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 six months ended September 30, 2018 and 2017, is 25% and 37.3%, respectively for the US, 20% for the Russian Federation, Kazakhstan, Kyrgyzstan, Ukraine and Uzbekistan and 12.5% for Cyprus.

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

During the six months ended September 30, 2018 and 2017, the effective tax rate was equal to (11.16%) and 2.65%, respectively. The change in effective tax rate was primarily due to changes in the composition of Freedom KZ revenues we realized from our trading activity and the tax treatment of those revenues in Kazakhstan, and due to unrecognized tax loss carryforwards on FRHC in the amount of $228. During the six months ended September 30, 2017, the effective tax rate was primarily impacted due to non-taxable gains on trading securities in Freedom KZ in the amount of $35,096.

During the six-month period ended September 30, 2018, the Company realized net loss before income tax of $4,159, primarily from operating expenses of Freedom KZ, Freedom RU and FRHC that have unrecognized tax losses carryforward. These losses were offset by revenue from commission income of Freedom CY in the amount of $7,663, taxable in Cyprus at a tax rate of 12.5%. This resulted in the Company realizing an income tax expense during the six months ended September 30, 2018 of $464. During the six-month period ended September 30, 2017, the Company realized net income before income tax of $36,366, primarily from non-taxable revenues generated from Freedom KZ’s trading operations and from utilizing tax loss carryforwards of $628.

During the three months ended September 30, 2018 and 2017, the effective tax rate was equal to 26.36% and 3.51%, respectively. The increase in effective tax rate was primarily due to changes in the composition of Freedom KZ revenues we realized from our trading activity and the tax treatment of those revenues in Kazakhstan, and due to unrecognized tax loss carryforwards on FRHC in the amount of $228. During the three months ended September 30, 2017 due to non-taxable gains on trading securities in Freedom KZ in the amount of $27,301.

During the three-month period ended September 30, 2018, the Company realized net gain before income tax of $2,329, primarily from earned revenue from commission income of Freedom CY in the amount of $5,984, taxable in Cyprus at a tax rate of 12.5%. These losses were offset by operating expenses of Freedom KZ, Freedom RU and FRHC that have unrecognized tax losses carryforward. This resulted in the Company realizing an income tax expense during the three months ended September 30, 2018 of $614. During the three months period ended September 30, 2017, the Company realized net income before income tax of $28,410, primarily from non-taxable revenues generated from Freedom KZ’s trading operations and from utilizing tax loss carryforwards of $291.