Note 13. INCOME TAXES

The Company’s income tax benefit (expense) for the three months and nine months ended March 31, 2017 and 2016 are as follows:

	For the three months ended				For the nine months ended
	March 31,				March 31,
	2017		2016		2017		2016

Current
Hong Kong		(36,966)		-		(71,067)		-
PRC		(47,738)		(265,721)		(158,649)		(558,476)
		(84,704)		(265,721)		(229,716)		(558,476)
Deferred
U.S.		387,900		-		387,900		(280,600)
		387,900		-		387,900		(280,600)
Total income tax benefit (expense)	$	303,196	$	(265,721)	$	158,184	$	(839,076)

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

	March 31,		June 30,
	2017		2016

Allowance for doubtful accounts	$	84,000	$	112,000
Stock-based compensation		774,000		735,000
Net operating loss		3,040,000		3,752,000
Total deferred tax assets		3,898,000		4,599,000
Valuation allowance		(3,510,100)		(4,599,000)
Deferred tax assets, net - long-term	$	387,900	$	-

The Company’s operations in the U.S. have incurred a cumulative net operating loss of approximately $6,787,000 and $8,378,000, respectively, as of March 31, 2017 and June 30, 2016, which may reduce future taxable income. During the three months ended March 31, 2017, the amount of utilization of Federal Net Operating Losses (“NOL”) was $650,000 and the tax benefit derived from such NOL was $292,000; in the corresponding period for the three months ended March 31, 2016, the utilization of NOL was nil and no tax was benefit derived from NOL. During the nine months ended March 31, 2017, the amount of utilization of NOL was $1,591,000 and the tax benefit derived from such NOL was $712,000; in the corresponding period for the nine months ended March 31, 2016, 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 a 90% valuation allowance against the deferred tax assets balance as of March 31, 2017 based on the estimates of profitability of the Company’s U.S. entities in the coming year. The net decrease in the valuation allowance for the three months ended March 31, 2017 was $684,900 and the net increase in the valuation allowance for the same period of 2016 was $699,000. The net decrease in the valuation allowance for the nine months ended March 31, 2017 was $1,088,900 and the net increase in valuation allowance for the same period in 2016 was $1,851,600.

The Company’s taxes payable consist of the following:

	March 31,		June 30,
	2017		2016

VAT tax payable	$	491,791	$	475,066
Corporate income tax payable		1,227,783		1,100,380
Others		72,525		61,751
Total	$	1,792,099	$	1,637,197