INCOME TAXES

12 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

14. INCOME TAXES

The loss before income taxes of the Company for the years ended March 31, 2022 and 2021 were comprised of the following:

	For the years ended March 31
	2022			2021
Tax jurisdictions from:
– Local	$	(54,489	)	$	(74,619	)
– Foreign, representing:
Marshall Islands (non-taxable jurisdiction)		-			(1,142	)
Hong Kong					1,312
Malaysia		(388,779	)		50,726
Loss before income taxes	$	(443,268	)	$	(11,862	)

Provision for income taxes consisted of the following:

		For the years ended March 31
		2022		2021
Current:
– Local	$	-	$	-
– Foreign:
Marshall Islands (non-taxable jurisdiction)		-		-
Hong Kong		-		-
Malaysia		-		-
Deferred:
– Local		-		-
– Foreign		-		-
	$	-	$	-

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. During the periods presented, the Company has a number of subsidiaries that operates in different countries and is subject to tax in the jurisdictions in which its subsidiaries operate, as follows:

United States of America

The Tax Act reduces the U.S. statutory corporate tax rate from 35% to 21% for our tax years beginning in 2018. The Company is registered in the State of Nevada and is subject to United States of America tax law. As of March 31, 2022, the operations in the United States of America incurred $190,541 of cumulative net operating losses (NOL’s) which can be carried forward to offset future taxable income. The NOL carry forwards begin to expire in 2042, if unutilized. The Company has provided for a full valuation allowance of approximately $40,093 against the deferred tax assets on the expected future tax benefits from the net operating loss carry forwards as the management believes it is more likely than not that these assets will not be realized in the future.

Hong Kong

Synergy Empire HK operating in Hong Kong are subject to the Hong Kong Profits Tax at the statutory income tax rate of 8.25% on assessable profits up to HK$2,000,000; and 16.5% on any part of assessable profits over HK$2,000,000. As of March 31, 2021, subsidiary in Hong Kong incurred an aggregate operating loss of $3,244. The cumulative operating losses can be carried forward to offset future taxable income. The Company has provided for a full valuation allowance against the deferred tax assets of $268 on the expected future tax benefits.

Concurrent with the disposal of Synergy Empire HK, the Company will cease operations in Hong Kong, as such all deferred tax assets will be transferred to Mr. Leong Will Liam.

Malaysia

Lucky Star F&B Sdn. Bhd. and SH Dessert Sdn. Bhd. are subject to the Malaysia Corporate Tax Laws at a two tier corporate income tax rate based on amount of paid up capital. The 2022 tax rate for company with paid-up capital of MYR 2,500,000 (approximately $603,486) or less and that are not part of a group containing a company exceeding this capitalization threshold is 17% on the first MYR 500,000 (approximately $120,060) taxable profit with the remaining balance being taxed at 24%.

For the year ended March 31, 2022, Lucky Star F&B Sdn. Bhd. incurred a loss of $238,173 which can be carried forward for seven years to offset its taxable income. Meanwhile, SH Dessert Sdn. Bhd. has a loss of $150,451, which will be utilized to set off against previous accumulated loss.

As of March 31, 2022, the operations in Malaysia generated $1,405,100 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss can be carried forward for seven years. The Company has provided for a full valuation allowance against the deferred tax assets of $238,867 on the expected future tax benefits from the net operating loss carry forwards as the management believes it is more likely than not that these assets will not be realized in the future.

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of March 31, 2022 and March 31, 2021:

	As of March 31
	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$			$
– United States of America		40,093			28,691
– Marshall Islands		-			-
– Hong Kong		-			-
– Malaysia		238,867			172,801
		278,960			201,452
Less: valuation allowance		(278,960	)		(201,452	)
Deferred tax assets	$			$	-

Management believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company provided for a full valuation allowance against its deferred tax assets of $278,960 as of March 31, 2022. For the year ended March 31, 2022, the valuation allowance increased by $77,508, primarily relating to the loss incurred by the Company, Lucky Star F&B Sdn. Bhd and SH Dessert Sdn. Bhd.