Note 8 – Income Taxes
The Company and Savicell are subject to income tax laws in their respective tax jurisdictions, which are the same as their respective place of incorporation.
The following table reconciles the income tax benefit at the U.S. Federal statutory rate to income tax benefit at the Company's effective tax rates.
| For the year ended | For the year ended | |||||
| December 31, 2016 | December 31, 2015 | |||||
| $ | $ | |||||
| Net loss before taxes | (2,232,021 | ) | (2,589,234 | ) | ||
| Statutory tax rate | 34% | 34% | ||||
| Income tax recovery | (758,887 | ) | (880,340 | ) | ||
| Non-deductible item | 77,623 | 131,208 | ||||
| Change in estimates | - | (515,645 | ) | |||
| Change enacted tax rate | - | 20,367 | ||||
| Foreign tax rate difference | 122,231 | 142,616 | ||||
| Discount on convertible debenture | - | 289,824 | ||||
| Change in valuation allowance | 559,033 | 811,970 | ||||
| Income tax expense (recovery) | - | - |
Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Deferred tax assets (liabilities) at December 31, 2016 and 2015 are comprised of the following:
| December 31, 2016 | December 31, 2015 | |||||
| $ | $ | |||||
| Loss carry forwards | 3,811,063 | 3,312,236 | ||||
| Convertible debenture | (148,971 | ) | (209,177 | ) | ||
| Valuation allowance | (3,662,092 | ) | (3,103,059 | ) | ||
| Deferred tax assets | - | - |
As at December 31, 2016, the Company's US net operating loss carry forwards total $7,912,409 (2015 - $7,356,417),subject to the final determination by taxation authorities. These losses expire as follow:
| Year | Total | ||
| 2029 | $ | 3,163 | |
| 2030 | 69,495 | ||
| 2031 | 98,143 | ||
| 2032 | 4,426,198 | ||
| 2033 | 1,019,303 | ||
| 2034 | 1,186,199 | ||
| 2035 | 553,916 | ||
| 2036 | 555,992 | ||
| $ | 7,912,409 |
As at December 31, 2016, the Company's Israeli net operating loss carry forwards total $4,483,377 (2015 – $3,244,221), subject to the final determination by taxation authorities. These losses carry forward indefinitely. The deferred tax assets have not been recognized because at this stage of the Company’s development, it is not determinable that future taxable profit will be available against which the Company can utilize such deferred tax assets.