Income taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

13. Income taxes

The components of income before income taxes for the years ended December 31, 2018 and 2017 are as follows:

	Year Ended December 31,
	2018			2017
Foreign (not subject to income taxes)	$	15,100,642		$	10,041,971
Mexico		(3,115,656	)		(3,188,134	)
United States		(153,003	)		(2,010,241	)
		11,831,983			4,843,596
Less discontinued operations		(1,115,825	)		(1,041,234	)
	$	10,716,158		$	3,802,362

On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. The Tax Act made significant changes to U.S. corporate income tax by, among other things, reducing the corporate federal income tax rate from 35% to 21%, eliminating or reducing certain deductions, and providing for immediate expensing of certain qualified property. U.S. GAAP requires the effects of changes in tax rates and laws upon deferred tax balances to be recognized in the period in which the legislation is enacted. Accordingly, the Company re-measured its deferred tax assets and liabilities based upon the newly enacted U.S. statutory federal income tax rate of 21%, which is the tax rate at which these assets and liabilities are expected to reverse in the future. The re-measurement resulted in a $545,000 income tax benefit for the year ended December 31, 2017 related to items included in continuing operations.

The Company's provision for income taxes for the years ended December 31, 2018 and 2017 consisted of a deferred tax benefit relating to U.S. operations made up of the following:

	Year Ended December 31,
	2018			2017
Current tax expense	$	207,728		$	1,371
Deferred tax benefit		(365,019	)		(890,348	)
	$	(157,291	)	$	(888,977	)

A reconciliation of the U.S. statutory federal tax rate to the effective benefit rate for the U.S. loss before income taxes for the years ended December 31, 2018 and 2017 is as follows:

	Year Ended December 31,
	2018			2017
U.S. statutory federal rate		21.00	%		34.00	%
State taxes, net of federal effect		4.22	%		2.00	%
Foreign tax rate differential		(38.26	)%		(82.91	)%
R&D tax credit		(2.27	)%		(2.49	)%
Permanent items		1.26	%		13.39	%
Tax Act adjustment		0.00	%		(11.25	)%
Valuation allowance for deferred tax assets		12.72	%		28.90	%
		(1.33	)%		(18.36	)%

The tax effects of significant items comprising the Company's net long-term deferred tax liability as of December 31, 2018 and 2017 were as follows:

	December 31,
	2018			2017
Deferred tax assets:
Operating loss carryforwards - Mexico	$	3,020,049		$	4,923,026
Land basis difference - Mexico		999,719			702,547
Start-up costs - Mexico		3,856,942			747,215
Valuation allowances		(7,876,710	)		(6,372,788	)
		-			-
Deferred tax liabilities:
Property and equipment - U.S.		180,431			205,827
Intangible assets - U.S.		479,443			819,066
		659,874			1,024,893
Net deferred tax liability	$	659,874		$	1,024,893

During the year ended December 31, 2018, the Company increased its total valuation allowance from $6.4 million to $7.9 million. As of December 31, 2018, the Company had a net loss carryforward valued at $10.1 million that will begin to expire in 2020 if unused.