Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

INCOME TAXES

v3.6.0.2
INCOME TAXES
12 Months Ended
Sep. 30, 2016
Notes to Financial Statements  
NOTE 11. INCOME TAXES

The regional sources of tax losses for the years ended September 30, 2016, 2015 and 2014 were as follows:

 

    2016     2015     2014  
North America   $ (1,183,699 )   $ (813,409 )   $ (3,141,208 )
Outside North America     (568,784 )     (527,184 )     (716,713 )
    $ (1,752,483 )   $ (1,340,593 )   $ (3,857,921 )

 

Tax losses by year of origin and year of expiry are as follows:

 

Year of         Year of         Year of   Outside     Year of  
Origin   United States     Expiry   Canada     Expiry   North America     Expiry  
1998     212,899     2018                      
1999     795,878     2019                      
2000     6,179     2020                      
2001     292,351     2021                      
2002     1,017,792     2022                      
2003     1,189,476     2023                      
2004     790,108     2024                      
2005     2,166,634     2025   $ 732,448     2015            
2006     1,764,202     2026     682,619     2016            
2007     1,530,976     2027                 293,528     2014  
2008     1,266,180     2028                 99,852     2015  
2009     208,940     2029     97,040     2019     78,953     2016  
2010     477,350     2030     54,697     2020     27,267     2017  
2011     77,922     2031     184,138     2021              
2012     38,979     2032     90,950     2022              
2013     3,502     2033     123,867     2023     631,107     2020  
2014     3,060,847     2034     80,361     2024     716,713     2021  
2015     813,409     2035                 527,184     2022  
2016     1,035,805     2036     147,894     2026     568,784     2023  
TOTAL   $ 16,749,429         $ 2,194,014         $ 2,943,388        
                                       
CONSOLIDATED TAXLOSSES                           $ 21,886,831        

 

The tax effect of material temporary differences representing deferred tax assets is estimated as follows:

 

    2016     2015     2014  
Deferred tax assets:                  
North America   $ 6,047,290     $ 5,874,417     $ 5,846,486  
Outside North America     370,658       297,184       232,634  
Sub-total     6,417,948       6,171,601       6,079,120  
Less Valuation allowance     (6,417,948 )     (6,171,601 )     (6,079,120 )
Net deferred tax assets     -       -       -  

 

The valuation allowance as of September 30, 2016, 2015 and 2014 totaled $6,417,948, $6,171,601 and $6,079,120 respectively which consisted primarily of established reserves for deferred tax assets on non-capital operating loss carry forwards for our entities in United States and our foreign entities. The tax rates being used to determine deferred tax assets are estimated at 34.5% for North America and 15% for outside North America. The consolidated effective tax (benefit) rate as a percentage of income (loss) before income taxes is as follows.

 

    2016     2015     2014  
Combined Statutory Rates     31.3 %     31.3 %     31.3 %
Non-deductible expenses     (9 )     (9 )     (9 )
Change in valuation allowance     (22.3 )     (22.3 )     (22.3 )
Effective tax rate     0 %     0 %     0 %

 

As of September 30, 2016, 2015 and 2014 the Company had no unrecognized tax benefits and as such required no adjustments to the financial statements. The Company records any interest and penalties related to tax matters within general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. These amounts are not material to the consolidated financial statements for the periods presented. The Company’s US and Canadian tax returns are subject to examination by respective tax authorities. Generally, tax years 2007 – 2015 remain open to examination by those respective tax authorities. (IRS in the United States and Canada Customs and Revenue Agency in Canada).