INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE－ 19 INCOME TAXES

For the years ended December 31, 2022 and 2021, the local (“Nevada”) and foreign components of loss before income taxes were comprised of the following:

	Years ended December 31,
	2022		2021
Tax jurisdiction from:
- Local	$	25,776,146	$	32,901,996
- Foreign		8,235,245		1,951,608
Loss before income taxes	$	34,011,391	$	34,853,604

The provision for income taxes consisted of the following:

	Years ended December 31,
	2022		2021
Current:
- United States	$	—	$	—
- Singapore		—		—
- Vietnam		—		—
- India		3,631		11,136
Deferred:
- United States		—		—
- Singapore		—		—
- Vietnam		—		—
- India		—		—
Income tax expense	$	3,631	$	11,136

A reconciliation of the income tax provision (benefit) by applying the statutory United States federal income tax rate to income (loss) before income taxes is as follows:

	Years ended December 31,
Rate Reconciliation	2022					2021
Expected tax at statutory rates		(7,142,392	)	21.00	%		(6,090,419	)	21.00	%
Nondeductible expenses		733,498		(2.16	)%		6,979		(0.02	)%
State income tax, net of federal benefit		(10,506	)	(0.12	)%		—
Foreign taxes at rate different than US taxes		207,300		(0.61	)%		—		—
Current year change in valuation allowance		6,030,898		(17.59	)%		5,718,337		(17.00	)%
Prior deferred true up		184,833		(0.54	)%		1,184,103		(4.00	)%
		3,631		(0.01	)%		—		—

The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company operates in various countries: Singapore and Vietnam that are subject to taxes in the jurisdictions in which they operate, as follows:

United States

The Company is registered in the Nevada and is subject to the tax laws of United States.

As of December 31, 2022, the operation in the U.S. incurred $22,633,994 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards has no expiration.

There is also net operating losses from State of California in the amount of $556,383 that carries forward indefinitely. After consideration of all the evidence, both positive and negative, management has recorded a full valuation allowance at December 31, 2022 and 2021, due to the uncertainty of realizing the deferred income tax assets. 

Singapore

The Company’s subsidiary is registered in the Republic of Singapore and is subject to the tax laws of Singapore.

As of December 31, 2022, the operation in the Singapore incurred $5,585,257 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards has no expiration. The Company has provided for a full valuation allowance against the deferred tax assets of $975,690 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

Vietnam

The Company’s subsidiary operating in Vietnam is subject to the Vietnam Income Tax at a standard income tax rate of 20% during its tax year.

As of December 31, 2022, the operation in the Vietnam incurred $2,826,880 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2026, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $565,376 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

India

The Company’s subsidiary operating in India is subject to the India Income Tax at a standard income tax rate of 25% during its tax year.

As of December 31, 2022, the operation in the India incurred $14,500 of net operating gain. The Company has provided for a full tax effect allowance against the current and deferred tax expenses of $3,625.

Indonesia

The Company’s subsidiary is registered in Indonesia and is subject to the tax laws of Indonesia.

As of December 31, 2022, the Company’s subsidiary operations in Indonesia incurred $388,409 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards have no expiration. The Company has provided for a full valuation allowance against the deferred tax assets of $85,450 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

Philippines

The Company’s subsidiary is registered in the Philippines and is subject to the tax laws of the Philippines.

As of December 31, 2022, the Company’s subsidiary operations in Philippines incurred $576,843 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards have no expiration. The Company has provided for a full valuation allowance against the deferred tax assets of $144,211 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

Thailand

The Company’s subsidiary is registered in Thailand and is subject to the tax laws of Thailand.

As of December 31, 2022, the Company's subsidiary operations in Thailand incurred $699,701 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards have no expiration. The Company has provided for a full valuation allowance against the deferred tax assets of $139,940 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

Malaysia

The Company’s subsidiary is registered in Malaysia and is subject to the tax laws of Malaysia.

As of December 31, 2022, the operation in the Malaysia incurred $7,034 of net operating gain. The Company has provided for a full tax effect allowance against the current and deferred tax expenses of $1,688.

Deferred tax assets and liabilities are recognized for future tax consequences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the tax year in which the differences are expected to reverse. Significant deferred tax assets and liabilities of the Company as of December 31, 2022 and 2021 consist of the following:

	December 31, 2022			December 31, 2021
Deferred tax assets:
Software intangibles (U.S)	$	261,555		$	150,465
Deferred Stock Compensation (U.S.)		7,539,329			5,864,670
ROU net liability		248
Net operating loss carryforwards
-  United States		4,791,994			1,875,143
-  Singapore		975,690			272,937
-  Vietnam		563,376			260,418
-  India		—			—
-  Philippines		144,211			—
-  Indonesia		85,450			—
-  Thailand		139,940			—
-  Malaysia		—			—
		14,503,793			8,423,633
Less: valuation allowance		(14,503,793	)		(8,423,633	)
Deferred tax assets, net	$	—		$	—

The Internal Revenue Code includes a provision, referred to as Global Intangible Low-Taxed Income (“GILTI”), which provides for a 10.5% tax on certain income of controlled foreign corporations. We have elected to account for GILTI as a period cost if and when occurred, rather than recognizing deferred taxes for basis differences expected to reverse.

The Company is subject to taxation in the U.S. California and various foreign jurisdictions. U.S. federal income tax returns for 2018 and after remaining open to examination. We and our subsidiaries are also subject to income tax in multiple foreign jurisdictions. Generally, foreign income tax returns after 2018 remain open to examination. No income tax returns are currently under examination. As of December 31, 2022 and 2021, the Company does not have any unrecognized tax benefits, and continues to monitor its current and prior tax positions for any changes. The Company recognizes penalties and interest related to unrecognized tax benefits as income tax expense. For the years ended December 31, 2022 and 2021, there were no penalties or interest recorded in income tax expense.