Income Tax

3 Months Ended

Mar. 31, 2012

Income Tax [Abstract]

INCOME TAX

NOTE 6 INCOME TAX

Pre-tax income for the three months ended March 31, 2012 and 2011 was taxable in the following jurisdictions:

	2012			2011
PRC	$	1,767,942		$	2,979,061
Samoa		(64,363	)		292,080
BVI		830,523			(170,842	)
Others		111,964			190,718
	$	2,646,066		$	3,291,017

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”). 

Below is a summary of the income tax rates for each of our PRC subsidiaries in 2011 and 2012.

	Goldenway			New-Tailun			Catch-Luck			LA GO GO			Ever-Glory Apparel			Tai Xin
2011		25.0	%		25.0	%		25.0	%		25.0	%		25.0	%		-	%
2012		25.0	%		25.0	%		25.0	%		25.0	%		25.0	%		25.0	%

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 following table reconciles the PRC statutory rates to the Company’s effective tax rate for the three months ended March 31, 2012 and 2011:

	2012			2011
PRC statutory rate		25.0	%		25.0	%
Non-taxable items		(1.4	)		(2.0	)
Effect of foreign income tax rates		(7.2	)		(0.9	)
Income tax exemption		(0.1	)		(0.1	)
Other		3.5			(1.4	)
Effective income tax rate		19.8	%		20.6	%

Income tax expense for the three months ended March 31, 2012 and 2011 is as follows:

	2012		2011
Current	$	143,104	$	503,834
Deferred		381,752		175,187
Income tax expense	$	524,856	$	679,021