INCOME TAX

12 Months Ended

Dec. 31, 2012

INCOME TAX [Text Block]

Note 8 - INCOME TAX

The Company accounts for income taxes pursuant to the standard, “Accounting for Income Taxes”, codified with ASC 740, which requires recognition of deferred income tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns.

Prior to January 1, 2008, the Company was governed by the Income Tax Law of the People’s Republic of China concerning Foreign Investment Enterprises and Foreign Enterprises and local income tax laws (“the previous income tax laws and rules”). Pursuant to the previous income tax laws and rules, wholly-owned foreign enterprises were subject to tax at a statutory rate of 33% ( 30% state income tax plus 3% local income tax).

In March 2007, the Chinese government enacted the Corporate Income Tax Law, and promulgated related regulations, which were effective January 1, 2008. The Corporate Income Tax Law, among other things, imposes a unified income tax rate of 25% for both domestic and foreign invested enterprises. The previous income tax laws and rules, which stipulated income tax rates for domestic and foreign invested enterprises at different rates, expired upon the effectiveness of the Corporate Income Tax Law.

Due to the Company’s net loss, there was no provision for income taxes. The Company’s effective tax rate for the years ended December 31, 2012 and 2011 was 0% and 0% due to the net loss position in both years.

The Company’s taxes were subject to a full valuation allowance as follows:

		For the Year Ended			For the Year Ended
		December 31, 2012			December 31, 2011
Computed tax benefit at statutory rate	$	(27,645	)	$	(22,788	)
Change in valuation allowance		27,645			22,788
Income tax expense (benefit)	$	-		$	-

The net deferred tax asset generated by the loss carry-forward has been fully reserved.

The tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises have completed their relevant tax filings, hence the Company’s tax filings may not be finalized. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings which may lead to additional tax liabilities.

The Company has no United States corporate income tax liability as of December 31, 2012 and 2011.