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INCOME TAXES
 12 Months Ended
Dec. 31, 2012
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
16. 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.

 

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 and 2012 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, 2012 and 2011.

 

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

 

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  
    2012     2011  
    US$     US$  
Tax computed at statutory rate     852,640       774,327  
Decrease in income taxes resulting from temporary differences     -       (118,030 )
Others     10,155       -  
      862,795       656,297  

 

Provision (Benefit) for income taxes consists of:

    Year Ended December 31  
    2012     2011  
    US$     US$  
Current provision     862,795       774,327  
Deferred provision (benefit)     -       (118,030 )
Total provision for income taxes     862,795       656,297  

 

United States

Breathcare is a limited liability company and, such as, is not subject to federal income tax. Moreover, as of December 31, 2012, Breathcare was inactive and generate no revenue.