v3.21.2

Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | Note 17. INCOME TAXES On March 27, 2020, the CARES Act was enacted and signed into law and includes, among other things, refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods and alternative minimum tax credit refunds. The Company does not at present expect the provisions of the CARES Act to have a material impact on its tax provision given the amount of net operating losses currently available. The Company’s income tax expenses for the years ended June 30, 2021 and 2020 are as follows:
|  | For the Years Ended June 30, |
|  | 2021 |  |  | 2020 |
Current |  |  |  |  |  |
U.S. |  | $ | (3,450 | ) |  | $ | - |
PRC |  |  | - |  |  |  | (186,021 | )
Total income tax expense |  | $ | (3,450 | ) |  | $ | (186,021 | )
Income tax expense for the years ended June 30, 2021 and 2020 varied from the amount computed by applying the statutory income tax rate to income before taxes. Reconciliations between the expected federal income tax rates using 21% for the year ended June 30, 2021 and 2020 to the Company’s effective tax rate are as follows:
|  | June 30, 2021 |  |  | June 30, 2020 |
|  | % |  |  | % |
US Statutory tax rate |  | $ | 21.0 |  |  | $ | 21.0 |
Permanent difference* |  |  | 0.1 |  |  |  | 0.4 |
Change in valuation allowance |  |  | (20.3 | ) |  |  | (21.4 | )
Rate differential in foreign jurisdiction |  |  | (0.9 | ) |  |  | (1.0 | )
|  | $ | (0.1 | ) |  | $ | (1.0 | )
| * | Permanent difference includes non-deductible expenses.
The Company’s deferred tax assets are comprised of the following:
|  | June 30, 2021 |  |  | June 30, 2020 |
Allowance for doubtful accounts |  |  |  |  |  |
U.S. |  | $ | 1,706,000 |  |  | $ | 1,329,000 |
PRC |  |  | 2,718,000 |  |  |  | 2,888,000 |
Net operating loss |  |  |  |  |  |  |  |
U.S. |  |  | 3,422,000 |  |  |  | 1,756,000 |
PRC |  |  | 1,507,000 |  |  |  | 1,490,000 |
Total deferred tax assets |  |  | 9,353,000 |  |  |  | 7,463,000 |
Valuation allowance |  |  | (9,353,000 | ) |  |  | (7,463,000 | )
Deferred tax assets, net - long-term |  | $ | - |  |  | $ | - |
The Company’s operations in the U.S. incurred a cumulative U.S. federal net operating loss (“NOL”) of approximately $6,456,000 as of June 30, 2020 which may reduce future federal taxable income. During the year ended June 30, 2021, approximately $6,087,000 of additional NOL was generated and the tax benefit derived from such NOL was approximately $1,278,000, respectively. As of June 30, 2021, the Company’s cumulative NOL amounted to approximately $12,543,000 which may reduce future federal taxable income, of which approximately $1,400,000 will expire in 2037 and the remaining balance carried forward indefinitely. The Company’s operations in China incurred a cumulative NOL of approximately $5,961,000 as of June 30, 2020 which may reduce future taxable income. During the year ended June 30, 2021, approximately $65,000 of additional NOL was generated and the tax benefit derived from such NOL was approximately $16,000, respectively. As of June 30, 2021, the Company’s cumulative NOL amounted to approximately $6,026,000 which may reduce future taxable income, of which approximately $700,000 start expiring from 2023 and the remaining balance of NOL will be expired by 2026. The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect the Company’s future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company determined that it is more likely than not its deferred tax assets could not be realized due to uncertainty on future earnings as a result of the deterioration of trade negotiation between US and China and the outbreak of COVID-19 in 2021. The Company provided a 100% allowance for its DTA as of June 30, 2021. The net increase in valuation for the year ended June 30, 2021 amounted to approximately $1,890,000 based on management’s reassessment of the amount of the Company’s deferred tax assets that are more likely than not to be realized. The Company’s taxes payable consists of the following:
|  | June 30, |  |  | June 30, |
|  | 2021 |  |  | 2020 |
VAT tax payable |  | $ | 1,126,489 |  |  | $ | 1,037,620 |
Corporate income tax payable |  |  | 2,377,589 |  |  |  | 2,180,727 |
Others |  |  | 68,341 |  |  |  | 62,001 |
Total |  | $ | 3,572,419 |  |  | $ | 3,280,348 |

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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