NOTE 11 - INCOME TAXES

12 Months Ended

Dec. 31, 2016

NOTE 11

INCOME TAXES

No provision was made for income tax for the year ended December 31, 2016, since the Company and its subsidiaries had significant net operating loss for taxation purposes.

For the years ended December 31, 2016 and 2015, the Company and its subsidiaries incurred net operating results for tax purposes of approximately loss of $402,041 and a loss of $42,976, respectively. Total net operating losses carry forward as at December 31, 2016 and 2015, (i) for Federal and State purpose were $12,114,959 and $11,712,918, respectively and (ii) for its entities outside of the United States had $51,035 and $28,105 respectively. The net operating loss carry-forwards may be used to reduce taxable income through the year 2035. The availability of the Company's net operating loss carry-forwards are subject to limitation if there is a 50% or more change in the ownership of the Company's stock.

There was no significant difference between reportable income tax and statutory income tax. The gross deferred tax asset balance as at December 31, 2016 and 2015 was approximately $5,170,610 and $5,012,008, respectively. A full valuation allowance has been established against the deferred tax assets, as the utilization of the loss carry-forwards cannot reasonably be assured.

The Company is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. The Company has not concluded all U.S. federal income tax matters for the years through fiscal 2016, with remaining fiscal years subject to income tax examination by federal tax authorities.

The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were material to its results of operations for the years ended December 31, 2016 and 2015. The Company has adopted ASC 740-10 “Accounting for Income Taxes” and recorded a liability for an uncertain income tax position, tax penalties and any imputed interest thereon. The amount, recorded as an obligation, is $410,000 at December 31, 2016 (2015: $410,000).

A reconciliation between the income tax computed at the Malaysia statutory rate and the Company’s provision for income tax is as follows:

	2016	2015

Malaysia statutory rate	25%	25%
Tax allowance	-	-
Valuation allowance – Loss carryforward under Malaysia rate	(25%)	(25%)

Provision for income tax	-	-

As of December 31, 2016 and 2015, there were no material deferred tax assets or liabilities to be recognized.

Median Group Inc 10-K