PROVISION FOR TAXES

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Note 9. PROVISION FOR TAXES

United States

Umatrin Holding Ltd (“UMHL”) is established in the State of Delaware in United States and is subject to Delaware State and US Federal tax laws. The income tax rate is 34% for years prior to 2018 and 21% for years thereafter. UMHL has not recognized an income tax benefit for its operating losses based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses and other temporary differences, the realization of which could not be considered more likely than not. Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes that could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant NOLs for which realization of tax benefits is uncertain. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

As of September 30, 2018, UMHL has accumulated net operating losses of $3,183,470 which carryovers as a deferred tax asset that begins to expire in 2025.

The net losses before income taxes and its provision for income taxes as follows:

	For the nine months ended
	September 30,			September 30,
	2018			2017
Net loss before income taxes		(57,658	)		(80,952	)
Tax expenses (benefit) at the statutory tax rate		-			-
Tax effect of:
Valuation allowance		57,658			80,952
Income tax benefit		-			-

The components of deferred tax assets and liabilities as follows:

	September 30,			December 31,
	2018			2017
Deferred tax asset
Net operating losses carry forwards		499,557			441,899
Valuation allowance		(499,557	)		(441,899	)
Deferred tax assets, net		-			-

Malaysia

The Company’s subsidiary, U Matrin Worldwide SDN BHD, is established in Malaysia and its income is subject to Malaysia tax laws. The income tax rate is 18% (2017 : 18%) for the first MYR500,000 ($127,029) taxable income and 24% (2017 : 24%) thereafter.

The net income (losses) before income taxes and its provision for income taxes as follows:

	For the nine months ended
	September 30,			September 30,
	2018			2017
Net loss before income taxes		(109,332	)		(250,964	)
Tax expenses (benefit) at the statutory tax rate		(19,680	)		(45,173	)
Tax effects of:
Expenses not currently deductible		-			-
Under accrual taxes in prior		-			-
Valuation allowance		19,680			45,173
Income tax expense (benefit)		-			-

The components of deferred tax assets and liabilities as follows:

	September 30,		December 31,
	2018		2017
Deferred tax asset
Expenses not currently deductible		10,368		10,575
Valuation allowance		-		-
Deferred tax assets, net		10,368		10,575

The Company has prepaid income tax of $106,122 and $78,656 as of September 30, 2018 and December 31, 2017, respectively.