Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

13. INCOME TAXES

FHAI was incorporated in the State of Nevada. FHAI is an U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as FHAI had no United States taxable income for the reporting periods.

WLJM Cayman was incorporated in Cayman Islands. Under the current tax laws of Cayman Islands, WLJM Cayman is not subject to tax on their income or capital gains. In addition, upon of dividends by WLJM Cayman to its shareholders, no Cayman Islands withholding tax will be imposed.

WLJM HK was incorporated in Hong Kong and is subject to an income tax rate of 16.5% for taxable income generated from operations in Hong Kong.

JYWM WFOE, Shenzhen Wei Lian, Dongguan Dishi, Shenzhen Nainiang and Nainiang Liquor were incorporated in the PRC and they are subject to profits tax rate at 25% for income generated and operation in the country.

The full realization of the tax benefit associated with the losses carried forward depends predominantly upon the Company’s ability to generate taxable income during the carry forward period.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

The Company did not record deferred tax assets as of June 30, 2022 and December 31, 2021.

A reconciliation of tax expense from 25% statutory tax rates for the three and six months ended June 30, 2022 and 2021 is as follows:

	For the three months ended June 30,
	2022			2021
Profit before tax	$	2,086,466		$	6,258,154
Tax expense (benefit) calculated at statutory tax rate		25	%		25	%
Computed expected tax expense		521,617			1,564,539
Utilization of tax loss		-			(39,633	)
Movement in valuation allowance		37,151			(160,754	)
Others		1,222			(1,418	)
	$	559,990		$	1,362,734

	For the six months ended June 30,
	2022			2021
Profit before tax	$	6,142,722		$	9,429,789
Tax benefit calculated at statutory tax rate		25	%		25	%
Computed expected tax expense		1,535,681			2,357,447
Utilization of tax loss		-			(39,633	)
Movement in valuation allowance		37,151			(160,754	)
Others		22,261			(14,954	)
	$	1,595,093		$	2,142,106