Income Tax

12 Months Ended

Dec. 31, 2013

Income Tax [Abstract]

INCOME TAX

10.      INCOME TAX

Xingbang NV was incorporated in the United States on April 12, 2011 and has net operating loss carry forwards for income taxes amounting to approximately $1,120,507 as of December 31, 2013 which may be available to reduce future years’ taxable income. These net operating loss carry forwards will expire, if not utilized, commencing in 2030. Management believes that the realization of the benefits from these losses appears uncertain due to the Xingbang’s NV limited operating history and continuing losses. Accordingly, a full deferred tax asset valuation allowance has been provided and no net deferred tax asset benefit has been recorded. The respective valuation allowance at December 31, 2013 was approximately $380,972. The net change in the valuation allowance for 2013 was an increase of approximately $103,403.

Xingbang BVI was incorporated in the BVI on March 24, 2011 and under current laws of the BVI and is not subject to tax on income.

Xingbang HK was incorporated in Hong Kong and is subject to the income tax regulation of Hong Kong. No provision for income tax has been made. Xingbang HK has incurred operating loss for the year ended December 31, 2013. The tax loss cannot be carried forward to reduce future years’ taxable income as there was no revenue earned during the year.

WFOE was incorporated in the PRC and is subject to PRC income tax which is computed according to the relevant laws and regulations in the PRC. The applicable income tax rate is 25%. WFOE did not have any revenue during the year ended December 31, 2013 and, accordingly, no income tax has been provided. WFOE has net operating loss carry forwards for income taxes amounting to approximately $3,439 as of December 31, 2013 which may be available to reduce future year’s taxable income. These net operating loss carry forwards will expire, if not utilized, commencing in 2016. Management believes that the realization of the benefits from these losses appears uncertain due to WFOE’s limited operating history and continuing losses. Accordingly, a full deferred tax asset valuation allowance has been provided and no net deferred tax asset benefit has been recorded. Together with other temporary differences, the net valuation allowance at December 31, 2013 has approximately $854. The net change in the valuation allowance for 2013 was an increase of approximately $854.

Guangdong Xingbang was incorporated in the PRC and is subject to PRC income tax which is computed according to the relevant laws and regulations in the PRC. The applicable income tax rate is 25%. Starting in 2009, the Company was qualified as a "new or high-technology enterprise" in which its income tax rate is reduced to 15% until year 2012. No provision for income tax has been made as Guangdong Xingbang did not have assessable net income for the year. The qualification has expired and the tax rate is 25% in 2013. Guangdong Xingbang has net operating loss carry forwards for income taxes amounting to approximately $1,106,749 as of December 31, 2013 which may be available to reduce future years’ taxable income. These net operating loss carry forwards will expire, if not utilized, commencing in 2016. Management believes that the realization of the benefits from these losses appears uncertain due to the Guangdong Xingbang’s limited operating history and continuing losses. Accordingly, a full deferred tax asset valuation allowance has been provided and no net deferred tax asset benefit has been recorded. Together with other temporary differences, the net valuation allowance at December 31, 2013 was approximately $458,782. The net change in the valuation allowance for 2013 was an increase of approximately $328,748.

Xinyu Xingbang was incorporated in the PRC and is subject to PRC income tax which is computed according to the relevant laws and regulations in the PRC. The applicable income tax rate is 25%.  No provision for income tax has been made as Xinyu Xingbang did not have assessable net income for the year. Xinyu Xingbang has net operating loss carry forwards for income taxes amounting to approximately $708,352 as of December 31, 2013 which may be available to reduce future years’ taxable income. These net operating loss carry forwards will expire, if not utilized, commencing in 2018. Management believes that the realization of the benefits from these losses appears uncertain due to XinyuXingbang’s limited operating history and continuing losses. Accordingly, a full deferred tax asset valuation allowance has been provided and no net deferred tax asset benefit has been recorded. Together with other temporary differences, the net valuation allowance at December 31, 2013 was approximately $414,946. The net change in the valuation allowance for 2013 was an increase of approximately $326,320.

The income tax expense for 2013 and 2012 is summarized as follows:

	2013		2012
Current	$	-	$	19
Deferred		-		69,538
	$	-	$	69,557

The tax effects of significant items comprising deferred tax assets as of December 31, 2013 and 2012 are as follows:

	2013			2012
Deferred tax assets:
Depreciation and amortization of property and equipment and website development cost	$	173,093		$	20,818
Prepaid expenses		-			8,126
Deferred revenue		40,327			26,377
Payables and accrued expenses		206,527			41,968
Tax loss		835,607			398,940
		1,255,554			496,229
Valuation allowance		(1,255,554	)		(496,229	)
	$	-		$	-

The reconciliation of income taxes computed at the statutory income tax rates to total income taxes for the years ended December 31, 2013 and 2012 is as follows:

	2013			2012
Loss before income taxes	$	(3,195,259	)	$	(1,758,989	)
Tax at PRC statutory income tax rate of 25%		(798,815	)		(439,747	)
Effect of different tax rates of  subsidiaries operating in other jurisdiction		(27,285	)		120,934
Non-deductible expenses		49,925			50,263
Utilisation of tax losses		-			(19,095	)
Under-provision in prior year		-			-
Valuation allowance		759,325			177,563
Others		16,850			179,639
Income tax expenses	$	-		$	69,557