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INCOME TAXES
 12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
14. INCOME TAXES

 

British Virgin Islands

 

Dehaier is a tax-exempt company incorporated in the British Virgin Islands. BDL and BTL were incorporated in the PRC and are governed by the PRC laws.

 

Hong Kong

 

DHK is subject to Hong Kong profits tax at a rate of 17.5% on its assessable profits. No Hong Kong profits tax has been provided as the Company did not have any taxable profit that was earned in or derived from Hong Kong during the years presented.

 

PRC

 

PRC enterprise income tax is calculated based on the Enterprise Income Tax Law (the “EIT Law”). Under the EIT Law, a unified enterprise income tax rate of 25% and unified tax deduction standards will be applied equally to both domestic-invested enterprises and foreign-invested enterprises.

 

Under the current PRC laws, PRC government grants a preferential income tax rate of 15% to government-certified high technology companies, and under the new standard the period of validity for the certification of high technology companies is three years. In 2009, BDL updated its certification for “high technology” company. Therefore, BDL used a 15% income tax rate to calculate the income tax expense for the years ended December 31, 2011 and 2010. The high technology certification will expire and be renewed by 2012.

 

The tax rate for BTL is 25% in 2011 and 2010.

 

A reconciliation of income tax expense and the amount computed by applying the statutory income tax rate to the income before income tax provision is as follows:

  

    Year Ended December 31  
    2011     2010  
    US$     US$  
Tax computed at statutory rate     774,327       850,034  
Decrease in income taxes resulting from temporary differences     (118,030 )     -  
Permanent differences     -       -  
      656,297       850,034  

 

The tax provision consists of a current provision of $774,327 and $850,034 for 2011 and 2010, respectively, and a deferred benefit of $118,030 and $0, for 2011 and 2010, respectively.  

 

United States

Breathcare is a limited liability company and is not subject to federal income tax. As of December 31, 2011, Breathcare was inactive.