Note 13- Provision For Income Taxes

12 Months Ended

May 31, 2013

Notes

Note 13- Provision For Income Taxes

NOTE 13 – PROVISION FOR INCOME TAXES

Income tax expense for the year ended May 31, 2013 and 2012 are summarized as follows:

	2013	2012
Current – PRC income tax provision	$299,132	$342,507
Deferred income tax income	(14,452)	(12,569)
Total	$284,680	$329,938

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

	2013		2012
	Amount	%	Amount	%
Income before provision for income taxes	$334,085		$587,924
Expected PRC income tax expense at statutory tax rate of 25%	83,521	25.0	146,981	25.0
Different tax rate for PRC/Hong Kong local authority	18,219	5.4	(27,729)	(4.7)
Expenses not deductible for tax	71,690	21.5	60,008	10.2
Tax losses not provided for deferred tax	111,250	33.3	150,678	25.6
Actual tax expense	$284,680	85.2	$329,938	56.1

(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.