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Note 12 - Income Taxes and Other Taxes Payable | 12 Months Ended
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Dec. 31, 2012
Income Tax Disclosure [Text Block] | Note 12 – Income Taxes and Other Taxes Payable Taxes payable consisted of the following at December 31, 2012 and 2011:
|  |  | 2012 |  |  |  | 2011 |
Income tax payables |  | $ | 255,793 |  |  | $ | 38,391 |
Other taxes payable |  |  | 16,366 |  |  |  | 160,593 |
Total tax payable - current |  | $ | 272,159 |  |  | $ | 198,984 |
Total income tax payable - noncurrent |  | $ | 4,608,592 |  |  | $ | 4,016,266 |
Other taxes payable includes VAT, city construction, sales tax and stamp tax. The components of income before income taxes consisted of the following for the years ended December 31, 2012 and 2011:
|  | 2012 |  |  | 2011 |
Income (Loss) subject to domestic income taxes only |  | $ | 491,393 |  |  | $ | (139,515) |
Income subject to foreign income taxes only |  |  | 6,014,144 |  |  |  | 6,965,191 |
Total |  | $ | 6,505,537 |  |  | $ | 6,825,676 |
The Company’s subsidiaries incorporated in the PRC are subject to enterprise income taxes. The provision for income taxes consisted of the following for the years ended December 31, 2012 and 2011:
|  | 2012 |  |  | 2011 |
Current |  |  |  |  |  |
Federal |  | $ | 363,780 |  |  | $ | 707,533 |
State |  |  | 35,187 |  |  |  | 800 |
PRC |  |  | 509,623 |  |  |  | 924,653 |
Total current |  |  | 908,590 |  |  |  | 1,632,986 |
Deferred |  |  |  |  |  |  |  |
Federal |  |  | 143,431 |  |  |  | (151,937) |
State |  |  | 26,021 |  |  |  | (26,072) |
PRC |  |  | (6,388 | ) |  |  | 5,534 |
Total deferred |  |  | 163,064 |  |  |  | (172,475 | )
Total |  | $ | 1,071,654 |  |  | $ | 1,460,511 |
The following is a reconciliation of the difference between the actual provision for income taxes and the provision computed by applying the federal statutory rate on income before income taxes for the years ended December 31, 2012 and 2011:
|  | 2012 |  |  | 2011 |
Tax at federal statutory rate |  | $ | 2,211,861 |  |  | $ | 2,320,730 |
Domestic permanent differences |  |  | 8,666 |  |  |  | (104,501 | )
State tax |  |  | 61,280 |  |  |  | (25,272 | )
Foreign rate differential |  |  | (541,273 | ) |  |  | (626,867 | )
Foreign permanent differences |  |  | 7,395 |  |  |  | (75,612 | )
ASC 740-10 uncertain tax position |  |  | 582,672 |  |  |  | 1,508,213 |
Tax exemption |  |  | (1,397,866 | ) |  |  | (1,504,950 | )
Other |  |  | 138,919 |  |  |  | (31,230 | )
Total |  | $ | 1,071,654 |  |  | $ | 1,460,511 |
The following presents the aggregate dollar and per share effects of the Company’s tax exemption for the years ended December 31, 2012 and 2011:
|  | 2012 |  |  | 2011 |
Aggregate dollar effect of tax exemption |  | $ | 1,397,866 |  |  | $ | 1,504,950 |
Basic EPS impact |  | $ | 0.07 |  |  | $ | 0.10 |
Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred taxes are comprised of the following for the years ended December 31, 2012 and 2011:
|  | 2012 |  |  | 2011 |
Current deferred tax assets |  |  |  |  |  |
Accrued liabilities |  | $ | 157,424 |  |  | $ | 156,974 |
Noncurrent deferred tax assets: |  |  |  |  |  |  |  |
Federal & CA state amortization |  | $ | 8,852 |  |  | $ | 2,213 |
Federal & CA state NOL |  |  | - |  |  |  | 34,849 |
Intercompany payable |  |  | - |  |  |  | 131,521 |
Land use rights |  |  | 7,034 |  |  |  | 7,016 |
PRC fixed asset and amortization |  |  | 643 |  |  |  | 962 |
PRC NOL |  |  | 5,045 |  |  |  | 8,129 |
Noncurrent deferred tax liabilities: |  |  |  |  |  |  |  |
Federal & CA state depreciation |  |  | (35,237 | ) |  |  | (26,425 | )
Purchase accounting |  |  | (17,000 | ) |  |  | (17,000 | )
Prepaid expenses |  |  | (320) |  |  |  | (5,672 | )
PRC depreciation on building |  |  | (9,342 | ) |  |  | (9,319 | )
Net noncurrent deferred tax assets (liabilities) before valuation allowance |  |  | (40,325 | ) |  |  | 126,274 |
Less: valuation allowance |  |  | (5,045 | ) |  |  | (8,130 | )
Non-current deferred tax assets (liabilities), net |  | $ | (45,370 | ) |  | $ | 118,144 |
The Company has recorded a partial valuation allowance against its PRC deferred tax assets for the year ended December 31, 2012 and 2011. In accordance with ASC 740 Accounting for Income Taxes, based on all available evidence, including the Company’s historical results and the forecast of its future income, it is more likely than not that substantially all of its PRC entities will be able to realize the Company’s deferred tax assets. Nova Lifestyle, Inc. and Diamond Bar Outdoors, Inc. are subject to U.S. federal and state income taxes. For U.S. federal income tax purposes, the Company has net operating loss (“NOL”) carryforwards of approximately $0 and $87,000, at December 31, 2012 and 2011, respectively. For U.S. California state income tax purposes, the Company has NOL carryforwards of approximately $0 and $87,000, at December 31, 2012 and 2011, respectively. The NOL carryforwards will expire after 20 years beginning from the year it occurred if not utilized. The Company does not have any NOL carryforwards for PRC enterprise income tax purposes, at December 31, 2012 and 2011 respectively. Nova Dongguan is subject to a 25% PRC corporate tax rate starting from 2009. Nova Macao is an income tax-exempt entity incorporated and domiciled in Macao. Nova Museum is subject to a 25% corporate income tax in 2011, its inception year, but allowed to apply for tax-exempt status in 2012, the second year following its incorporation. Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $13.7 million and $8.7 million as of December 31, 2012 and 2011, respectively. Those earnings are considered to be permanently reinvested and, accordingly, no deferred tax expense is recorded for U.S. federal and state income tax or applicable withholding taxes. Nova Furniture 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 Nova Furniture is domiciled. On August 31, 2011, Nova LifeStyle acquired all the outstanding capital stock of Diamond Bar. Both Nova LifeStyle and Diamond Bar are subject to U.S. corporate income tax.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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