Provision For Income Taxes

3 Months Ended

Nov. 30, 2011

Provision For Income Taxes

Provision For Income Taxes

NOTE 13 – PROVISION FOR INCOME TAXES

Income tax expense for the six months ended November 30, 2011 and 2010 are summarized as follows:

	Six months ended November 30,
	2011			2010
Current – PRC income tax provision	$	130,782		$	109,208
Deferred income tax income		(9,700	)		-
Total	$	121,082		$	109,208

A reconciliation of the expected tax with the actual tax expense is as follows:

	Six months ended November 30,
	2011					2010
	Amount			%		Amount			%
Income before provision for income taxes	$	160,777				$	571,516
Expected PRC income tax expense at statutory tax rate of 25%		40,194		25.0			142,879			25.0
Different tax rate for PRC/Hong Kong local authority		(11,754	)	(7.3	)		(19,795	)		(3.5	)
Expenses not deductible for tax		15,468		9.6			5,659			1.0
Income not subject to tax		-					(16,648	)		(2.9	)
Utilization of tax loss brought forward		(9,380	)	(5.8	)		(2,887	)		(0.5	)
Tax loss not provided for deferred tax		86,554		53.8			-			-
Actual tax expense	$	121,082		75.3		$	109,208			19.1

(i)           All PRC subsidiaries are subject to PRC tax. The provision for PRC income tax is based on a statutory rate of 25% of the assessable income of the PRC subsidiaries as determined in accordance with the relevant income tax rules and regulations of the PRC.

(ii)           VMS and Redtone China did not generate any assessable profits in Hong Kong and therefore are not subject to Hong Kong tax.