Income Taxes

12 Months Ended

Jun. 30, 2017

Income Taxes [Abstract]

INCOME TAXES

Note 13. INCOME TAXES

Income tax expense for the years ended June 30, 2017 and 2016 varied from the amount computed by applying the statutory income tax rate to income before taxes. Reconciliations between the expected federal income tax rates using the federal statutory tax rate of 34% to the Company’s effective tax rate are as follows:

	For the years ended  June 30,
	2017			2016
	%			%
U.S. statutory tax rate		34.0			34.0
U.S. permanent difference		3.9			(11.0	)
Change in valuation allowance		(39.9	)		(105.9	)
Rate differential in foreign jurisdiction		(13.1	)		25.0
Other		-			3.3
		(15.1	)		(54.6	)

The Company’s income tax benefit (expense) for the years ended June 30, 2017 and 2016 are as follows:

	For the years ended  June 30,
	2017			2016
Current
USA	$	-		$	-
Hong Kong		(70,958	)		23,287
China		(206,358	)		(555,280	)
		(277,316	)		(531,993	)
Deferred
USA		749,400			(280,600	)
		749,400			(280,600	)
Total income tax benefit (expense)	$	472,084		$	(812,593	)

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

	For the years ended  June 30,
	2017			2016
Allowance for doubtful accounts	$	106,000		$	112,000
Stock-based compensation		790,000			735,000
Net operating loss		1,464,000			3,752,000
Total deferred tax assets		2,360,000			4,599,000
Valuation allowance		(1,610,600	)		(4,599,000	)
Deferred tax assets, net - long-term	$	749,400		$	-

The Company’s operations in the U.S. have incurred a cumulative net operating loss (“NOL”) of approximately $6,205,000 as of June 30, 2017, which may reduce future taxable income. For the year ended June 30, 2017, approximately $1,853,000 of NOL was utilized and the tax benefit derived from such NOL was approximately $630,000. For the year ended June 30, 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 provided an allowance against the deferred tax assets balance as of June 30, 2017. The net decrease in the valuation allowance for the year ended June 30, 2017 was $2,988,000 and the net increase in the valuation allowance for the same period of 2016 was $2,026,600.

The Company’s taxes payable consists of the following:

	June 30,		June 30,
	2017		2016
VAT tax payable	$	520,436	$	475,066
Corporate income tax payable		1,290,832		1,100,380
Others		74,948		61,751
Total	$	1,886,216	$	1,637,197