The reconciliation of income tax on loss computed at the federal statutory rates to income tax expense is as follows:
| 2017 | 2016 | |||||||
| U.S. Federal statutory rates on net loss before income taxes | E | (1,396 | ) | E | (2,032 | ) | ||
| Effect of foreign statutory rate differences | (36 | ) | 61 | |||||
| Effect of exchange rate changes | 3,516 | (1,018 | ) | |||||
| Expiration of net operating loss carry forwards | 580 | -- | ||||||
| Permanent differences | (12 | ) | 76 | |||||
| Deferred tax impact from tax rate change | 9,422 | -- | ||||||
| Change in valuation allowance | (12,069 | ) | 2,902 | |||||
| Income tax provision (benefit) | E | 5 | E | (11 | ) | |||
Deferred tax asset is composed of the following:
| 2017 | 2016 | |||||||
| Licenses capitalized for United States tax purposes | E | 357 | E | 799 | ||||
| Stock options | 157 | 255 | ||||||
| Foreign tax credit carry over | 214 | 243 | ||||||
| Net operating loss carry forwards | ||||||||
| United States | 14,687 | 25,841 | ||||||
| Switzerland | 299 | 896 | ||||||
| The Netherlands | 434 | 183 | ||||||
| Luxembourg | -- | -- | ||||||
| 16,148 | 28,217 | |||||||
| Less valuation allowance for deferred tax asset | (16,148 | ) | (28,217 | ) | ||||
| Net deferred tax asset | E | -- | E | -- | ||||
On December 22, 2017, “H.R.1”, formerly known as the “Tax Cuts and Jobs Act”, was signed into law. Among other items, H.R.1 reduces the federal corporate tax rate to 21% from the existing maximum rate of 35%, effective January 1, 2018. As a result, the Company revalued its net deferred tax asset at the new lower tax rate resulting in a reduction to the value of the deferred tax asset.
The Company's provision for income taxes was derived from U.S., Swiss, and Netherlands operations. At December 31, 2017, the Company had estimated net operating loss carry forwards which expire as follows:
| United States | Switzerland | The Netherlands | ||||||||||
| 2018 | 654 | 492 | 1,736 | |||||||||
| 2019 | 319 | 453 | ||||||||||
| 2020 | 470 | 17 | ||||||||||
| 2021 | 969 | -- | ||||||||||
| 2022-2037 | 67,525 | 233 | ||||||||||
| Perpetual | -- | -- | ||||||||||
| E | 69,937 | E | 1,195 | 1,736 | ||||||||