Income Tax

6 Months Ended

Jun. 30, 2013

Income Tax [Abstract]

INCOME TAX

NOTE 7   INCOME TAX

PRC pre-tax income for the three and six months ended June 30, 2013 and 2012, was taxable in the following jurisdictions.

	Three months ended					Six months ended
	June 30,					June 30,
	2013			2012		2013			2012
PRC	$	2,863,460		$	1,582,335	$	5,548,096		$	3,350,278
Samoa		636,295			882,620		1,462,766			1,713,142
BVI		(1,003	)		26,204		(2,318	)		(38,159	)
Others		(3,000	)		181,000		283,918			292,964
	$	3,495,752		$	2,672,159	$	7,292,462		$	5,318,225

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”). 

All PRC subsidiaries are subject to income tax at 25% statutory rate.

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 and has no liabilities for income tax under the current laws of Samoa.

The following table reconciles the PRC statutory rates to the Company’s effective tax rate for the three and six months ended June 30, 2013 and 2012, respectively:

	Three months ended						Six months ended
	June 30,						June 30,
	2013			2012			2013			2012
PRC statutory rate		25.0	%		25.0	%		25.0	%		25.0	%
Non-taxable or non-deductible items		-			(2.3	)		(1.4	)		(1.9	)
Effect of foreign income tax rates		(4.5	)		(8.5	)		(5.0	)		(7.9	)
Other		1.5			(2.2	)		1.7			0.7
Effective income tax rate		22.0	%		12.0	%		20.3	%		15.9	%

Income tax expense for the three and six months ended June 30, 2013 and 2012 is as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2013		2012		2013		2012
Current	$	626,528	$	121,988	$	855,572	$	265,092
Deferred		142,013		199,022		622,600		580,774
Income tax expense	$	768,541	$	321,010	$	1,478,172	$	845,866