INCOME TAXES

12 Months Ended

Dec. 31, 2018

The Company has net operating losses carried forward of $131,149 available to offset taxable income in future years which commence expiring in the year 2035. As of December 31, 2018, the Company had net operating losses carried forward for foreign income tax purposes of $303,450 which expire beginning in the year 2034.

The Company is subject to United States federal and state income taxes at an approximate rate of 21%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:

	2018 $			2017 $

Net loss before income taxes		(58,765	)		(52,551	)
Statutory income tax rate		21	%		35	%

Expected income tax recovery		(12,341	)		(18,392	)
Tax rate difference for foreign jurisdiction		(3,938	)		2,974
Change in enacted tax rate		–			16,294
Change in valuation allowance		16,279			(876	)

Income tax provision		–			–

The significant components of deferred income tax assets and liabilities as at December 31, 2018 and 2017 are as follows:

	2018 $			2017 $

Net operating losses carried forward		109,473			93,194
Valuation allowance		(109,473	)		(93,194	)

Net deferred income tax asset		–			–

	On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Act reduces the corporate tax rate from a maximum of 35% to a flat 21% rate. The rate reduction is effective on January 1, 2018. As a result of the rate reduction, the Company has reduced the deferred tax asset balance as of December 31, 2017 by $16,294. Due to the Company’s full valuation allowance position, there was no net impact on the Company’s income tax provision at December 31, 2017, as the reduction in the deferred tax asset balance was fully offset by a corresponding decrease in the valuation allowance.

	In conjunction with the Tax Act, the SEC staff issued Staff Accounting Bulletin No. 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. The Company has recognized the provisional tax impacts related to the revaluation of deferred tax assets and liabilities at December 31, 2017. There was no net impact on the Company’s consolidated financial statements for the year ended December 31, 2017, as the corresponding adjustment was made to the valuation allowance. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Act.

DNA Testing Centers Corp 10-K