INCOME TAXES

12 Months Ended

Jun. 30, 2022

INCOME TAXES

INCOME TAXES

7. INCOME TAXES

The Company operates in various countries: United States, British Virgin Island, Hong Kong and the PRC that are subject to taxes in the jurisdictions in which they operate, as follows:

United States of America

AJIA is registered in the State of Nevada and is subject to the tax laws of United States of America. The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were not material to its results of operations for the periods presented. Deferred tax asset is not provided for as the tax losses may not be able to carry forward after a change in substantial ownership of the Company.

For the years ended June 30, 2022 and 2021, there were no operating income.

British Virgin Island

Under the current BVI law, SRL is not subject to tax on income.

Hong Kong

ACHL, ACSL and UPL are subject to Hong Kong tax regime. For the years ended June 30, 2022 and 2021, no provision for Hong Kong Profits Tax is provided for, since the Company’s income neither arises in, nor is derived from Hong Kong under its applicable tax law. The reconciliation of income tax rate to the effective income tax rate based on loss before income taxes from foreign operation for the years ended June 30, 2022 and 2021 are as follows:

	Years ended June 30,
	2022			2021
Loss before income taxes	$	(120,425	)	$	(43,818	)
Statutory income tax rate		16.5	%		16.5	%
Income tax impact at the statutory rate		(19,870	)		(7,230	)
Non-deductible items		26,708			37
Non-taxable item		(85	)		-
Deductible items		(27	)		(1,519	)
Net operating loss		(6,726	)		8,712
Income tax expense	$	-		$	-

The PRC

For the years ended June 30, 2022 and 2021, GSTL generated no operating result and accordingly, no provision for income tax has been recorded.

As of June 30, 2022, GSTL incurred $30,809 of net operating losses carryforward available for income tax purposes that may be used to offset future taxable income and will begin to expire in 5 years from the year of incurrence, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

The following table sets forth the significant components of the aggregate net deferred tax assets of the Company as of June 30, 2022 and 2021:

	As of June 30,
	2022			2021
Deferred tax assets:
Net operating loss carryforward from:
– United States of America	$	222,065		$	160,892
– Hong Kong		62,137			26,632
– The PRC		7,702			7,424
Total deferred tax assets		291,904			194,948
Less: valuation allowance		(291,904	)		(194,948	)
Net deferred tax assets	$	-		$	-

As of June 30, 2022, the Company incurred $1,118,412 the aggregate net operating loss carryforwards available to offset its taxable income for income tax purposes. The Company has provided for a full valuation allowance against the deferred tax assets of $291,904 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future. For the year ended June 30, 2022, the valuation allowance increased by $96,956, primarily relating to net operating loss carryforwards.