INCOME TAXES

6 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 12. INCOME TAXES

The Company’s income tax expense for the three months and six months ended December 31, 2016 and 2015 are as follows:

	For the three months ended				For the six months ended
	December 31,				December 31,
	2016		2015		2016		2015
Current
U.S.	$	-	$	-	$	-	$	-
Hong Kong		(27,576)		-		(34,101)		-
PRC		(45,815)		(32,933)		(110,911)		(292,755)
		(73,391)		(32,933)		(145,012)		(292,755)
Deferred
U.S.		-		(299,600)		-		(280,600)
		-		(299,600)		-		(280,600)
Total income tax expense	$	(73,391)	$	(332,533)	$	(145,012)	$	(573,355)

The Company’s deferred tax assets are comprised of the following:

	December 31,		June 30,
	2016		2016
Allowance for doubtful accounts	$	84,000	$	112,000
Stock-based compensation		779,000		735,000
Net operating loss		3,332,000		3,752,000
Total deferred tax assets		4,195,000		4,599,000
Valuation allowance		(4,195,000)		(4,599,000)
Deferred tax assets, net	$	-	$	-

The Company’s operations in the U.S. have incurred a cumulative net operating loss of approximately $7,437,000 and $8,378,000, respectively, as of December 31, 2016 and June 30, 2016, which may reduce future taxable income. During the three months ended December 31, 2016, the amount of utilization of Federal Net Operating Losses (“NOL”) was $541,000 and the tax benefit derived from such NOL was $284,000; in the corresponding period for the three months ended December 31, 2015, the utilization of NOL was nil and no tax was benefit derived from NOL. During the six months ended December 31, 2016, the amount of utilization of NOL was $941,000 and the tax benefit derived from such NOL was $420,000; in the corresponding period for the six months ended December 31, 2015, the utilization of NOL was nil and no tax benefit was derived from NOL. This carry-forward will expire if not utilized by 2036.

The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of the deferred tax assets, including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes, and other relevant factors. Part of the Company’s traditional business, such as shipping agency services and shipping and chartering services, is temporarily suspended. Management has determined that the profitability of the Company’s U.S. entities is difficult to predict, and accordingly a 100% valuation allowance has been provided against the deferred tax assets balance as of December 31, 2016, based on management’s estimates. The net decrease in the valuation allowance for the three months ended December 31, 2016 was $230,000 and the net increase in the valuation allowance for the same period of 2015 was $981,600. The net decrease in the valuation allowance for the six months ended December 31, 2016 was $404,000 and the net increase in valuation allowance for the same period in 2015 was $1,152,600.

The Company’s taxes payable consist of the following:

	December 31,		June 30,
	2016		2016
VAT tax payable	$	481,204	$	475,066
Corporate income tax payable		1,194,414		1,100,380
Others		65,557		61,751
Total	$	1,741,175	$	1,637,197