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Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 12 - INCOME TAXES

The income (loss) before income taxes of the Company for the years ended December 31, 2017 and 2016 were comprised of the following:

		For the years ended December 31,
		2017				2016
Tax jurisdictions from:
– Local		$	(723,141	)		$	(817,722	)
– Foreign, representing:
Hong Kong			(2,174,011	)			12,846
The PRC			114,443				(42,092	)
Malaysia			(172,593	)			(65,776	)
Other (primarily nontaxable jurisdictions)			(93,235	)			880,537
Loss before income taxes		$	(3,048,537	)		$	(32,207	)

Provision for income taxes consisted of the following:

		For the years ended December 31,
		2017				2016
Current:
– Local		$	-			$	-
– Foreign:
Hong Kong			20,286				7,459
The PRC			48,086				-
Deferred:
– Local			-				-
– Foreign			-				-
		$	68,372			$	7,459

Effective and Statutory Rate Reconciliation

The following table summarizes a reconciliation of the Company’s blended statutory income tax rate to the Company's effective tax rate as a percentage of income from continuing operations before taxes:

		For the years ended December 31,
		2017				2016
Statutory blended tax rate			(24	)%			(24	)%
Goodwill impairment			16	%			-
Increase in valuation allowance			10	%			47	%
– Foreign
Effective tax rate			2	%			23	%

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

The Company (GRNQ) is registered in the State of Nevada and is subject to United States of America tax law. As of December 31, 2017, the operations in the United States of America incurred $1,899,797 of cumulative net operating losses (NOL’s) which can be carried forward to offset future taxable income. The NOL carryforwards begin to expire in 2037, if unutilized. The Company has provided for a full valuation allowance of approximately $398,957 against the deferred tax assets 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.

Hong Kong

The Company’s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the statutory income tax rate of 16.5% on its assessable income for its tax year. For the year ended December 31, 2017, certain subsidiaries in Hong Kong incurred an aggregate operating loss of $2,323,953 (including goodwill and impairment loss of $1,898,721), while other subsidiaries generated aggregate operating income of $149,942. For the year ended December 31, 2016, certain subsidiaries in Hong Kong incurred an aggregate operating loss of $32,514, while other subsidiaries generated aggregate operating income of $45,360. As of December 31, 2017, the cumulative operating losses and cumulative operating income for operations in Hong Kong was $3,154,457 and $140,779 respectively. The cumulative operating losses can be carried forward to offset future taxable income. The Company has provided for a full valuation allowance against the deferred tax assets of $520,486 (including goodwill and intangibles of $313,289) 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 PRC

GMC(SZ), SZ Falcon and GSNSZ 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 year ended December 31, 2017, GMC(SZ), SZ Falcon and GSNSZ recorded aggregate operating income of $77,851. For the year ended December 31, 2016, GMC(SZ) and SZ Falcon recorded an aggregate operating loss of $42,092. As of December 31, 2017, the operations in the PRC had $162,985 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2023, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $40,747 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 years ended December 31, 2017 and 2016, GRSB, GCVSB and GWSB incurred an aggregate operating loss of $174,998 and $65,776, respectively, which can be carried forward indefinitely to offset its taxable income. As of December 31, 2017, the operations in Malaysia incurred $403,224 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 $80,645 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 December 31, 2017 and December 31, 2016:

		As of				As of
		December 31, 2017				December 31, 2016
Deferred tax assets:
Goodwill and intangibles		$	313,389			$	-
Net operating loss carryforwards
– United States of America			398,857				431,009
– Hong Kong			207,197				26,506
– The PRC			40,747				60,209
– Malaysia			80,645				45,645
			1,040,835				563,369
Less: valuation allowance			(1,040,835	)			(563,369	)
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 $1,040,835 as of December 31, 2017. For the year ended December 31, 2017, the valuation allowance increased by $477,466, primarily relating to the impairment of goodwill and intangible assets and loss carryforwards from the various tax regimes.

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- References

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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

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