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Income taxes

12 Months Ended

Dec. 31, 2013

Note 11 – Income taxes

The Company is subject to U.S. federal income tax as well as income tax in states and foreign jurisdictions. For the major taxing jurisdictions, the tax years 2006 through 2013 remain open for state and federal examination. The Company believes assessments, if any, would be immaterial to its consolidated financial statements. With respect to the foreign jurisdiction, the Company is no longer subject to income tax audits for the year 2012 (inclusive).

The income tax provision information is provided as follows:

	2013	2012
Component of income (loss) before income taxes:
United States	$(197,231)	$(315,254)
Foreign	(216,374)	(921,918)
Income (loss) before income taxes	(413,605)	(1,237,172)

Provision for income taxes
U.S. federal	-	-
State and local	(907)	(800)
Foreign	(5,701)	7,008
Income tax benefit	(6,608)	6,208

Deferred – valuation allowance for deferred tax assets	(89,000)	-
	(95,608)	6,208

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before income taxes. The sources and tax effects of the differences, for the years ended December 31, 2013 and 2012 are as follows:

	2013	2012
Federal income taxes at applicable statutory rates	$(144,761)	$(433,010)
Adjustment resulting from the tax effect of:
State income tax	(907)	(800)
Foreign tax rate differential	21,637	92,191
Loss with no tax benefit provided	77,431	289,257
Non-deductible expenses and other	39,992	58,570
	(6,608)	6,208

As of December 31, 2013, there was gross U.S. federal net operating loss carried forwards of approximately $670,000, which may be available to offset future federal income tax liabilities. Because it is more likely than not that the Company will not realize its deferred tax assets, it has recorded a full valuation allowance against these assets. Accordingly, no deferred tax asset has been recorded in the accompanying balance sheet. All of the gross federal net operating losses are limited by certain provisions of the U.S. tax code which restricts their utilization in the future.

The federal net operating losses expire at various dates through 2027 to 2033.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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