INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

12. INCOME TAXES

For the years ended December 31, 2021 and December 31, 2020, the local (United States) and foreign components of income (loss) before income taxes were comprised of the following:

	For the year ended December 31,
	2021			2020
Tax jurisdictions from:	$			$
- Local		(83,684	)		(49,364	)
- Foreign, representing
Seychelles		-			-
Hong Kong		(1,301	)		(625	)
China		360,973			(633,852	)
Income (loss) before income tax	$	275,988		$	(683,841	)

The provision for income taxes consisted of the following:

	For the year ended December 31,
	2021		2020
Current:	$		$
- Local		21,348		-
- Foreign		-		-
Deferred:
- Local		-		-
- Foreign		-		-
Income tax expense	$	21,348	$	-

Effective and Statutory Rate Reconciliation

The following table summarizes a reconciliation of the Company’s blended statutory income tax rate to the Company’s effective tax rate as a percentage of income from continuing operations before taxes:

	For the year ended December 31,
	2021			2020
Statutory tax rate:		21.0	%		21.0	%
Change in income tax valuation allowance		(21.0	)%		(21.0	)%
Effective tax rate		0.0	%		0.0	%

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. the Company has subsidiaries that operate in various countries: United States, Seychelles, Hong Kong and China that are subject to taxes in the jurisdictions in which they operate, as follows:

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 and the tax rate is 21%. As of December 31, 2021 the operations in the United States of America incurred $83,684 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 of $0 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, Ezagoo Holding Limited is registered as an international business company which governs by the International Business Companies Act of Seychelles and there is no income tax charged in Seychelles.

Hong Kong

Ezagoo (HK) Limited is subject to Hong Kong Profits Tax, which is charged at the statutory income rate of 16.5% on its assessable income.

People’s Republic of China

Changsha Ezagoo Technology Limited, Beijing Ezagoo Zhicheng Internet Technology Limited and its Changsha Branch company are operating in the People’s Republic of China (“PRC”) subject to the Corporate Income Tax governed by the Income Tax Law of the People’s Republic of China with a unified statutory income tax rate of 25%. During the year ended December 31, 2021, the operations in People’s Republic of China generated the net income of $360,973 which can be used to offset the brought forwards accumulated losses in the previous 5 years that started from year 2020 to year 2016.

	As of December 31,
	2021			2020
Deferred tax assets:	$			$
Net operating loss carryforwards
– United States of America		32,526			14,953
– Hong Kong		4,186			3,971
– The PRC		594,144			684,387
		630,856			703,311
Less: valuation allowance		(630,856	)		(703,311	)
Deferred tax assets	$	-		$	-

EZAGOO LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)