The Company generated an operating loss for the three and three months ended March 31, 2020 and 2019 and did not record income tax expense. The Company has operations in various countries and is subject to tax in the jurisdictions in which they operate, as follows:

United States of America

COSG is registered in the State of Nevada and is subject to the tax laws of United States of America

As of March 31, 2020, the operation in the United States of America incurred $2,650,069 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2040, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $556,514 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.

BVI

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

Hong Kong

The Company’s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the two-tiered income tax rate from 8.25% to 16.5% on the assessable income arising in Hong Kong during its tax year.

The following is a reconciliation of the statutory tax rate to the effective tax rate:

	For the Three Months
	Ended March 31,
	2020			2019

U.S. statutory tax (benefit)		(21.0	)%		(21.0	)%
Hong Kong statutory tax (benefit)		8.25	%		(8.25	)%
Permanent and temporary differences		(8.25	)%		2.09	%
Change in deferred tax asset valuation allowance		21.0	%		27.16	%
Effective income tax rate		0	%		0	%