Taxes

6 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

TAXES

Note 18 – TAXES

Income tax

Income tax expense includes a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to the Company and its subsidiaries, adjusted for items which are considered discrete to the period.

The effective tax rate based on forecasted annual results for the FYE 2021 is 5.46%. The effective tax rates on income before income taxes for the six months ended September 30, 2020 was (2.1)%. The (2.1)% rate adjustments for the six months ended September 30, 2020 represent expenses that primarily include stock option expenses and legal, accounting and other expenses incurred by the Company that are not deductible for PRC income tax. The effective tax rate is based on forecasted annual results and these amounts may fluctuate significantly through the rest of the year as a result of the unpredictable impact of COVID-19 on its operating activities.

The effective tax rate on income before income taxes for the six months ended September 30, 2019 was (0.4)%. The (0.4)% rate adjustments for the six months ended September 30, 2019 represent expenses that primarily include stock option expenses and legal, accounting and other expenses incurred by the Company that are not deductible for PRC income tax.

A reconciliation of the income tax provision at the federal statutory rate and the effective rate is as follows:

	For the six months Ended September 30
	2020			2019
U.S. Statutory rates		21.0	%		21.0	%
Foreign income not recognized in the U.S.		(21.0	)		(21.0	)
China income taxes		25.0			25.0
Change in valuation allowance		(25.0	)		(25.0	)
Non-deductible expenses-permanent difference		(2.1	)		(0.4	)
Effective tax rate		(2.1	)%		(0.4	)%

The Company has recorded $0 unrecognized benefit as of September 30, 2020. On the information currently available, the Company does not anticipate a significant increase or decrease to its unrecognized benefit within the next 12 months.