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INCOME TAXES
 3 Months Ended
Mar. 31, 2012
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
12. 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 three months ended March 31, 2012 and 2011. The high technology certification will expire and be renewed in September 2012.

 

The tax rate for BTL is 25% in 2012 and 2011.

 

United States

Breathcare is a limited liability company and is not subject to federal income tax. As of March 31, 2012, Breathcare was inactive.