Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

INCOME TAXES

v3.8.0.1
INCOME TAXES
12 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
NOTE 18 – INCOME TAXES 
 
 
 
For the year ended September 30,
 
 
 
2017
 
2016
 
2015
 
Provision for income tax for the period
 
$
1,030,858
 
$
1,200,010
 
$
1,053,132
 
Income tax benefit
 
 
(35,853)
 
 
(94,570)
 
 
(101,015)
 
Total
 
$
995,005
 
$
1,105,440
 
$
952,117
 
 
 
 
As of September 30,
 
 
 
2017
 
2016
 
2015
 
Deferred tax assets:
 
 
 
 
 
 
 
 
 
 
Bad debt allowance recorded for accounts receivable
 
$
272,557
 
$
247,227
 
$
152,657
 
Total
 
$
272,557
 
$
247,227
 
$
152,657
 
 
Income taxes for the years ended September 30, 2017, 2016, and 2015 are attributed to the Company’s continuing operations in China and consisted of:
 
 
 
For the year ended September 30,
 
 
 
2017
 
2016
 
2015
 
Current
 
$
1,019,147
 
$
1,209,114
 
$
1,055,883
 
Deferred
 
 
(24,142)
 
 
(103,674)
 
 
(103,766)
 
Total
 
$
995,005
 
$
1,105,440
 
$
952,117
 
 
Per the consolidated statements of operations and comprehensive income, the income tax expenses for the Company can be reconciled to the income before income taxes for the years ended September 30, 2017, 2016 and 2015 as follows:
 
 
 
For the year ended September 30,
 
 
 
2017
 
 
2016
 
 
2015
 
Income before taxes excluded the amounts of loss incurring entities
 
$
7,178,353
 
 
$
6,656,140
 
 
$
6,197,299
 
PRC EIT tax rates
 
 
15
%
 
 
15
%
 
 
15
%
Tax at the PRC EIT tax rates
 
 
1,076,753
 
 
 
998,421
 
 
 
929,595
 
Tax effect of 50% R&D expenses deduction
 
 
(99,833)
 
 
 
97,652
 
 
 
69,621
 
Tax effect of deferred tax recognized
 
 
(24,142)
 
 
 
(103,673)
 
 
 
(103,766)
 
Tax effect of non-deductible expenses
 
 
42,227
 
 
 
113,040
 
 
 
56,667
 
Income tax expenses
 
$
995,005
 
 
$
1,105,440
 
 
$
952,117
 
 
Under the Law of the People's Republic of China on Enterprise Income Tax ("New EIT Law"), which was effective from January 1, 2008, both domestically- owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%.
 
Zhejiang Zhengkang was entitled High and New Technology Enterprise ("HNTE") and enjoyed preferential tax rate of 15% for a three-year validity period from April 16, 2009. And the HNTE certificate was renewed on October 29, 2012 and September 17, 2015, both with a three-year validity period respectively. Thus, Zhejiang Zhengkang is eligible for a 15% preferential tax rate from April 16, 2009 to September 16, 2018.
 
ZK International is not subject to income taxes under the current laws of BVI. ZK Pipe was registered in Hong Kong and is subject to corporate income tax at 16.5% if revenue is generated in Hong Kong.  Wenzhou Zhengfeng and Wenzhou Weijia were both registered in the PRC and have applicable EIT rate of 25%.