9. INCOME TAXES
The following table summarizes a reconciliation of income tax expense compared with the amounts at the U.S. federal statutory income tax rate for the years ended December 31, 2016 and 2015:
| 2016 | 2015 | |
| Income tax expense at U.S. federal statutory rates | $ 7,736 | $ – |
| Deferred tax benefit of net operating loss carryforward | – | 4,800 |
| Non-capital losses applied against taxable income | (5,512) | – |
| Change in valuation allowance | – | (4,800) |
| Income tax expense | $ 2,224 | – |
Deferred income tax assets and liabilities at December 31, 2016 and 2015 reflect the effect of temporary differences between amounts of assets, liabilities and equity for financial reporting purposes and the bases of such assets, liabilities and equity as measured by tax laws, as well as tax loss and tax credit carryforwards. The following table summarizes the components of temporary differences and carryforwards that give rise to deferred tax assets and liabilities at December 31:
| 2016 | 2015 | |
| Deferred tax assets | ||
| Net operating loss carryforward | $ – | $ 5,500 |
| Less: valuation allowances | – | (5,500) |
| Total deferred tax assets, net | $ – | $ – |
The Company’s effective tax rate was 4.5% and 0% for the year ended December 31, 2016 and 2015, respectively, which was lower than the U.S. federal statutory tax rate of 34%. The lower tax rate was primarily attributable to the net operating loss carry forwards from prior fiscal years being utilized.