| 8. | INCOME TAXES |
The Company was incorporated in the United States of America (“USA”). The Company does not generate any taxable income from its operations for the years ended December 31, 2016 and 2015.
The provision for income taxes consists of the following:
| For the years ended December 31, |
|||||||||
| Current: | 2016 | 2015 | |||||||
| (Restated) | |||||||||
| USA | $ | - | $ | - | |||||
| Deferred: | |||||||||
| USA | - | - | |||||||
| Provision for income taxes | - | - | |||||||
The reconciliation of USA statutory income tax rate to the Company’s effective income tax rate is as follows:
| For the years ended December 31, |
|||||||||
| 2016 | 2015 | ||||||||
| (Restated) | |||||||||
| Income tax at USA statutory rate of 34% | $ | - | $ | - | |||||
| Others | - | - | |||||||
| Provision for income taxes | - | - | |||||||
Uncertain Tax Positions
Interest associated with unrecognized tax benefits are classified as income tax, and penalties are classified in selling, general and administrative expenses in the statements of operations. For the years ended December 31, 2016 and 2015, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.
Deferred Income Tax Benefits
Deferred income tax benefits arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating the Company’s ability to recover the deferred tax assets, the management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, the Company begins with historical results adjusted for the results of discontinued operations and incorporate assumptions about the amount of future state, federal, and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates that the Company is using to manage the underlying businesses. As of December 31, 2016, management was uncertain as to whether or not the Company would be able to utilize the potential deferred tax assets arising from net operating losses’ since the Company is not currently generating any revenue; accordingly, the Company has not recognized a deferred tax assets.