INCOME TAXES

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 13: INCOME TAXES

The provision for income taxes consisted of the following:

	Years ended December 31,
	2023		2022
Current tax	$	-	$	828
Deferred tax		-		-
Income tax expense	$	-	$	828

The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company operates in various countries: United States of America, Hong Kong and the PRC that are subject to taxes in the jurisdictions in which they operate, as follows:

United States of America

CFOO is registered in the State of Delaware and is subject to US federal corporate income tax. The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. 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 not material to its results of operations for the years presented.

For the years ended December 31, 2023 and 2022, the Company did not have any interest and penalties associated with tax positions. As of December 31, 2023 and 2022, the Company has not accrued any penalties on uncertain tax positions.

As of December 31, 2023, the operation in the United States incurred $154,361 of cumulative net operating losses which can be carried forward indefinitely to offset future taxable income.

BVI

ECGL is incorporated in the British Virgin Islands and is not subject to taxation. In addition, upon payments of dividends by these entities to their shareholder, no British Virgin Islands withholding tax will be imposed.

Hong Kong

AWL operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the years ended December 31, 2023 and 2022 is as follows:

	Years ended December 31,
	2023			2022
Loss before income taxes	$	(209,318	)	$	(7,211	)
Statutory income tax rate		8.25	%		8.25	%
Income tax expense at statutory rate		(17,269	)		(595	)
Tax adjustments		309			1,423
Net operating loss		16,960			-
Income tax expense	$	-		$	828

The PRC

GXXH operating in the PRC is subject to the Corporate Income Tax Law of the People’s Republic of China at a unified income tax rate of 25%. The reconciliation of income tax rate to the effective income tax rate for the years ended December 31, 2023 and 2022 is as follows:

	Years ended December 31,
	2023			2022
Loss before income taxes	$	(173,167	)	$	(250,911	)
Statutory income tax rate		25	%		25	%
Income tax expense at statutory rate		(43,292	)		(62,728	)
Net operating loss		43,292			62,728
Income tax expense	$	-		$	-

The following table sets forth the significant components of the deferred tax assets of the Company as of December 31, 2023 and 2022:

	As of December 31,
	2023			2022
Deferred tax assets:
Net operating loss carryforwards
- United States	$	154,361		$	149,874
- Hong Kong		16,960			-
- PRC		352,923			309,631
		524,244			459,505
Less: valuation allowance		(524,244	)		(459,505	)
Deferred tax assets, net	$	-		$	-

The Company recognizes interest and penalties, if applicable, related to uncertain tax positions in the income tax provision. There were no reserves for unrecognized tax benefits and no accrued interest related to uncertain tax positions as of December 31, 2023 and 2022.

The Company files income tax returns in U.S. federal, U.S. state and foreign jurisdictions. With some exceptions, most tax years remain open to examination by the taxing authorities due to the Company’s NOL carryforwards.