PROVISION FOR TAXES

6 Months Ended

Jun. 30, 2019

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. 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 June 30, 2019, UMHL has accumulated net operating losses of $3,323,886 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 six months ended
	June 30,			December 31,
	2019			2018
Net loss before income taxes		(18,716	)		(106,816	)
Tax expenses (benefit) at the statutory tax rate		(6,176	)		(35,250	)
Tax effect of:
Valuation allowance		6,176			35,250
Income tax benefit		-			-

The components of deferred tax assets and liabilities as follows:

	June 30,			December 31,
	2019			2018
Deferred tax asset
Net operating losses carry forwards		483,325			477,149
Valuation allowance		(483,325	)		(477,149	)
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 17% (2018 : 18%) for the first MYR500,000 ($123,934) taxable income and 24% (2018 : 24%) thereafter.

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

	For the six months ended
	June 30,			December 31,
	2019			2018
Net profit/(loss) before income taxes		168,980			(346,304	)
Tax expenses (benefit) at the statutory tax rate		30,416			(62,335	)
Tax effects of:
Utilization of deferred tax assets previously not recognized		(30,416	)		-
Expenses not currently deductible		-			62,335
Income tax expense (benefit)		-			-

The components of deferred tax assets and liabilities as follows:

	June 30,		December 31,
	2019		2018
Deferred tax asset
Expenses not currently deductible		10,317		10,280
Valuation allowance		-		-
Deferred tax assets, net		10,317		10,280

The Company has prepaid income tax of $48,441 and $105,214 as of June 30, 2019 and December 31, 2018, respectively.