Global Clean Energy Holdings, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 12 - Income Taxes

Note 12 - Income Taxes

12 Months Ended

Dec. 31, 2015

Note 12 - Income Taxes

Income taxes are provided for temporary differences between financial and tax bases of assets and liabilities. The following is a reconciliation of the amount of benefit that would result from applying the federal statutory rate to pretax loss with the benefit from income taxes for the years ended December 31, 2015 and 2014:

Rate Reconciliation
	2015	2014
Federal income tax (benefit) at statutory rate (34%)	$(3,066,000)	$(814,000)
State income tax (benefit) , net of federal benefit	(69,000)	(7,000)
Foreign income tax benefit	-	-
Losses allocated to preferred members of GCE Mexico	2,616,000	743,000
Losses allocated GEHD	57,000	34,000
Share-based compensation	16,000	66,000
Expiration of operating loss and research credit carryforwards	-	-
Other differences	(27,600)	4,000
Change in valuation allowance	179,000	(26,000)
Income tax benefit	$-	$-

The components of deferred tax assets and liabilities are as follows at December 31, 2015 and 2014, using a combined deferred income tax rate of 40%:

Components of Net Deferred Taxes
	2015	2014
Net operating loss carryforward	$7,507,000	$7,188,000
Share-based compensation	483,000	752,000
Accrued compensation and other liabilities	830,000	701,000
Impairment of long lived assets	42,000	42,000
Other	-	-
Valuation allowance	(8,862,000)	(8,683,000)
Net deferred tax asset	$-	$-

The Company has available net operating losses of approximately $14,047,000 which can be utilized to offset future earnings of the Company. The utilization of the net operating losses are dependent upon the tax laws in effect at the time such losses can be utilized. The loss carryforwards expire between the years 2015 and 2035. Should the Company experience a significant change of ownership, the utilization of net operating losses could be reduced.

The Company and its subsidiaries file tax returns in the U.S. Federal jurisdiction and, in the state of California. The Company is no longer subject to U.S. federal tax examinations for tax years before and including December 31, 2011. The Company is no longer subject to examination by state tax authorities for tax years before and including December 31, 2010. During the years ended December 31, 2015 and 2014, the Company did not recognize interest and penalties.