Consumer Capital Group, Inc.

NOTE 17 - TAXATION

United States

Consumer Capital Group Inc. was incorporated in United States, and is subject to corporate income tax rate of 34%.

The People's Republic of China (PRC)

Arki Beijing Ecommerce Technology Corp. was incorporated in the People’s Republic of China and subject to PRC income tax at 25%. The Company did not generate taxable income in the People’s Republic of China for the years ended 31, 2016 and 2015 respectively.

America Pine Beijing BioTech, Inc. was incorporated in the People’s Republic of China and subject to PRC income tax at 25%. The Company did not generate taxable income in the People’s Republic of China for the years ended 31, 2016 and 2015 respectively

America Arki (Fuxin) Network Management Co. Ltd. was incorporated in the People’s Republic of China and subject to PRC income tax at 25%. The Company did not generate taxable income in the People’s Republic of China for the years ended December 31, 2016 and 2015 respectively

America Arki Network Service Beijing Co. Ltd. was incorporated in the People’s Republic of China and subject to PRC income tax at 25%. The Company did not generate taxable income in the People’s Republic of China for the years ended December 31, 2016 and 2015 respectively.

Yin Hang Financial Information Service (Shanghai) Co., Limited was incorporated in the People’s Republic of China and subject to PRC income tax at 25%. The Company did not generate taxable income in the People’s Republic of China for the period from December 1, 2016 (date of acquisition) to December 31, 2016.

America Arki (Tianjin) Capital Management Partnership was incorporated in the People’s Republic of China and subject to PRC income tax at 25%. The Company did not generate taxable income in the People’s Republic of China for the years ended December 31, 2016 and period from October 22, 2015 (date of inception) to December 31, 2015.

Beginning January 1, 2008, the new Enterprise Income Tax (“EIT”) law has replaced the old laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises (“FIEs”). The new standard EIT rate of 25% replaces the 33% rate applicable to both DES and FIEs.

The new EIT Law also imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. Such withholding income tax was exempted under the previous income tax regulations.

A reconciliation between the income tax computed at the U.S. statutory rate and the Company's provision for income tax in the PRC is as follows:

	For the year ended December 31,
	2016			2015
Tax expense at statutory rate - US		34	%		34	%
Foreign income not recognized in the U.S.		(34	)%		(34	)%
PRC enterprise income tax rate		25	%		25	%
Changes in valuation allowance and others		(15.95	)%		(25	)%
Effective income tax rates		9.05	%		-

Income(Loss) before income taxes from continuing operations consists of:

	For the year ended December 31,
	2016			2015

Non-PRC (including bargain purchase gain on Yin Hang in 2016)	$	1,535,148		$	14,590
PRC		(671,333	)		(735,650	)
	$	863,815		$	(721,060	)

The components of the income tax provision from continuing operations are as follows:

	For the year ended December 31,
	2016		2015
Current taxes	$	-	$	-
Deferred taxes		78,199		-
Income tax expense	$	78,199	$	-

The principal components of the Company’s deferred income tax assets and liabilities are as follows:

	As of December 31,
	2016		2015
Deferred tax assets:
Accrued interest payable	$	23,089	$	-
Accruals		34,409		-
	$	57,498	$	-

	As of December 31,
	2016			2015
Deferred tax liabilities:
Accrued interest receivable	$	(57,026	)	$	-
Accrued interest payable		(78,691	)		-
	$	(135,717	)	$	-

As of December 31, 2016 and 2015, the Company has a deferred tax asset of $57,498 and nil, and a deferred tax liability of $135,717 and nil resulting from certain net operating losses in PRC, respectively. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those net operating losses are available. The Company considers projected future taxable income and tax planning strategies in making its assessment. At present, the Company does not have a sufficient operation in the Arki Beijing, America Pine Beijing, Arki Fuxin, Arki Network Sercive, Arki Tianjin and Yin Hang to conclude that it is more-likely-than-not that the Company will be able to realize all of its tax benefits in the near future and therefore a valuation allowance has been provided for the full value of the deferred tax asset. A valuation allowance will be maintained until sufficient positive evidence exists to support the reversal of any portion or all of the valuation allowance. Should Arki Beijing, America Pine Beijing, Arki Fuxin, Arki Network Sercive, Arki Tianjin and Yin Hang start to have sufficient operation in future periods with supportable trend; the valuation allowance will be reduced accordingly. As of December 31, 2016 and 2015, the valuation allowance was nil and nil, respectively. Nil and nil of increase in the valuation allowance for each of the years ended December 31, 2016 and 2015, respectively.

The components of deferred taxes are as follows from continuing operations at December 31, 2016 and 2015:

	As of December 31,
	2016			2015

Deferred tax asset from net operating loss and carry-forwards	$	72,872		$	-
Valuation allowance		(15,374	)		-
Deferred tax assets, net	$	57,498		$	-

Taxes payable consisted of the following:

	As of December 31,
	2016		2015
Income tax payable	$	179,808	$	-
Other taxes payable		171,906		-
Total taxes payable	$	351,714	$	-