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Note 10 - Income Tax
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Mar. 31, 2012
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| Income Tax Disclosure [Text Block] |
Note
10 – Income Tax
The
Company is subject to income taxes by entity on income
arising in or derived from the tax jurisdiction in which
each entity is domiciled.
Deer,
the U.S. parent company, was incorporated in the U.S. and
has net operating losses (NOL) for income tax
purposes. Deer has net operating loss carry forwards
for income taxes of $262,827 as at March 31, 2012, which
may be available to reduce future years’ taxable
income as NOL; NOL can be carried forward up to 20 years
from the year the loss is incurred. Management believes the
realization of benefits from these losses remains uncertain
due to Deer’s limited operating history and
continuing losses. Accordingly, a 100% deferred
tax asset valuation allowance has been
provided.
Deer
International was incorporated in the BVI and there is no
income tax for a company domiciled in the BVI. Accordingly,
the Company’s consolidated financial statements do
not present any income tax provisions related to the BVI
tax jurisdiction where Deer International is
domiciled.
Local
PRC Income Tax
Pursuant
to the tax laws of China, general enterprises are subject
to income tax at an effective rate of 25%. Winder enjoyed a
15% preferential income tax effective as of 2009 until
expiration on December 31, 2011, as a result of its status
as a high tech enterprise. For the period ended March
31, 2012, Winder used standard tax rate of 25% to record
income tax expenses.
The
following is a reconciliation of tax at the U.S. federal
statutory rate to the provision for income tax recorded in
the consolidated financial statements for the three months
ended March 31, 2012 and 2011:
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