INCOME TAXES

12 Months Ended

Mar. 31, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 8 – INCOME TAXES

The Company and its subsidiaries file separate income tax returns.

The United States of America

The Company is incorporated in the US, and as a result of the new US Tax Cuts and Jobs Act, is subject to a US federal corporate income tax blended rate of 30.79% for the year ended March 31, 2018. The federal corporate income tax rate for future years is scheduled to be 21%.

British Virgin Islands

RGL is incorporated in the British Virgin Islands (“BVI”). Under the current laws of the BVI, RGL is not subject to tax on income or capital gains. In addition, upon payments of dividends by RGL, no BVI withholding tax is imposed. During the years ended March 31, 2018, 2017 and 2016, there was no income or expenses in the BVI.
 

UK

DDL, TCL and DDHL are all incorporated in the United Kingdom (UK) and the applicable UK statutory income tax rate for these companies is 19%.

For the years ended March 31, 2018, 2017 and 2016 loss before income tax expense (benefit) arose in the UK and U.S.

	Year ended March 31,
	2018			2017			2016
		$			$			$
Loss before income taxes arising in UK		(1,353,243	)		(1,251,870	)		(1,300,468	)
Loss before income taxes arising in United States		(467,206	)		(299,396	)		(239,169	)
Total loss before income tax		(1,820,449	)		(1,551,266	)		(1,539,637	)

Reconciliation of our effective tax rate to loss to the statutory U.S federal tax rate is as follows:

	Year ended March 31,
	2018					2017				2016
		$				$				$
Loss before income taxes		(1,820,449	)			(1,551,266	)			(1,539,637	)
Expected tax benefit		(561,000	)	(31	%)	(527,000	)	(34	%)	(523,000	)	(34	%)
Foreign tax differential		36,000		2	%	217,000		14	%	216,000		14	%
Enhanced research and development		(215,000	)	(12	%)	(198,000	)	(13	%)	(177,000	)	(11	%)
Other		35,000		2	%	-		-		-		-
Change in valuation allowance		705,000		39	%	455,000		29	%	484,000		31	%
Actual income tax benefit		-		-		-		-		-		-

The tax effects of the temporary differences that give rise to significant portions of deferred income tax assets are presented below:

	As of March 31,
	2018				2017
		$				$
Net operating tax loss carried forwards			2,229,000				1,818,000
Valuation allowance			(2,229,000	)			(1,818,000	)
Net deferred tax assets			-				-

For each of the years ended March 31, 2018, 2017 and 2016, the Company did not have unrecognized tax benefits, and therefore no interest or penalties related to unrecognized tax benefits were accrued. Management does not expect that the amount of unrecognized tax benefits will change significantly within the next twelve months.

The Company mainly files income tax returns in the United States and the UK. The Company is subject to U.S. federal income tax examination by tax authorities for tax years beginning in 2014.   The UK tax returns for the Company’s UK subsidiaries are open to examination by the UK tax authorities for the tax years beginning in April 1, 2012.

As of March 31, 2018, the Company has net operating losses (NOLs) of approximately $1.4 million in the US and $7.1 million in the UK.  These US and UK NOLs may be carried forward indefinitely.