10.	Income taxes:

The Company is domiciled in the tax-free jurisdiction of Anguilla, British West Indies. The computed benefit / expense differed f

rom the amounts computed by applying the United States of America federal income tax rate of

34%

and various other rates for other jurisdictions to the pretax income / losses from operations as a result of the following:

	2017			2016
Computed "expected" tax benefit (expense)	$	592,264		$	1,072,702
Reduction in income taxes resulting from income taxes in other tax jurisdictions		(494,697	)		(1,072,270	)
Other		(30	)		(35	)
Change in taxation rates in other jurisdictions		-			-
Change in exchange rates		21,016			1,190
Change in valuation allowance		(87,792	)		(2,881	)
	$	30,761		$	(1,294	)

The Tax Cuts and Jobs Act ("Tax Act"

) was signed into law on

December 22, 2017.

Included as part of the law, was a permanent reduction in the federal corporate income tax rate from

34%

21%

effective

January 1, 2018.

The tax effects of temporary differences that give rise to significant p

ortions of the deferred tax assets and deferred tax liabilities at

December 31, 2017

and

2016

are presented below:

	2017			2016
Deferred tax assets:
Net operating loss carry forwards	$	102,809		$	15,017

Valuation Allowance		(102,809	)		(15,017	)
	$	-		$	-

The valuation allowance for deferred tax assets as of

December 31, 2017

and

2016,

was

$102,809

and

$15,017,

respectively.

The net change in the total valuation allowance was an increase of

$87,792

for the year ended

December 31, 2017,

and a decrease of

$2,881

for the year ended

December 31, 2016.

As at

December 31, 2017,

the Company

’s had

$207,497

of non-capital losses expiring through

December 31, 2037.

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

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, p

rojected future taxable income, and tax planning strategies in assessing the realizability of deferred tax assets.

During the year ended

December 31, 2017,

Shoal Media (Canada) Inc., a subsidiary of Shoal Games Ltd., received the British Columbia Interact

ive Digital Media Tax Credit of

CAD$39,919

(

$30,761

) for the year ended

December 31, 2016

from the British Columbia Provincial Government. The Company recognized this tax credit as a recovery of income tax expense on the statement of operations upon receipt of funds.