Income Taxes

6 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

Note 14. INCOME TAXES

The Company's income tax benefit (expenses) for the three and six months ended December 31, 2019 and 2018 are as follows:

	For the three months Ended December 31						For the six months Ended December 31
	2019			2018			2019			2018
Current
U.S.	$	-		$	282		$	-		$	(30,315	)
Hong Kong		-			(881	)		-			(881	)
PRC		(14,747	)		(170,380	)		(14,747	)		(267,817	)
		(14,747	)		(170,979	)		(14,747	)		(299,013	)
Deferred
U.S.		-			(74,000	)		-			120,500
Total income tax benefit (expense)	$	(14,747	)	$	(244,979	)	$	(14,747	)	$	(178,513	)

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

	December 31, 2019			June 30, 2019
Allowance for doubtful accounts	$	1,177,000		$	1,121,000
Net operating loss		1,424,000			1,024,000
Total deferred tax assets		2,601,000			2,145,000
Valuation allowance		(2,601,000	)		(2,145,000	)
Deferred tax assets, net - long-term	$	-		$	-

The Company's operations in the U.S. incurred a cumulative NOL of approximately $3,781,000 as of June 30, 2019 which may reduce future federal taxable income. The NOL will expire in 2037 for the net operating losses generated prior to the year ended June 30, 2019. During the three and six months ended December 31, 2019, approximately $480,000 and $1,465,000 of additional NOL was generated and the tax benefit derived from such NOL was approximately $101,000 and $308,000, respectively. As of December 31, 2019, the Company's cumulative NOL amounted to approximately $5,246,000 which may reduce future federal taxable income, of which approximately $3,781,000 will expire in 2037 and the remaining balance carried forward indefinitely.

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. Management considers new evidence, both positive and negative, that could affect the Company's future realization of 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. The Company determined that it is more likely than not its deferred tax assets could not be realized due to uncertainty on future earnings as a result of the deterioration of trade negotiation between the U.S. and China in 2019. The Company provided a 100% allowance for its DTA as of December 31, 2019. The net increase in valuation for the three and six months ended December 31, 2019 amounted to approximately $181,000 and $455,000, respectively based on management's reassessment of the amount of the Company's deferred tax assets that are more likely than not to be realized.

The Company's taxes payable consists of the following:

	December 31,		June 30,
	2019		2019
VAT tax payable	$	1,055,448	$	1,045,513
Corporate income tax payable		2,038,129		2,075,248
Others		64,134		64,134
Total	$	3,157,711	$	3,184,895