FRHC and FFIN are subject to taxation in the U.S. Freedom RU, FFIN Bank and Freedom 24 are subject to taxation in the Russian Federation. Freedom KZ and KZ Branch are subject to taxation in Kazakhstan.

The tax rate used for reconciliations for the six months ended September 30, 2017 and March 31, 2017, is the 20% corporate tax rate payable by corporate entities in the Russian Federation and the Republic of Kazakhstan on taxable profits under tax law in those jurisdictions.

Deferred tax assets and liabilities subject to taxation in the Russian Federation and Republic of Kazakhstan comprise:

The tax rate used for reconciliations for the six months ended September 30, 2017 and 2016, is the 20% corporate tax rate payable by corporate entities in the Russian Federation and the Republic of Kazakhstan on taxable profits under tax law in those jurisdictions. During the six months ended September 30, 2017 and 2016, the effective tax rate was equal to 2.67% and (98.38%), respectively, primarily due to non-taxable gain on trading securities in Freedom KZ in the amounts of $35,096 and $5,610, respectively. During the six months period ended September 30, 2017, the Company realized net income before income tax of $36,959, primarily from non-taxable revenues generated from the Company’s Freedom KZ’s trading operations, and utilized tax loss carryforwards of $628. This resulted in the Company realizing an income tax expense during the six months ended September 30, 2017 of $987. During the six months ended September 30, 2016, the Company realized a net income before income tax of $556 resulting in an income tax benefit of $547, primarily from non-taxable revenues generated from Freedom KZ’s trading operations. During the six months ended September 30, 2017, the Company did not recognize tax loss carryforwards of $2,043 on operations of Freedom KZ.

FRHC and FFIN are subject to United States federal and state income taxes at an approximate rate of 34% and 3.3%, respectively.

Deferred tax assets subject to taxation of United States federal and state income taxes comprise:

As of September 30, 2017, net deferred tax liabilities in the amount of $159 were comprised of $856 of deferred tax liabilities of Freedom RU and tax assets of Freedom RU and FFIN Bank of $626 and $71, respectively.

As of March 31, 2017, net deferred tax assets in the amount of $1,026 comprised deferred tax assets of Freedom RU and FFIN Bank of $90 and $936, respectively.