The local (United States) and foreign components of loss before income taxes were comprised of the following:

Provision for income taxes consisted of the following:

The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. During the years presented, the Company has a number of subsidiaries that operates in different countries and is subject to tax in the jurisdictions in which it subsidiaries operate, as follows:

United States of America

PGCG is registered in the State of Nevada and is subject to United States of America tax law. As of October 31, 2017 and 2016, the operations in the United States of America incurred US$870,029 and US$646,189, respectively of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carry forwards begin to expire in 2031, if unutilized. As of October 31, 2017, the Company has provided for a full valuation allowance of US$304,510 (2016: US$226,166) against the deferred tax assets on the expected future tax benefits from the net operating loss carry forwards as the management believes it is not likely that these assets will not be realized in the future.

The Company has adopted ASC 740-10 “Accounting for Income Taxes” and recorded a liability for an uncertain income tax position, tax penalties and any imputed interest thereon. The amount, recorded as an obligation in accrued liabilities and other payables, is US$135,000 at October 31, 2017 and 2016 in respect of potential tax penalty of the late filing of IRS return and, if recognized, will affect the Company’s effective tax rate.

Hong Kong

Max Trend is subject to Hong Kong Profits Tax, which is charged at the statutory income rate of 16.5% on its assessable income. No provision for income tax is required due to operating loss incurred. As of October 31, 2017, the Company has provided for a full valuation allowance against the deferred tax assets of US$ nil (2016:US$1,065) on the expected future tax benefits from the net operating loss carry forwards as the management believes it is not likely that these assets will be realized in the future.

Malaysia

All of the Company’s subsidiaries operating in Malaysia are subject to the Malaysia Corporate Tax Laws at a progressive income tax rate of 18% (2016: 19%) (for Company with paid up capital not more than RM2.5 million and on the first RM 500,000 income) and 24% (2016: 24%) (on all income for Company with paid up capital more than RM2.5 million and on the remaining balance of income after the first RM500,000 income charged at 20% for Company with paid up capital not more than RM2.5 million) on the assessable income for its tax year. Any unutilized losses can be carried forward indefinitely to be utilized against income from any business source. As of October 31, 2017, the Company has provided for a full valuation allowance against the deferred tax assets of US$ nil (2016: US$227,729) on the expected future tax benefits from the net operating loss carry forwards as the management believes it is not likely that these assets will be realized in the future.

The general statute of limitations for an assessment or additional assessment is five years from the end of the relevant year of assessment. If the Inland Revenue Board is of the view that a transaction is not at a arm’s length price, the statute of limitations is extended by another two years to seven years. However, if there is fraud, willful default or negligence on the part of the taxpayer, an assessment can be made at any time. There is no statute of limitations for the collection of unpaid tax.

A reconciliation of loss before income taxes to the effective tax rate as follows:

In fiscal 2014, for Malaysian Tax purposes, rental income at “Megan Avenue” and “Le Apple” was deemed as a business source and income tax provision was calculated as such. During fiscals 2017 and 2016, the Company revisited the facts and circumstances and determined that rental income should be more appropriately taxed as a non-business source under Section 4(d) of the Income Tax Act.

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of October 31, 2017 and 2016: