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:

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:

The income tax expense comprises:

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.