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, 2019 and 2018, is 21% for the U.S., 20% for the Russian Federation, Kazakhstan, Kyrgyzstan, 31% for Germany, 12.5% for Cyprus, 18% for Ukraine and 12% 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, 2019 and 2018, the Company realized net income before income tax of $8,515 and $18,615, respectively. During the same periods, the Company’s effective tax rate was equal to 16.07% and 2.25%, respectively. This increase in income tax expense despite lower income before income taxes was primarily attributable to a $20,432 increase in commissions earned by Freedom CY during the fiscal year ended March 31, 2019.

Tax losses carryforward as of March 31, 2019 was $ 2,376 and is subject to income tax in US, Russia, Ukraine and Uzbekistan.