Provision For Income Taxes

12 Months Ended

May 31, 2012

Provision For Income Taxes:

Provision For Income Taxes

NOTE 13 – PROVISION FOR INCOME TAXES

Income tax expense for the year ended May 31, 2012 and 2011 are summarized as follows:

	2012			2011
Current – PRC income tax provision	$	342,507		$	210,383
Deferred income tax income		(12,569	)		(10,305	)
Total	$	329,938		$	200,078

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

	2012						2011
	Amount			%			Amount			%
Income before provision for income taxes	$	587,924					$	849,981
Expected PRC income tax expense at statutory tax rate of 25%		146,981			25.0			212,496			25.0
Different tax rate for PRC/Hong Kong local authority		(27,729	)		(4.7	)		(44,295	)		(5.2	)
Expenses not deductible for tax		60,008			10.2			-			-
Utilization of tax loss brought forward		-			-			(82,187	)		(9.7	)
Tax losses not provided for deferred tax		150,678			25.6			114,064			13.4
Actual tax expense	$	329,938			56.1		$	200,078			23.5

(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.