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Deferred Tax

6 Months Ended

Jun. 30, 2021

NOTE 6 – DEFERRED TAX

We compute our quarterly income tax expense/(benefit) by using a forecasted annual effective tax rate and adjust for any discrete items arising during the interim period. 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 and carryforward losses.

The tax effects of temporary differences and tax loss and other credit carry forwards that give rise to significant portions of deferred tax assets and liabilities at June 30, 2021, and December 31, 2020 are comprised of the following:

Significant components of our deferred tax assets and deferred tax liabilities are as follows:

	June 30,			December 31,
	2021			2020
Deferred income tax liabilities:
Depreciation	$	(2,613,910	)	$	(1,116,350	)
Transaction gains and losses		(91,639	)		(129,483	)
Other deferred tax liability		-			(775	)
Net deferred tax liability		(2,705,549	)		(1,246,608	)
Deferred income tax assets:
Net operating loss carryforwards		4,984,048			2,782,861
Transaction gains and losses		38,171			93,874
Transaction costs		-			3,688
Total deferred tax assets		5,022,219			2,880,423
Valuation allowance		(2,316,670	)		(1,633,815	)
Net deferred tax assets	$	-		$	-

For the six month period ended June 30, 2021 the Company recognized $nil income tax expense (June, 30 2020: $nil).

As of June 30, 2021, we had federal and foreign net operating loss carryforwards of approximately $4.98 million and $5.36 million respectively, of which the ability to be carried forward indefinitely is subject to continued and ongoing review.

Utilization of net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code and similar state provisions. Annual limitations may result in expiration of net operating loss and tax credit carryforwards before some or all of such amounts have been utilized.

The Company and its subsidiaries are subject to United States federal income tax, foreign income and withholding tax and income taxes from state jurisdictions. All tax years are open and subject to inspection by taxing authorities.