Note 13 - Provision For Income Taxes

9 Months Ended

Feb. 28, 2013

Notes

Note 13 - Provision For Income Taxes

NOTE 13 – PROVISION FOR INCOME TAXES

Income tax expense for the nine months ended February 28, 2013 and February 29, 2012 are summarized as follows:

	Nine months ended February 28, 2013		Nine months ended February 29, 2012
Current – PRC income tax provision	$	177,211	$	268,147
Deferred income tax income		(10,821)		(20,301)
Total	$	166,390	$	247,846

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

	Nine months ended February 28, 2013		Nine months ended February 29, 2012
Income before provision for income taxes		155,083		506,306
Expected PRC income tax expense at statutory tax rate of 25%	$	38,771	$	126,577
Different tax rate for PRC/Hong Kong local authority		(3,167)		(20,516 )
Expenses not deductible for tax		28,738		37,605
Utilization of tax loss brought forward				(4,335)
Tax loss not provided for deferred tax		102,048		108,515
Actual tax expense	$	166,390	$	247,846

 (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) Hong Kong profits tax is calculated at 16.5% on assessable profits generated during the year/ VMS and Redtone China did not generate any assessable profits in Hong Kong during the nine months ended February 28, 2013 and February 29, 2012, respectively.