12 Taxes

3 Months Ended

Sep. 30, 2015

Notes

12 Taxes

12           TAXES

The Company’s Chinese subsidiaries are governed by the Income Tax Law of the People’s Republic of China concerning private-run enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments.

The reconciliation of income tax at the U.S. statutory rate to the Company’s effective tax rate is as follows:

	For the Quarter ended September 30,
	2015		2014
Tax at U.S. Statutory rate	$	802,282	$	(842)
Tax rate difference between China and U.S.		(604,938)		(3,083,941)
Change in Valuation Allowance		(239,492)		3,084,783
Net operating loss expired		-		-
Stock and option compensation		42,148		-
Effective tax rate	$	-	$	-

The provisions of income taxes (credit) are summarized as follows:

	For the Quarter ended September 30,
	2015		2014
Current	$	-	$	-
Deferred - U.S.				(38,113)
Deferred - China		1,183,295		(3,046,670)
Valuation allowance - U.S.				38,113
Valuation allowance - China.		(239,492)		3,046,670
Total	$	943,803	$	-

The tax effects of temporary differences that give rise to the Company’s net deferred tax asset as of September 30, 2015 and 2015 are as follows: 

	September 30, 2015		June 30, 2015
Net operating loss carryforward - China	$	106,396	$	1,342,696
Net operating loss carryforward - US		1,907,037		1,935,121
Allowance for doubtful accounts		692,605		823,190
Others		958,106		808,334
		3,664,144		4,909,341
Less: valuation allowance- U.S.		(1,907,037)		(1,935,121)
valuation allowance- China.		(22,091)		(262,610)
Deferred tax assets	$	1,735,016	$	2,711,610