D-Link 2005 Annual Report Download - page 54
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D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Continued)
(4) According to the ROC Statute for Upgrading Industries, the purchase of machinery, and
expenditures on research and development and training of professional personnel entitle D-
link and its subsidiaries in the ROC to investment tax credits. The capital investments in
high-tech companies, significant emerging strategic industries, and venture capital also
entitle D-link and its subsidiaries in the ROC to shareholders’ investment tax credits. The
total amount of investment tax credit can be deducted from income tax payable over a period
of five years, and the amount of the credit that can be utilized per year is limited to 50% of
the year’s current income tax payable. However, the foregoing limit does not apply to the
last year of the investment tax credit’s expiration period.
As of December 31, 2005, the unused investment tax credits and related expiration dates
were as follows:
Unused investment tax credits Expiration date
$ 10,098 2006
37,209 2007
71,185 2008
40,905 2009
$ 159,397
(5) According to local income tax law, losses of D-Link Europe as assessed by the tax
authorities can be carried forward to offset future years’ taxable profits. As of December
31, 2005, the unused loss carryforwards of D-Link Europe were $267,944 thousand with full
valuation allowance for deferred tax assets.
(6) According to the ROC Income Tax Law, losses of Xtramus Technologies, YCI, DTVCI and
Redsonic Technology Co., Ltd. as assessed by the tax authorities can be carried forward to
offset the future 5 years’ taxable profits. As of December 31, 2005, Xtramus Technologies’,
YCI’s, DTVCI’s, and Redsonic Technology Co., Ltd.’s unused loss carryforwards and
related expiration dates were as follows:
Year Expiry year Amount
2001 (assessed) 2006 $ 12,462
2002 (assessed) 2007 37,889
2003 (reported) 2008 96,146
2004 (reported) 2009 126,453
2005 (estimated) 2010 39,593
$ 312,543
(7) As of the December 31, 2005, the ROC income tax authorities had examined and assessed
the income tax returns of D-Link for all fiscal years through December 31, 2002.