Income Tax

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 9 - INCOME TAX

Pre-tax income for the years ended December 31, 2011 and 2010 was taxable in the following jurisdictions:

	2011		2010
PRC	$	8,603,740	$	5,439,758
Samoa		2,638,417		(38,728)
BVI		255,092		1,516,044
Others		190,000		925,918
	$	11,687,249	$	7,842,992

The company was corporated in Florida and is subject United States (“US”) tax law. It is management’s intention to reinvest all the income attributable to the Company earned by its operations outside the US. Accordingly no US corporate income tax is provided in these consolidated financial statements.

Perfect Dream was incorporated in the British Virgin Islands (BVI), and under the current laws of the BVI dividends and capital gains arising from the Company’s investments in the BVI are not subject to income taxes.

Ever-Glory HK was incorporated in Samoa on September 15, 2009, and under the current laws of Samoa has no liabilities for income tax.

The Company’s operating subsidiaries are governed by the Income Tax Law of the PRC concerning Foreign Investment Enterprises and Foreign Enterprises and various local income tax laws (“the Income Tax Laws”).

Beginning January 1, 2008, the new Enterprise Income Tax (“EIT”) law replaced the old laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises (“FIEs”).

The key changes are:

a.	The new standard EIT rate of 25% replaces the 33% rate applicable to both DES and FIEs, except for High-Tech companies that pay a reduced rate of 15%;
b.	Companies established before March 16, 2007 continue to enjoy tax holiday treatment approved by local governments for a grace period of either the next 5 years, or until the tax holiday term is completed, whichever is sooner.

Below is a summary of the income tax rates for each of our PRC subsidiaries in 2010 and 2011.

	Goldenway			New-Tailun			Catch-Luck			LA GO GO			Ever-Glory Apparel
2010		25.0	%		12.5	%		12.5	%		25.0	%		25.0	%
2011		25.0	%		25.0	%		25.0	%		25.0	%		25.0	%

Income tax expense for the years ended December 31, 2011 and 2010 is as follows:

	2011		2010
Current	$	707,622	$	428,360
Deferred		1,332,624		705,854
Income tax expense	$	2,040,246	$	1,134,214

The following table reconciles the PRC statutory rates to the Company’s effective tax rate for the years ended December 31, 2011 and 2010:

	2011			2010
PRC statutory rate		25.0	%		25.0	%
Non-taxable items		(0.6	)		(4.8	)
Effect of foreign income tax rates		(6.2	)		(4.7	)
Income tax exemption		(0.1	)		(2.0	)
Other		(0.6	)		1.0
Effective income tax rate		17.5	%		14.5	%

At December 31, 2011 and 2010, deferred tax liabilities arise from temporary differences relating to sales and purchase invoices, which, for PRC tax purposesare recorded upon issuance of invoices, and which are recorded upon delivery or shipment for book purposes.