Deferred Tax Assets and Deferred Tax Liabilities

12 Months Ended

Dec. 31, 2018

Components of Deferred Tax Assets and Liabilities [Abstract]

DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES

NOTE 10- DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES

Deferred tax assets as of December 31, 2018 and 2017 comprise of the following:

	December 31,		December 31,
	2018		2017
Deferred tax assets
Allowance for doubtful accounts	$	2,205,048	$	2,137,837
Revenue (net of cost)		308,046		160,766
Unpaid accrued expenses		501,276		955,287
Warranty		1,059,468		986,534
Deferred tax assets		4,073,838		4,240,424
Valuation allowance		―		―
Net deferred tax assets	$	4,073,838	$	4,240,424

Deferred taxation is calculated under the liability method in respect of taxation effect arising from all timing differences, which are expected with reasonable probability to realize in the foreseeable future. The Company's subsidiary registered in the PRC is subject to income taxes within the PRC at the applicable tax rate.

In December 2017, the Tax Cuts and Jobs Act (the "2017 Tax Act") was enacted into law. The 2017 Tax Act includes provisions for a new tax on global intangible low-taxed income ("GILTI") effective for tax years beginning after December 31, 2017. The GILTI provision imposes a tax to U.S. companies on the foreign income in excess of a deemed return on tangible assets of controlled foreign corporations, subject to certain deductions and limitations. The Company will report the tax impact of GILTI as a period cost when incurred. Accordingly, the Company is not providing deferred taxes for basis differences expected to reverse as GILTI in the future, as applicable. See Note 16 for more discussion. Prior to the enactment of the 2017 Tax Act, the Company's U.S. subsidiary did not have income tax liability.