v3.22.4
Income taxes
 3 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
Income taxes
Note 12 – Income taxes
 
The United States and foreign components of loss before income taxes were comprised of the following:
 
 
 
For the three months ended
 
 
 
September 30, 2022
 
 
 
2022
 
 
2021
 
 
 
(Unaudited)
 
 
(Unaudited)
 
Tax jurisdictions from:
 
 
            
- Local – United States
 
$
(824,465
)
 
$
(823,254
)
- Foreign – Malaysia
 
 
(2,836,383
)
 
 
(1,946,287
)
Loss before income tax
 
$
(3,660,848
)
 
$
(2,769,541
)
 
The provision for income taxes consisted of the following:
 
 
 
For the three months ended
 
 
 
September 30, 2022
 
 
 
September 30, 2022
 
 
June 30, 2022
 
 
 
(Unaudited)
 
 
 
 
Tax jurisdictions from:
 
 
            
- Local – United States
 
$
11,500
 
 
$
3,900
 
- Foreign – Malaysia
 
 
-
 
 
 
-
 
Provision for income taxes
 
$
11,500
 
 
$
3,900
 
 
United States of America
 
TGI was incorporated in the State of Delaware and is subject to the tax laws of the United States of America. As of September 30, 2022, the operations in the United States of America incurred $2,368,008 of cumulative net operating losses which can be carried forward indefinitely to offset future taxable income. The deferred tax valuation allowance as of September 30, 2022 and June 30, 2022 were $497,282 and $324,144, respectively.
 
TGI also subject to controlled foreign corporations Subpart F income (“Subpart F”) tax, which is a tax primarily on passive income from controlled foreign corporations with a tax rate of 35%. In addition, the Tax Cuts and Jobs Act imposed a global intangible low-taxed income (“GILTI”) tax, which is a tax on certain off-shore earnings at an effective rate of 10.5% for tax years (50% deduction of the current enacted tax rate of 21%) with a partial offset for 80% foreign tax credits. If the foreign tax rate is 13.125% or higher, there will be no U.S. corporate tax after the 80% foreign tax credits are applied.
For the three months ended September 30, 2022 and 2021, the Company’s foreign subsidiar
y
 did not generate any income that are subject to Subpart F tax and GILTI tax.
 
Malaysia
 
GEM is governed by the income tax laws of Malaysia and the income tax provision in respect of operations in Malaysia is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Income Tax Act of Malaysia, enterprises that incorporated in Malaysia are usually subject to a unified 24% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. As of September 30, 2022, the operations in the Malaysia incurred $7,279,241 of cumulative net operating losses which can be carried forward for a maximum period of seven consecutive years to offset future taxable income. The deferred tax valuation allowance as of September 30, 2022 and June 30, 2022 were $3,712,278 and $3,031,546, respectively.
 
The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of:
 
 
 
As of
September 30,
2022
 
 
As of
June 30,
2022
 
 
 
 
(Unaudited)
 
 
 
 
 
Deferred tax assets:
 
 
            
Net operating loss carry forwards in U.S.
 
$
497,282
 
 
$
324,144
 
Net operating loss carry forwards in Malaysia
 
 
3,712,278
 
 
 
3,031,546
 
Stock based compensation
 
 
-
 
 
 
179,796
 
Amortization of debt discount
 
 
-
 
 
 
148,081
 
Less: valuation allowance
 
 
(4,209,560
)
 
 
(3,683,567
)
Deferred tax assets
 
$
-
 
 
$
-
 
 
Uncertain tax positions
 
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of September 30, 2022 and June 30, 2022, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur interest and penalties tax for the three months ended September 30, 2022 and 2021.