Income Tax

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Abstract]

Income Tax

13. INCOME TAX

The Company’s operating subsidiary, Guangzhou Tanke, is a “domestic enterprise” that is registered and operated in Guangzhou, the PRC. Income tax expense for the six months ended June 30, 2012 and 2011 of $430,198 and $320,308 respectively, represents the provision for current income tax expenses in the PRC.  The statutory income tax rate in PRC is 25%.

Tanke Bio-Tech, a subsidiary of Guangzhou Tanke, is a joint venture with a foreign entity that received a full exemption from income taxes in 2007 and 2008 and half rate reduction (12.5%) for years 2009, 2010 and 2011 in accordance with the Law of the People's Republic of China on Income Tax of Enterprises with Foreign Investment and Foreign Enterprises and Notification of the State Council on Carrying out the Transitional Preferential Policies concerning Enterprise Income Tax (Guofa (2007) No. 39). Beginning in 2012, Tanke Bio-Tech starts benefiting from a different reduced tax rate of 15% due to its status of an official new, high-tech company.

As of June 30, 2012 and December 31, 2011, the income tax payable for the Company amounted to $1,476,642 and $1,216,841, respectively.  All of the Company’s U.S. net operating loss carry forward was fully reserved.

Significant components of the Company’s deferred tax asset are as follows.

	June 30,		December 31,
	2012		2011
Deferred tax asset
Allowance for doubtful accounts	$	46,532	$	46,042