8. Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

NOTE–8       INCOME TAXES

For the years ended December 31, 2019 and 2018, the local (“United States of America”) and foreign components of (loss) income before income taxes were comprised of the following:

	Years ended December 31,
	2019			2018
Tax jurisdiction from:
- Local	$	(594,236	)	$	425,356
- Foreign		(79,113	)		21,835
(Loss) income before income taxes	$	(673,349	)	$	447,191

The provision for income taxes consisted of the following:

	Years ended December 31,
	2019			2018
Current:
- Local	$	–		$	–
- Foreign		244			1,839
Deferred:
- Local		–			–
- Foreign		(5,160	)		–
Income tax (credit) expense	$	(4,916	)	$	1,839

The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company operates in various countries: United States of America, BVI, Hong Kong and the People’s Republic of China (“the PRC”) that are subject to taxes 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 December 31, 2019, the operation in the United States of America incurred $2,630,138 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2039, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $552,329 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 a standard income tax rate of 16.5% on the assessable income arising in Hong Kong during its tax year. The reconciliation of income tax rate to the effective income tax rate for the years ended December 31, 2019 and 2018 is as follows:

	Years ended December 31,
	2019			2018
(Loss) income before income taxes	$	(78,067	)	$	22,540
Statutory income tax rate		16.5%			16.5%
Income tax expense at statutory rate		(12,881	)		3,719
Tax effect from non-deductible items		7,146			3,378
Tax effect from deductible items		(2,215	)		(2,560	)
Tax allowance		–			(2,269	)
Tax adjustment		8,194			(429	)
Income tax expense	$	244		$	1,839

The PRC

The Company’s subsidiary operating in the PRC is subject to the Corporate Income Tax Law of the People’s Republic of China at a unified income tax rate of 25%. There is no operation during the year ended December 31, 2019.

The following table sets forth the significant components of the deferred tax assets and liabilities of the Company as of December 31, 2019 and 2018:

	As of December 31,
	2019			2018
Deferred tax liabilities:
Accelerated depreciation	$	7,839		$	12,999
Deferred tax assets:
Net operating loss carryforwards	$	552,329		$	427,539
Less: valuation allowance		(552,329	)		(427,539	)
Deferred tax assets, net	$	–		$	–