Company: IPSI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026455
Chunk: 1158

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 5
Chunk 1158
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 on a convertible note on July 28, 2024, which resulted in the triggering of a variable priced conversion
feature, giving rise to a derivative liability on the payment due date, this gave rise to an additional derivative liability and loss
on convertible notes of $56,329.

17INCOME TAXES

The
Company’s operations are based in the US and currently enacted tax laws in the US are used in the calculation of income taxes.

Federal
Income Tax - United States

On
December 22, 2017, the Tax Cuts and Jobs Act (the TCJA), which significantly modified U.S. corporate income tax law, was signed into law
by President Trump. The TCJA contains significant changes to corporate income taxation, including but not limited to the reduction
of the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for
interest expense to 30% of earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80%
of current year taxable income and generally eliminating net operating loss carrybacks, allowing net operating losses to carryforward
without expiration, one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of
U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions
for depreciation expense over time, and modifying or repealing many business deductions and credits (including changes to the orphan drug
tax credit and changes to the deductibility of research and experimental expenditures that will be effective in the future). Notwithstanding
the reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain, including to what extent various
states will conform to the newly enacted federal tax law.

Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities
are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using
the currently enacted tax rates and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on
available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes
as interest expense or penalties expense. As of December 31, 2022 and 2021, there have been no interest or penalties incurred on income
taxes.

F-