Income taxes

9 Months Ended

Sep. 30, 2011

Income taxes

4. Income taxes

United States

The Company is subject to the United States of America Tax law at tax rate of 34%. It has no assessable profit for the three and nine months ended September 30, 2011 and 2010, respectively. The Company has not recognized a deferred tax liability for the undistributed earnings of its non-U.S. subsidiaries as of September 30, 2011 and December 31, 2010 respectively, because the Company currently does not expect those unremitted earnings to distribute and become taxable to the Company in the foreseeable future. A deferred tax liability will be recognized when the Company no longer plans to permanently reinvest undistributed earnings.  Calculation of related unrecognized deferred tax liability is not practicable.

BVI

Omnia BVI was incorporated in the BVI and, under the current laws of the BVI, is not subject to income tax.

PRC

Oriental Fashion is subject to the PRC Enterprise Income Tax (“EIT”). As Oriental Fashion was a wholly-foreign owned enterprise engaged in manufacture industry which was duly approved by the PRC tax authority, it was entitled to two years’ exemption, from the first profit making calendar year of operations after offset of accumulated taxable losses, followed by 50% tax reduction for the immediate next three calendar years. This tax holiday commenced in the fiscal financial year 2007. Oriental Fashion was subject to EIT rate of 12% and 11% during the three and nine months ended September 30, 2011 and 2010 respectively. Oriental Aesthetics was subject to EIT rate of 25% during the three and nine months ended September 30, 2011.

ASC 740 requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. The management evaluated the Company’s tax positions and considered that no provision for uncertainty in income taxes was necessary as of September 30, 2011.