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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 14 - INCOME TAXES Provision for (benefit from) income taxes consisted of the following:
|  | For the years ended December 31, |
|  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |
– Local |  | $ | - |  |  | $ | - |
– Foreign: |  |  |  |  |  |  |  |
Hong Kong |  |  | (28,315 | ) |  |  | 51,192 |
The PRC |  |  | 5,887 |  |  |  | (32,788 | )
Malaysia |  |  | - |  |  |  | (2,168 | )
Deferred: |  |  |  |  |  |  |  |
– Local |  |  | - |  |  |  | - |
– Foreign |  |  | - |  |  |  | - |
|  | $ | (22,428 | ) |  | $ | 16,236 |
A summary of United States and foreign income (loss) before income taxes were comprised of the following:
|  | For the years ended December 31, |
|  | 2019 |  |  | 2018 |
Tax jurisdictions from: |  |  |  |  |  |  |  |
– United States |  | $ | (494,345 | ) |  | $ | (5,062,437 | )
– Foreign, representing: |  |  |  |  |  |  |  |
Hong Kong |  |  | (790,559 | ) |  |  | (745,051 | )
The PRC |  |  | (308,369 | ) |  |  | (1,499,144 | )
Malaysia |  |  | (87,139 | ) |  |  | (197,878 | )
Other (primarily nontaxable jurisdictions) |  |  | 308,506 |  |  |  | (804,417 | )
Loss before income taxes |  | $ | (1,371,906 | ) |  | $ | (8,308,927 | )
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, |
|  | 2019 |  |  | 2018 |
Statutory tax rate |  |  | 21.0 | % |  |  | 21.0 | %
Impairment of goodwill, intangibles and investments |  |  | - | % |  |  | (25.0 | )%
Change in income tax valuation allowance |  |  | (22.6 | )% |  |  | 4.2 | %
Effective tax rate |  |  | (1.6 | )% |  |  | 0.2 | %
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: The significant components of deferred taxes of the Company are as follows:
|  | As of |  |  | As of |
|  | December 31, 2019 |  |  | December 31, 2018 |
Deferred tax assets: |  |  |  |  |  |  |  |
Goodwill, intangibles, and investment asset impairments |  | $ | 832,000 |  |  | $ | 832,000 |
Financing costs |  |  | 974,000 |  |  |  | 974,000 |
Operating lease liability |  |  | 107,000 |  |  |  | - |
Accounts receivable allowance |  |  | 10,000 |  |  |  | 17,000 |
Net operating loss carryforwards |  |  |  |  |  |  |  |
– United States of America |  |  | 1,577,000 |  |  |  | 1247,000 |
– Hong Kong |  |  | 390,000 |  |  |  | 247,000 |
– The PRC |  |  | 478,000 |  |  |  | 180,000 |
– Malaysia |  |  | 131,000 |  |  |  | 120,000 |
Gross deferred tax assets |  |  | 4,499,000 |  |  |  | 3,617,000 |
Less: valuation allowance |  |  | (4,292,000 | ) |  |  | (3,561,000 | )
Total deferred tax assets |  |  | 207,000 |  |  |  | 56,000 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Change in fair value of derivative liabilities |  |  | 101,000 |  |  |  | 56,000 |
Operating lease right-of-use asset |  |  | 106,000 |  |  |  | - |
Total deferred tax liabilities |  |  | 207,000 |  |  |  | 56,000 |
Net deferred tax asset (liability) |  | $ | - |  |  | $ | - |
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 $ 2,576,543 as of December 31, 2019. For the year ended December 31, 2019, the valuation allowance increased by $316,504, primarily relating to loss carryforwards from the various tax regimes. United States of America The Company is registered in the State of Nevada and is subject to United States of America tax law. As of December 31, 2019, the operations in the United States of America has incurred $7,511,000 of 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. 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, 2019 and 2018, subsidiaries in Hong Kong incurred net operating losses of $790,000 and $745,000, respectively. As of December 31, 2019, the cumulative operating losses aggregated for those subsidiaries which have operations in Hong Kong were $2,362,000. The cumulative operating losses can be carried forward indefinitely to offset future taxable income. The PRC The Company’s subsidiaries operating in the PRC are 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, 2019 and 2018, the subsidiaries in the PRC recorded an aggregate operating losses of $308,000 and $1,499,000, respectively. As of December 31, 2019, the subsidiaries operating in the PRC had incurred $1,914,000 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. Malaysia The Company’s subsidiaries operating in Malaysia 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, 2019 and 2018, the subsidiaries in Malaysia incurred an aggregate operating loss of $87,000 and $196,000, respectively. As of December 31, 2019, the operations in Malaysia had incurred $655,000 of cumulative net operating losses which can be carried forward indefinitely to offset its taxable income in future. The Company has provided for a full valuation allowance against the deferred tax assets on the expected future tax benefits from all of the Company’s net operating loss carryforwards as the management believes it is more likely than not that these deferred tax assets will not be realized.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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