D-Link 2005 Annual Report Download - page 52
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D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Continued)
Income tax expense for 2005 and 2004 consisted of the following:
2005 2004
Current $ 444,463 231,740
Deferred 95,174 63,888
Additional 10% surtax on undistributed earnings 102,769 103,052
$ 642,406 398,680
(2) D-Link meets the requirements of a “scientific industry” as prescribed by the Statute for the
Establishment and Administration of the Science Park. Therefore, D-Link is entitled to an
income tax exemption on the profits generated from certain operations over a period of four
or five years. Such operations relate to the expanded operations accompanying the
following capital increases:
Duration of tax exemption
2000 capital increase January 1, 2001 ~ December 31, 2004
2001 capital increase January 1, 2002 ~ December 31, 2005
In accordance with the “Business Mergers and Acquisitions Act”, D-Link separated its
ODM/OEM operations from its D-Link brand business and transferred related operations’
assets and liabilities to establish Alpha on August 16, 2003. The above-mentioned income
tax exemption and other related to ODM/OEM business division tax benefits could be
inherited by Alpha from August 16, 2003.
Alpha’s investment plan to produce high-performance computer systems and browser
terminals conforms to the ROC Statute for Upgrading Industries and is eligible for a tax
benefit. According to the resolution of Alpha’s 2004 shareholders’ meeting, the tax benefit
of shareholders’ investment credit was selected.
(3) The components of deferred income tax assets (liabilities) as of December 31, 2005 and
2004, are summarized as follows: