INCOME TAXES

6 Months Ended

Feb. 28, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

 14. INCOME TAXES

For the period ended February 28, 2023 and 2022, the local (United States) and foreign components of loss before income tax were comprised of the following:

	Six months ended						Three months ended
	February 28, 2023			February 28, 2022			February 28, 2023			February 28, 2022
Tax jurisdictions from:
- Local	$	(457,623	)	$	(2,375,752	)	$	(349,474	)	$	(1,450,149	)
- Foreign, representing
Seychelles		-			-			-			-
British Virgin Islands		(1,399	)		(1,855	)		(255	)		(298	)
Taiwan		(437,102	)		(1,251,440	)		(134,125	)		(567,529	)
PRC		(337,557	)		(254,628	)		(131,628	)		(135,191	)
Hong Kong		(208,857	)		(621,575	)		(107,983	)		(228,714	)
Loss before income tax		(1,446,003	)		(4,505,250	)		(726,930	)		(2,381,881	)

The components of the benefit for income taxes expenses are:

	Six months ended					Three months ended
	February 28, 2023		February 28, 2022			February 28, 2023		February 28, 2022
Current	$	-	$	-		$	-	$	-
Deferred		-		(8,964	)		-		(4,482	)
Total income tax benefit	$	-	$	(8,964	)	$	-	$	(4,482	)

The benefit for income taxes consisted of the following:

	Six months ended						Three months ended
	February 28, 2023			February 28, 2022			February 28, 2023			February 28, 2022
Loss before income taxes	$	(1,446,003	)		(4,505,250	)		(726,930	)	$	(2,381,881	)
Statutory income tax rate		21	%		21	%		21	%		21	%
Income tax credit computed at statutory income rate		(302,933	)		(946,103	)		(151,928	)		(400,195	)
Reconciling items:
Non-deductible expenses		53,183			311,315			5,280			256,929
Share-based payments		92,867			222,771			56,467			47,373
Tax effect of tax exempt entity		294			390			54			63
Rate differential in different tax jurisdictions		(9,006	)		15,988			(5,678	)		7,410
Valuation allowance on deferred tax assets		165,595			386,675			95,805			183,938
Income tax benefit	$	-		$	(8,964	)	$	-		$	(4,482	)

United States of America

The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of February 28, 2023, the operations in the United States of America incurred $2,399,038 of cumulative net operating losses (NOL’s) which can be carried forward to offset future taxable income. The NOL carryforwards begin to expire in 2037, if unutilized. As of February 28, 2023, the Company has provided for a full valuation allowance of $503,798 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.

Seychelles

Under the current laws of the Seychelles, LFGL is registered as an international business company, as such, LFGL is governed by the International Business Companies Act of Seychelles and not subject to income taxes in Seychelles.

British Virgin Islands

NPI is tax exempted in the British Virgin Islands where it was incorporated.

Taiwan

LOC is subject to corporate income tax (“CIT”) in Taiwan. Since January 1, 2018, the CIT rate in Taiwan is 20%. As of February 28, 2023, LOC had net operating loss carry-forwards in Taiwan of $3,883,706, which will expire in various years through 2027. The Company has provided for a full valuation allowance of $697,724 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.

PRC

BJDC is subject to corporate income tax (“CIT”) at 25% in accordance with the relevant tax laws and regulations of the PRC. As of February 28, 2023, BJDC had net operating loss carry-forwards in the PRC of $2,790,898, which will expire in various years through 2029. The Company has provided for a full valuation allowance of $697,724 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.

Hong Kong

JFB is subject to Hong Kong Profits Tax, which is charged at the statutory income rate of 16.5% on its assessable income. No provision for Hong Kong profits tax has been made in the financial statements as JFB has no assessable profits for the period. As of February 28, 2023, the operations in Hong Kong incurred $nil of cumulative net operating losses (NOL’s) which can be carried forward indefinitely to offset future taxable income. As of February 28, 2023, the Company has provided for a full valuation allowance of approximately $nil 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.

		February 28, 2023				August 31, 2022
Deferred tax assets:
Net operating loss carryforwards
– United States of America		$	(503,798	)		$	(500,564	)
– Taiwan			(776,741	)			(699,772	)
– PRC			(697,724	)			(600,648	)
– Hong Kong			-				-
Less: valuation allowance			1,978,263				1,800,984
	$	-			$	-