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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2014
INCOME TAXES (Tables) |
Current Taxes | Under the current tax law in the PRC, the Company is and will be subject to the following enterprise income tax rates:
|  | Enterprise Income
Year |  | Tax Rate
2013 |  | 15%
2014 |  | 15%
2015 |  | 15%
2016 |  | 15%
2017 |  | 25%
Thereafter |  | 25%
Provision For Income Taxes | The provision for income taxes consisted of the following:
|  | Year Ended December 31, |
|  | 2014 |  |  | 2013 |
|  | (As restated) |  |  |  |
Current |  | $ | - |  |  | $ | - |
Deferred |  |  | 77,042 |  |  |  | 1,061,413 |
Total income tax expense (benefit) |  | $ | 77,042 |  |  | $ | 1,061,413 |
Schedule of Income Tax Rate Reconciliation | Following is a reconciliation of income taxes calculated at the federal statutory rates to the provision for income taxes:
|  | Years Ended December 31, |
|  | 2014 |  |  | 2013 |
|  | (As restated) |  |  |  |
(Benefit) tax at statutory rate of 25% |  | $ | (9,868,430 | ) |  | $ | (4,736,660 | )
Stock based compensation from current and prior years |  |  | - |  |  |  | 8,534 |
Effect of tax holiday |  |  | 3,906,336 |  |  |  | 1,834,517 |
Other, primarily the difference in U.S. tax rates |  |  | 7,815 |  |  |  | - |
Change in valuation allowance |  |  | 6,031,321 |  |  |  | 3,955,022 |
Income tax expense |  | $ | 77,042 |  |  | $ | 1,061,413 |
Schedule of Deferred Tax Assets and Liabilities | The temporary differences which give rise to the deferred income tax assets and liability are as follows:
|  | December 31, |
|  | 2014 |  |  | 2013 |
|  | (As restated) |  |  |  |
Deferred income tax assets: |  |  |  |  |  |
Allowance for doubtful trade receivables |  | $ | 6,652,118 |  |  | $ | 1,995,243 |
Allowance for doubtful other receivables |  |  | 9,049 |  |  |  | 6,460 |
Inventory obsolescence reserve |  |  | 1,040,107 |  |  |  | 1,501,687 |
Expenses not deductible in current year |  |  | 31,000 |  |  |  | 31,143 |
Deferred revenue |  |  | 377,457 |  |  |  | - |
PRC net operating loss carry forward |  |  | 1,676,852 |  |  |  | 328,643 |
U.S. net operating loss carry forward |  |  | 1,181,679 |  |  |  | 1,052,784 |
Total deferred income tax assets |  |  | 10,968,262 |  |  |  | 4,915,960 |
Valuation allowance |  |  | (10,968,262 | ) |  |  | (4,915,960 | )
Net deferred income tax asset |  | $ | - |  |  | $ | - |

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