,670	)			(9,404	)
Loss before income taxes		$	(98,950	)		$	(227,595	)

Provision for income taxes consisted of the following:

		For the three months ended March 31,
		2017				2016

Current:
– Local		$	-			$	-
– Foreign, representing:
BVI			-				-
Belize			-				-
Anguilla			-				-
Hong Kong			10,543				5,589
The PRC			-				-
Malaysia			2,303				-

Deferred:
– Local			-				-
– Foreign			-				-
		$	12,846			$	5,589

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. During the periods presented, the Company has a number of subsidiaries that operates in different countries and is subject to tax in the jurisdictions in which its subsidiaries operate, as follows:

United States of America

GRNQ is registered in the State of Nevada and is subject to United States of America tax law. As of March 31, 2017, the operations in the United States of America incurred $1,315,372 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2037, if unutilized. The Company has provided for a full valuation allowance of approximately $460,380 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is not likely that these assets will not be realized in the future.

British Virgin Islands

Under the current BVI law, the Company’s subsidiaries are not subject to tax on income. No provision for income tax is required due to operating loss incurred.

Belize

Under the current Laws of Belize, the Company’s subsidiaries are registered as a Belizean International Business Corporation which is subject to 0% income tax rate.

Anguilla

Under the current laws of the Anguilla, GPVC and GPVC (Qianhai) are registered as an international business company which is governed by the International Business Companies Act of Anguilla and there is no income tax charged in Anguilla. For the three months ended March 31, 2017 and 2016, the GPVC and GPVC (Qianhai) incurred aggregated net operating loss of $427 and $1,669, respectively.

Hong Kong

All of the Company’s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax, which is charged at the statutory income tax rate of 16.5% on its assessable income for its tax year. A reconciliation of income (loss) before income taxes to the effective tax rate as follows:

		For the three months ended March 31,
		2017				2016

Subsidiary with operating income before income tax		$	63,820			$	50,253
Subsidiaries with loss before income tax			(25,450	)			(21,148	)

Net income before income tax			38,370				29,105

Subsidiary with operating income before income tax		$	63,820			$	50,253
Statutory income tax rate			16.5	%			16.5	%

Income tax at Hong Kong statutory income tax rate			10,530				8,291

Income tax paid			13				-
Tax effect of tax loss brought forward			-				-
Tax effect of tax reduction			-				(2,702	)
Income tax expense		$	10,543			$	5,589

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. There was no significant temporary difference as of March 31, 2017, therefore no deferred tax assets or liabilities have been recognized.

The PRC

GMC(SZ) and SZ Falcon are operating in the PRC subject to the Corporate Income Tax governed by the Income Tax Law of the People’s Republic of China with a unified statutory income tax rate of 25%. For the three months ended March 31, 2017 and 2016, the GMC(SZ) and SZ Falcon incurred aggregated operating losses of $41,670 and $9,404, respectively, which can be carried forward up to five years to offset its taxable income. As of March 31, 2017, the operations in the PRC incurred $282,506 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2022, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $70,626 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

Malaysia

GRSB, GCVSB and GWSB are subject to the Malaysia Corporate Tax Laws at a progressive income tax rate starting from 20% on the assessable income for its tax year. For the three months ended March 31, 2017 and 2016, GRSB and GCVSB incurred an aggregated operating loss of $43,797 and $2,223, respectively which can be carried forward indefinitely to offset its taxable income. As of March 31, 2017, the operations in the Malaysia incurred $271,841 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss can be carried forward indefinitely. The Company has provided for a full valuation allowance against the deferred tax assets of $54,369 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of March 31, 2017 and December 31, 2016:

		As of				As of
		March 31, 2017				December 31, 2016
Deferred tax assets:
Net operating loss carryforwards
– United States of America		$	460,380			$	412,900
– The PRC			70,626				60,209
– Malaysia			54,369				45,645
			585,375				518,754
Less: valuation allowance			(585,375	)			(518,754	)
Deferred tax assets		$	-			$	-

Management believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company provided for a full valuation allowance against its deferred tax assets of $585,375 as of March 31, 2017. During the year ended March 31, 2017, the valuation allowance increased by $66,621, primarily relating to net operating loss carryforwards from the various tax regime.