Note 14 - Income Taxes

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

14. Income taxes:

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

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

December 31, 2020

and

2019,

are presented below:

	2020			2019
Computed "expected" tax benefit (expense)	$	(10,192	)	$	3,255,948
Change in statutory, foreign tax, foreign exchange rates and other		206,078			1,620,641
Permanent differences		(180,123	)		(3,382,662	)
Change in valuation allowance		39,480			(643,647	)
Income tax recovery	$	55,243		$	850,280

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

December 31, 2020

and

2019

are presented below:

	2020			2019
Deferred tax assets:
Net operating loss carry forwards	$	330,249		$	369,729
Valuation Allowance		(330,249	)		(369,729	)
	$	-		$	-

The valuation allowance for deferred tax assets as of

December 31, 2020

and

2019,

was

$330,249

and

$369,729,

respectively.  The net change in the total valuation allowance was a decrease of (

$39,480

) for the year ended

December 31, 2020 (

2019

– an increase of

$93,883

).

As at

December 31, 2020,

the Company's had

$2,915,457

 of non-capital losses expiring through

December 31, 2040.

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, 2020,

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

CAD$73,828

(

$55,243

) (

2019

-

CAD$130,145

(

$98,075

)) 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.