Income taxes

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Income taxes

11. Income taxes:

The Company is domiciled in the tax-free jurisdiction of Anguilla, British West Indies. The computed benefit / expense differed from the amounts computed by applying the United States of America federal income tax rate of 34 percent and various other rates for other jurisdictions to the pretax income / losses from operations as a result of the following:

	2011			2010
Computed "expected" tax benefit	$	233,010		$	283,452
Reduction in income taxes resulting from income taxes in other tax jurisdictions		(235,986	)		(290,478	)
Other		(246	)		(74	)
Expiration of tax asset		—			(22,342	)
Change in taxation rates in other jurisdictions		(184	)		36,335
Change in exchange rates		(2,522	)		(20,831	)
Change in valuation allowance		2,236			8,560
Taxation on disposed subsidiary		—			(39,913	)
	$	(3,692	)	$	(45,291	)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2011 and 2010 are presented below:

	2011			2010
Deferred tax assets:
Net operating loss carry forwards	$	141,699		$	139,463
Valuation Allowance		(141,699	)		(139,463	)
	$	—		$	—

The valuation allowance for deferred tax assets as of December 31, 2011 and 2010, was $141,699 and $139,463, respectively.  The net change in the total valuation allowance for the years ended December 31, 2011 and 2010, was an increase of $2,236 and a decrease $8,560 respectively. 

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in assessing the realizability of deferred tax assets. 

During the year ended December 31, 2011, $nil (2010 - $78,392) of these net operating loss carryforwards expired in Canada.