Note 8 - Income Taxes

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8.

   Income Taxes:

Shoal Games Ltd. is domiciled in the tax-free jurisdiction of Anguilla, British West Indies. However certain of the Company's subsidiaries incur income taxation.

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 U.S. federal corporate income tax rate from

34%

to

21%

effective

January 1, 2018.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at

September 30, 2018,

and

December 31, 2017,

are presented below:

	September 30, 2018			December 31, 2017
Deferred tax assets:
Net operating loss carry forwards	$	223,391		$	102,809
Valuation Allowance		(223,391	)		(102,809	)
	$	-		$	-

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. 

Subsequent to the quarter ended

September 30, 2018,

Shoal Media (Canada) Inc., a subsidiary of Shoal Games Ltd., received the British Columbia Interactive Digital Media Tax Credit of

CAD$116,085

(

$88,887

) for the year ended

December 31, 2017

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.