10. INCOME TAX

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Note 10. INCOME TAX

The provision for income tax expense (benefit) is compromised of the following:

	2014			2013
Current tax, federal	$	345,547		$	(110,302	)
Current tax, state		76,497			(24,418	)
Current tax, foreign		-			-
Current tax, total		422,044			(134,720	)
Deferred income tax, federal		(64,746	)		(64,827	)
Deferred income tax, state		(14,333	)		(14,351	)
Deferred income tax, foreign		(85,532	)		(2,329,217	)
Deferred income tax, total		(164,611	)		(2,408,395	)
Total	$	257,433		$	(2,543,115	)

The following table reconciles the income tax benefit at the U.S. Federal statutory rate to income tax benefit at the Company's effective tax rates.

	2014			2013
Income (loss) before taxes		660,780			(721,481	)
US statutory tax rates		38.62	%		38.62	%
Expected income tax (recovery)		255,193			(278,635	)
Non-deductible items		(162,602	)		(396,793	)
Change in estimates		(38,696	)		(163,928	)
Change in enacted tax rate		-			91,711
Option expired during the year		44,917			20,878
Functional currency adjustments		-			164,890
Foreign tax rate difference		172,818			365,377
Change in valuation allowance		(14,197	)		(2,346,616	)
Total income taxes (recovery)		257,433			(2,543,115	)
Current income tax expenses (recovery)		422,044			(134,720	)
Deferred tax expenses (recovery)		(164,611	)		(2,408,395	)
Total income taxes (recovery)		257,433			(2,543,115	)

Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Deferred tax assets (liabilities) at December 31, 2014 and 2013 are comprised of the following:

Canada	2014			2013
Non capital loss carryforwards		1,407,088			1,596,755
Patents		35,480			33,936
Fixed assets		780,396			698,526
Financial instruments		(6,045	)		-
		2,216,919			2,329,217
Valuation Allowance		-			-
Net Deferred tax asset (liability)		2,216,919			2,329,217
USA
		2014			2013
Fixed Assets		429,631			348,517
Stock-Based Compensation		215,429			213,662
		645,060			580,178
Deferred tax asset not recognized		194,692			208,889
Net Deferred tax asset		450,368			371,289

The Company has non-operating loss carryforwards of approximately $5,628,353 (2013 - $6,387,020) which may be carried forward to apply against future year income tax for Canadian income tax purposes, subject to the final determination by taxation authorities, expiring in the following years:

Expiry	Loss
2026		579,274
2027		723,464
2028		648,253
2029		892,925
2030		932,550
2031		1,073,774
2032		702,139
2033		8,167
2034		67,807
Total		5,628,353

As at December 31, 2014, the Company has no net operating losses carryforward available for U.S. tax purposes.

Accounting for uncertainty for Income Tax

Effective January 1, 2009, the Company adopted the interpretation for accounting for uncertainty in income taxes which was an interpretation of the accounting standard accounting for income taxes. This interpretation created a single model to address accounting for uncertainty in tax positions. This interpretation clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.

As at December 31, 2014 and 2013, the Company’s consolidated balance sheets did not reflect a liability for uncertain tax positions, nor any accrued penalties or interest associated with income tax uncertainties. The Company has no income tax examinations in progress.