v3.23.3
Income Taxes
 3 Months Ended
Sep. 30, 2023
Income Taxes [Abstract]  
INCOME TAXES

Note 16. INCOME TAXES

 

The Company’s income tax expenses for three months ended September 30, 2023 and 2022 are as follows:

 

   For the three months Ended
September 30		 
   2023   2022 
Current        
U.S.  $
-
   $(103,426)
PRC   
-
    
-
 
Total income tax expenses   
-
    (103,426)

 

The Company’s deferred tax assets are comprised of the following:

 

   September 30,
2023		   June 30,
2023		 
Allowance for doubtful accounts        
U.S.  $1,251,000   $1,241,000 
PRC   1,650,000    1,655,000 
           
Net operating loss          
U.S.   9,223,000    8,775,000 
PRC   1,451,000    1,425,000 
Total deferred tax assets   13,575,000    13,096,000 
Valuation allowance   (13,575,000)   (13,096,000)
Deferred tax assets, net - long-term  $
-
   $
-
 

 

The Company’s operations in the U.S. incurred cumulative U.S. federal net operation losses (“NOL”) of approximately $41.7 million as of June 30, 2023, which may reduce future federal taxable income. During the three months ended September 30, 2023, approximately $2.1 million of NOL was generated and the tax benefit derived from such NOL was approximately $9.2 million. As of September 30, 2023, the Company’s cumulative NOL amounted to approximately $43.8 million, which may reduce future federal taxable income.

 

The Company’s operations in China incurred a cumulative NOL of approximately $1.7 million as of June 30, 2023 which was mainly from net loss. During the three months ended September 30, 2023, additional NOL of approximately $0.1 million was generated. As of September 30, 2023, the Company’s cumulative NOL amounted to approximately $1.8 million which may reduce future taxable income which will expire by 2026.

 

The Company periodically evaluates the likelihood of the realization of deferred tax assets (“DTA”) 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 Company’s reorganization and venture into new businesses. The Company provided a 100% allowance for its DTA as of September 30, 2023. The net increase in valuation for the three months ended September 30, 2023 amounted to approximately $479,000, 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:

 

   September 30,   June 30, 
   2023   2023 
VAT tax payable  $1,011,758   $1,016,529 
Corporate income tax payable   2,255,047    2,261,131 
Others   56,399    57,298 
Total  $3,323,204   $3,334,958