Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

(6) Income Taxes

United States

The Company is incorporated in United States, and is subject to corporate income tax rate of 21%.

The People's Republic of China (PRC)

Under the Provisional Regulations of The People's Republic of China Concerning Income Tax on Enterprises promulgated by the PRC, which took effect on January 1, 2008, domestic and foreign companies pay a unified corporate income tax of 25%, except for a 15% corporate income tax rate for qualified high technology and science enterprises.

The new EIT Law also imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company's jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. Such withholding income tax was exempted under the previous income tax regulations.

Loss before income taxes consists of:

	For the years ended  December 31,
	2018			2017
Non-PRC	$	(235,426	)	$	(198,722	)
PRC		(110,674	)		(55,570	)
	$	(346,100	)	$	(254,292	)

The income tax expense in the consolidated statements of operations consisted of:

	For the years ended  December 31,
	2018		2017
Unites States Enterprise Income Tax	$	-	$	-
PRC Enterprise Income Tax		-		-
Income taxes, net	$	-	$	-

The components of deferred taxes are as follows at December 31, 2018 and 2017:

	December 31, 2018			December 31, 2017
Deferred tax assets, current portion
Amortization of fair value of stock for services	$	-		$	-
Total deferred tax assets, current portion		-			-
Valuation allowance		-			-
Deferred tax assets, current portion, net	$	-		$	-
Deferred tax assets, non-current portion
Fixed assets	$	-		$	-
Net operating losses		10,735,672			9,489,385
Total deferred tax assets, non-current portion		10,735,672			9,489,385
Valuation allowance		(10,735,672	)		(9,489,385	)
Deferred tax assets, non-current portion, net	$	-		$	-

As of December 31, 2018, Royal Shanghai had a net operating loss of $828,303 that can be carried forward to offset future net profit for income tax purposes under the PR China tax law. The net operating loss carry forwards as of December 31, 2018 will expire in years 2018 to 2022 if not utilized.

China Carbon is subject to United States of America tax law. As of December 31, 2018, the operations in the United States of America incurred approximately $12.9M of cumulative net operating losses that can be carried forward to offset future taxable income. The net operating loss carry forwards as of December 31, 2018 will expire in the year of 2034 to 2036 if not utilized. The Company has provided full valuation allowance for the deferred tax assets on the expected future tax benefits from the net operating loss carry forwards as the management believes it is more likely than not that these assets will not be realized in the future.

A reconciliation between the income tax computed at the U.S. statutory rate and the Company's provision for income tax in the PRC is as follows:

	December 31, 2018			December 31, 2017
Tax expense at statutory rate - US		21	%		34	%
Foreign income not recognized in the U.S.		(21	)%		(34	)%
PRC enterprise income tax rate		25	%		25	%
Loss not subject to income tax		(25	)%		(25	)%
Effective income tax rates		-	%		-	%