Income Taxes

3 Months Ended

Mar. 31, 2019

11.

INCOME TAXES

The income tax laws of various jurisdictions in which the Company and its subsidiaries operate are summarized as follows:

United States

Consumer Capital Group Inc. was incorporated in United States, and is subject to corporate income tax rate of 21% for the three months ended March 31, 2019 and 2018, respectively.

The People’s Republic of China (PRC)

Arki (Beijing) E-commerce Technology Corp., America Pine (Beijing) Bio-Tech, Inc., America Arki (Fuxin) Network Management Co. Ltd., America Arki Network Service Beijing Co. Ltd., America Arki (Tianjin) Capital Management Partnership, Arki (Tianjin) E-Commerce Ltd. and Arki (Guangzhou) Investment Consulting Co. Ltd. were incorporated in the People’s Republic of China and subject to PRC income tax at 25%.

The new EIT Law also imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. Such withholding income tax was exempted under the previous income tax regulations.

The income tax laws of various jurisdictions in which the Company and its subsidiaries operate are summarized as follows:

	For the three months ended March 31,
	2019			2018
	(Unaudited)			(Unaudited)

Tax expense at statutory rate US		21	%		21	%
Foreign income not recognized in the U.S.		(21	)%		(21	)%

PRC enterprise income tax rate		25	%		25	%
Changes in valuation allowance and others		(25	)%		(25	)%

Effective income tax rates		-			-

Loss before income taxes consists of:

	For the three months ended March 31,
	2019			2018
	(Unaudited)			(Unaudited)

Non-PRC	$	(18,628	)	$	(4,104	)
PRC		(586,576	)		(875,222	)

Total	$	(605,204	)	$	(879,326	)

The principal components of the Company’s deferred income tax assets and liabilities are as follows:

	March 31, 2019			December 31, 2018
	(Unaudited)
Deferred tax assets:
Accrued interest payable	$	22,382		$	21,839
Accrual		33,356			32,546
Provision for loan losses		19,854			19,372
Total deferred tax assets	$	75,593		$	73,757
Less: Valuation allowance		(75,593	)		(73,757	)
Net total deferred tax assets	$	-		$	-

Deferred tax liabilities:
Accrued interest receivable	$	35,375		$	34,516
Accrued interest payable		45,828			44,716
Net total deferred liabilities	$	81,203		$	79,232

As of March 31, 2019 and December 31, 2018, the Company has deferred tax asset of $0 and $0, respectively, and deferred tax liabilities of $81,203 and $79,232, respectively, resulting from certain net operating losses in the PRC. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those net operating losses are available. The Company considers projected future taxable income and tax planning strategies in making its assessment. As of March 31, 2019 and December 31, 2018, the Company does not have sufficient operations to generate taxable income in Arki E-Commerce, America Pine, Arki Network, Arki Capital and Arki Tianjin E-Commerce to conclude that it is more-likely-than-not that the Company will be able to realize all of its tax benefits in the near future and therefore a valuation allowance has been provided for the full value of the deferred tax asset. A valuation allowance will be maintained until sufficient positive evidence exists to support the reversal of any portion or all of the valuation allowance. Should Arki E-Commerce, America Pine, Arki Network, Arki Capital and Arki Tianjin E-Commerce have sufficient operation to generate taxable income in future periods with a supportable trend; the valuation allowance will be reduced accordingly. As of March 31, 2019 and December 31, 2018, $75,593 and $73,758 valuation allowance was recorded respectively.

Consumer Capital Group, Inc. 10-Q