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

The tax rates used for deferred tax assets and liabilities for the three months ended June 30, 2018 and 2017, is 25% and 37.3%, respectively for the US and 20% for the Russian Federation, Kazakhstan, Kyrgyzstan, Ukraine and Uzbekistan.

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

During the three months ended June 30, 2018 and 2017, the effective tax rate was equal to 2.13% and (0.41%), respectively. During the three months ended June 30, 2018, effective tax rate was primarily impacted due to unrecognized tax losses carryforward on Freedom KZ and FRHC in the amount of $309 and $1,666, respectively, and during the three months ended June 30, 2017 due to non-taxable gains on trading securities in Freedom KZ in the amount of $7,795.

During the three-month period ended June 30, 2018, the Company realized net loss before income tax of $7,033, primarily from operating expenses of the Company and losses of Freedom KZ on trading operations. This resulted in the Company realizing an income tax benefit during the three months ended June 30, 2018 of $150. During the three months ended June 30, 2017, the Company realized a net income before income tax of $7,957 primarily from non-taxable revenues generated from Freedom KZ’s trading operations and utilized tax loss carryforwards of $203. This resulted in the Company realizing an income tax benefit during the three months ended June 30, 2017 of $33.