Annual report pursuant to Section 13 and 15(d)

DEFERRED TAX LIABILITIES ASSETS

v3.21.1
DEFERRED TAX LIABILITIES ASSETS
12 Months Ended
Mar. 31, 2021
DEFERRED TAX LIABILITIES ASSETS  
DEFERRED TAX LIABILITIES ASSET

NOTE 8 - DEFERRED TAX (LIABILITIES)/ASSETS

 

The Company is subject to taxation in the Russian Federation, Kazakhstan, Kyrgyzstan, Cyprus, Ukraine, Uzbekistan, Germany and the United States of America.

 

The tax rates used for deferred tax assets and liabilities for the years ended March 31, 2021 and 2020, were 21% for the U.S., 20% for the Russian Federation, Kazakhstan, Kyrgyzstan, 31% for Germany, 12.5% for Cyprus, 18% for Ukraine and 15% for Uzbekistan.

 

Deferred tax assets and liabilities of the Company are comprised of the following:

 

 

 

March 31, 2021

 

 

March 31, 2020

 

 

 

 

 

 

 

 

Deferred tax assets:

 

 

 

 

 

 

Tax losses carryforward

 

$ 316

 

 

$ 1,691

 

Accrued liabilities

 

 

236

 

 

 

7

 

Depreciation

 

 

16

 

 

 

-

 

Revaluation on trading securities

 

 

-

 

 

 

72

 

Stock compensation expenses

 

 

-

 

 

 

4

 

Valuation allowance

 

 

(316 )

 

 

(677 )

Deferred tax assets

 

$ 252

 

 

$ 1,097

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Revaluation on trading securities

 

$ 2,546

 

 

$ 513

 

Fixed and Intangible Assets

 

 

1,568

 

 

 

-

 

Subordinated debt

 

 

523

 

 

 

-

 

Other liabilities

 

 

-

 

 

 

14

 

Deferred tax liabilities

 

$ 4,637

 

 

$ 527

 

 

 

 

 

 

 

 

 

 

Net deferred tax (liabilities)/assets

 

$ (4,385

)

 

$ 570

 

The Company is subject to the U.S. federal income taxes at a rate of 21%. The reconciliation of the provision for income taxes at the 21% tax rate compared to the Company’s income tax expense as reported is as follows:

 

 

 

Year ended

March 31, 2021

 

 

Year ended

March 31, 2020

 

 

 

 

 

 

 

 

Profit before tax at 21%

 

$ 36,335

 

 

$ 5,908

 

Global intangible low taxed income

 

 

18,451

 

 

 

4,803

 

Stock based compensation

 

 

348

 

 

 

551

 

Provision for impairment losses

 

 

187

 

 

 

(295 )

Permanent differences

 

 

24

 

 

793

 

Valuation allowance

 

 

(361

)

 

 

416

 

Nontaxable gains

 

 

(4,244 )

 

 

401

 

Foreign tax credit

 

 

(10,155 )

 

 

(3,503 )

Foreign tax rate differential

 

 

(10,487 )

 

 

(2,938 )

Losses carried forward adjustment

 

 

-

 

 

 

(154 )

Other differences

 

 

-

 

 

 

20

 

Income tax provision

 

$ 30,098

 

 

$ 6,002

 

 

The income tax expense comprises:

 

 

 

Year ended

March 31, 2021

 

 

Year ended

March 31, 2020

 

Current income tax charge

 

$ 27,386

 

 

$ 5,307

 

Deferred income tax charge

 

 

2,712

 

 

 

695

 

Income tax provision

 

$ 30,098

 

 

$ 6,002

 

 

During the years ended March 31, 2021 and 2020, the Company realized net income before income tax of $173,022 and $28,132, respectively. During the same periods, the Company’s effective tax rate was equal to 17.4% and 21.34%, respectively. This decrease in income tax expense was primarily attributable to non-taxable gains on trading securities in Freedom KZ and Freedom Bank KZ.

 

Tax losses carryforward as of March 31, 2021, was $316 in Uzbekistan.