Taxes Payable

3 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

TAXES PAYABLE

NOTE 12 – TAXES PAYABLE

Enterprise Income Tax

Effective January 1, 2008, the Enterprise Income Tax (“EIT”) law of the PRC replaced the tax laws for Domestic Enterprises (“DEs”) and Foreign Invested Enterprises (“FIEs”). The EIT rate of 25% replaced the 33% rate that was applicable to both DEs and FIEs. The two-year tax exemption and three-year 50% tax reduction tax holiday for production-oriented FIEs was eliminated. Since January 1, 2008, Jinong became subject to income tax in China at a rate of 15% as a high-tech company, because of the expiration of its tax exemption on December 31, 2007. Accordingly, it made provision for income taxes for the three-month period ended September 30, 2021 and 2020 of $112,023 and $1,569,003, respectively.

Value-Added Tax

All the Company’s fertilizer products that are produced and sold in the PRC were subject to a Chinese Value-Added Tax (VAT) of 13% of the gross sales price. On April 29, 2008, the PRC State of Administration of Taxation (SAT) released Notice #56, “Exemption of VAT for Organic Fertilizer Products”, which allows certain fertilizer products to be exempt from VAT beginning June 1, 2008. The Company submitted the application for exemption in May 2009, which was granted effective September 1, 2009, continuing through December 31, 2015. On August 10, 2015 and August 28, 2015, the SAT released Notice #90. “Reinstatement of VAT for Fertilizer Products”, and Notice #97, “Supplementary Reinstatement of VAT for Fertilizer Products”, which restore the VAT of 13% of the gross sales price on certain fertilizer products includes non-organic fertilizer products starting from September 1, 2015, but granted taxpayers a reduced rate of 3% from September 1, 2015 through June 30, 2016.

On April 28, 2017, the PRC State of Administration of Taxation (SAT) released Notice 2017 #37, “Notice on Policy of Reduced Value Added Tax Rate,” under which, effective July 1, 2017, all the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax (VAT) of 11% of the gross sales price. The tax rate was reduced 2% from 13%.

On April 4, 2018, the PRC State of Administration of Taxation (SAT) released Notice 2018 #32, “Notice on Adjustment of VAT Tax Rate,” under which, effective May 1, 2018, all the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax (VAT) of 10% of the gross sales price. The tax rate was reduced 1% from 11%.

On March 20, 2019, the PRC State of Administration of Taxation (SAT) released Notice 2019 #39, “Announcement on Policies Concerning Deepening the Reform of Value Added Tax,” under which, effective April 1, 2019, all the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax (VAT) of 9% of the gross sales price. The tax rate was reduced 1% from 10%.

Income Taxes and Related Payables

	September 30,			June 30,
	2021			2021
VAT provision	$	(330,509	)	$	(284,940	)
Income tax payable		1,179,680			1,136,929
Other levies		2,696,881			2,679,970
Repatriation tax		29,010,535			29,010,535
Total	$	32,556,587		$	32,542,494

The provision for income taxes consists of the following:

	September 30,		September 30,
	2021		2020
Current tax - foreign	$	112,023	$	1,569,003
Deferred tax		-		-
Total	$	112,023	$	1,569,003

Significant components of deferred tax assets were as follows:

	September 30,			June 30,
	2021			2021
Deferred tax assets
Deferred Tax Benefit		36,429,570			36,359,106
Valuation allowance		(36,429,570	)		(36,359,106	)
Total deferred tax assets	$	-			-

Tax Rate Reconciliation

Our effective tax rates were approximately -0.7% and-5.6% for the three months ended September 30, 2021 and 2020, respectively. Substantially all the Company’s income before income taxes and related tax expense are from PRC sources. Actual income tax benefit reported in the consolidated statements of operations and comprehensive income (loss) differ from the amounts computed by applying the US statutory income tax rate of 21.0% to income before income taxes for the Three months Ended September 30, 2021 and 2020 for the following reasons:

September 30, 2021

	China					United States
	15% - 25%					21%					Total
Pretax loss	$	(14,510,752	)				(454,433	)			$	(14,965,185	)
Expected income tax expense (benefit)		(3,627,688	)	25.0	%		(95,431	)	21.0	%		(3,723,119	)
High-tech income benefits on Jinong		954,729		(6.6	)%		-		-			954,729
Losses from subsidiaries in which no benefit is recognized		2,714,518		(18.7	)%		-		-			2,714,518
Change in valuation allowance on deferred tax asset from US tax benefit		70,464		(0.5	)%		95,431		(21.0	)%		165,895
Actual tax expense	$	112,023		(0.8	)%	$	-		-	%	$	112,023		(0.7	)%

September 30, 2020

	China					United States
	15% - 25%					21%					Total
Pretax loss	$	(27,671,412	)				(455,876	)			$	(28,127,288	)		(1)
Expected income tax expense (benefit)		(6,917,853	)	25.0	%		(95,734	)	21.0	%		(7,013,587	)
High-tech income benefits on Jinong		(178,593	)	0.6	%		-		-			(178,593	)
Losses from subsidiaries in which no benefit is recognized		7,750,951		(28.0	)%		-		-			7,750,951
Change in valuation allowance on deferred tax asset from US tax benefit		914,498		(3.3	)%		95,734		(21.0	)%		1,010,232
Actual tax expense	$	1,596,003		(5.7	)%	$	-		-	%	$	1,569,003		(5.6	)%

(1) The numbers are excluding discontinued entities.