Income Tax

12 Months Ended

Dec. 31, 2014

Income Tax [Abstract]

INCOME TAX

8.           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 $1,401,645 as of December 31, 2014 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, 2014 was approximately $476,559. The net change in the valuation allowance for 2014 was an increase of approximately $95,587.

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, 2014. 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, 2014 and, accordingly, no income tax has been provided. WFOE has net operating loss carry forwards for income taxes amounting to approximately $4,362 as of December 31, 2014 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, 2014 has approximately $1,085. The net change in the valuation allowance for 2014 was an increase of approximately $231.

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 2014. Guangdong Xingbang has net operating loss carry forwards for income taxes amounting to approximately $2,711,836 as of December 31, 2014 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, 2014 was approximately $861,454. The net change in the valuation allowance for 2014 was an increase of approximately $402,672.

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 $1,795,787 as of December 31, 2014 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 Xinyu 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, 2014 was approximately $880,190. The net change in the valuation allowance for 2014 was an increase of approximately $465,244.

The tax effects of significant items comprising deferred tax assets as of December 31, 2014 and 2013 are as follows:

	2014			2013
Deferred tax assets:
Depreciation and amortization of property and equipment and website development cost	$	467,107		$	173,093
Deferred revenue		78,610			40,327
Payables and accrued expenses		73,504			206,527
Tax loss		1,604,555			835,607
		2,223,776			1,255,554
Deferred tax liabilities:
Receivables and prepaid expenses		(4,488	)		-
		2,219,288			1,255,554
Valuation allowance		(2,219,288	)		(1,255,554	)
	$	-		$	-

The reconciliation of income taxes computed at the statutory income tax rates to total income taxes for the years ended December 31, 2014 and 2013 is as follows:

-

	2014			2013
Loss before income taxes	$	(3,474,219	)	$	(3,195,259	)
Tax at PRC statutory income tax rate of 25%		(868,555	)		(798,815	)
Effect of different tax rates of subsidiaries operating in other jurisdiction		(24,957	)		(27,285	)
Non-deductible expenses		6,959			49,925
Non-taxable income		(8,114	)		-
Valuation allowance		963,734			759,325
Others		(69,067	)		16,850
Income tax expenses	$	-		$