| 8. | INCOME TAX |
Provision for income taxes consisted of the following:
| For the year ended | ||||||||
| December 31, 2016 |
December 31, 2015 |
|||||||
| Current: | ||||||||
| Provision for Malaysian income tax | $ | - | $ | - | ||||
| Provision for Singaporean income tax | ||||||||
| Provision for U.S. income tax | - | - | ||||||
| Deferred: | ||||||||
| Provision for Malaysian income tax | - | - | ||||||
| Provision for Singaporean income tax | - | - | ||||||
| Provision for U.S. income tax | - | - | ||||||
| $ | - | $ | - | |||||
Malaysia
The Company’s two main operating subsidiaries, Vitaxel SDN BHD and Vitaxel Online Mall SDN BHD are companies incorporated in Malaysia. They recorded a loss before income tax of $680,391 and $725,912 for the year ended December 31, 2016 and 2015 respectively. A reconciliation of the provision for income taxes with amounts determined by applying the Malaysian income tax rate of 24% and 25% for the years ended December 31, 2016 and 2015, respectively, to income before income taxes is as follows:
| For the year ended | ||||||||
| December 31, 2016 |
December 31, 2015 |
|||||||
| Profit (loss) before income tax | $ | (680,391 | ) | $ | (725,912 | ) | ||
| Permanent difference | 680,391 | 725,912 | ||||||
| Taxable income | $ | - | $ | - | ||||
| Malaysian income tax rate | 24 | % | 25 | % | ||||
| Current tax expenses | $ | - | $ | - | ||||
| Less: Valuation allowance | - | |||||||
| Income tax expenses | $ | - | $ | - | ||||
United States of America
Vitaxel Group Limited is a company incorporated in State of Nevada and recorded a loss before income tax of $225,114 and nil for the year ended December 31, 2016 and 2015 respectively. A reconciliation of the provision for income taxes with amounts determined by applying the United States Federal income tax rate of 34% for the years ended December 31, 2016 and 2015, respectively, to income before income taxes is as follows:
| For the year ended | ||||||||
| December 31, 2016 |
December 31, 2015 |
|||||||
| Profit (loss) before income tax | $ | (225,114 | ) | $ | - | |||
| Permanent difference | 225,114 | - | ||||||
| Taxable income | $ | - | $ | - | ||||
| Malaysian income tax rate | 34 | % | 34 | % | ||||
| Current tax expenses | $ | - | $ | - | ||||
| Less: Valuation allowance | - | |||||||
| Income tax expenses | $ | - | $ | - | ||||
Singapore
Vitaxel Singapore PTE. Ltd. is a company incorporated in Singapore and is subject to a statutory income tax rate of 8.5% on corporate profits up to SGD300,000 and 17% above SGD300,000. No provision for income tax is required due to the company not having any income or losses for the years ended December 31, 2016 and 2015.
No deferred tax has been provided as there are no material temporary differences arising during the year ended December 31, 2016 and 2015.