The Company is subject to the Federal Income tax rate of 34%, PRC Enterprise Income tax rate of 25% and Hong Kong profits tax rate of 16.5%.
A reconciliation of the provision for income taxes with amounts determined by applying the statutory Federal income tax rate of 34% to income before income taxes is as follows:
December 31, 2016 |
December 31, 2015 |
|||||||
| Profit (Loss) before income tax | $ | (50,915 | ) | $ | (22,000 | ) | ||
| Temporary Difference | - | - | ||||||
| Permanent Difference | - | - | ||||||
| Taxable income | $ | (50,915 | ) | $ | (22,000 | ) | ||
| Federal Income Tax rate | 34 | % | 34 | % | ||||
| Current tax credit | $ | 17,311 | $ | 7,480 | ||||
| Less: Valuation allowance | (17,311 | ) | (7,480 | ) | ||||
| Income tax expenses | $ | - | $ | - | ||||
A reconciliation of the provision for income taxes with amounts determined by applying the Hong Kong profits rate of 16.5% to income before income taxes is as follows:
December 31, 2016 |
December 31, 2015 |
|||||||
| Profit (Loss) before income tax | $ | (55,153 | ) | $ | (16,749 | ) | ||
| Temporary Difference | - | - | ||||||
| Permanent Difference | - | 4 | ||||||
| Taxable income | $ | (55,153 | ) | $ | (16,752 | ) | ||
| Hong Kong Income Tax rate | 16.5 | % | 16.5 | % | ||||
| Current tax credit | $ | 9,100 | $ | 2,764 | ||||
| Less: Valuation allowance | (9,100 | ) | (2,764 | ) | ||||
| Income tax expenses | $ | - | $ | - | ||||
Sleepaid Household and Yuewin were incorporated in the PRC and are subjected to income taxes under the current laws of the PRC. The EIT rate of PRC was 25% for the year ended December 31, 2016 and 2015.
Profit (loss) before income tax of $(58,295) and $120,478 for the year ended December 31, 2016 and 2015, respectively, were attributed to operations in China. The income tax expenses consisted of the following:
December 31, 2016 |
December 31, 2015 |
|||||||
| Profit (Loss) before income tax | $ | (58,295 | ) | $ | 120,478 | |||
| Temporary Difference | 69,312 | 4,829 | ||||||
| Permanent Difference | (6,609 | ) | 4,997 | |||||
| Taxable income | $ | 4,408 | $ | 130,304 | ||||
| China Enterprise Income Tax rate | 25.0 | % | 25.0 | % | ||||
| Current tax expenses | $ | 1,102 | $ | 32,576 | ||||
| Less: Valuation allowance | - | - | ||||||
| $ | 1,102 | $ | 32,576 | |||||
No deferred tax asset has been provided for the year ended December 31, 2015 and 2016.