AXTI » Topics » Income Taxes

These excerpts taken from the AXTI 10-K filed Jun 17, 2009.

Note 8 - Income taxes

 

Under the existing Income Tax Laws of the PRC, the Company is generally subject to an income tax at an effective rate of 25% on taxable income, which is based on the net income, reported in the statutory financial statements after appropriate tax adjustments.

 

 

 

2008

 

Taxable income

 

$

4,064,718

 

Rate of income tax

 

15

%

 

 

 

 

Total provision for taxes

 

$

609,708

 

 

Value Added Tax

 

VAT on sales and VAT on purchases in China amounted to US$1,574,526 and US$739,479 for the year ended December 31, 2008.

 

Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government. VAT taxes are not impacted by the income tax holiday.

 

Taxes payable at December 31, 2008 consisted of the following:

 

 

 

2008

 

VAT

 

$

-119,662

 

Income tax

 

51,911

 

Others

 

1,985

 

Total taxes payable

 

$

-65,766

 

 

12



 

XILINGOL TONGLI GERMANIUM CO., LTD.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31 2008

 

Note 8 - Income taxes

 

Under the existing Income Tax Laws of the PRC, the Company is generally subject to an income tax at an effective rate of 25% on taxable income, which is based on the net income, reported in the statutory financial statements after appropriate tax adjustments. The company enjoyed favorable rate of income tax 7.5%. refer to Notes 2.

 

 

 

2008

 

Taxable income

 

$

513,884

 

Rate of income tax

 

7.5

%

 

 

 

 

Total provision for taxes

 

$

38,541

 

 

Value Added Tax

 

VAT on sales and VAT on purchases in China amounted to $359,761 and $67,066 for the year ended December 31, 2008.

 

Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government. VAT taxes are not impacted by the income tax holiday.

 

13



 

EMEISHAN HIGH PURE MATERIALS CO., LTD.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31 2008

 

Taxes payable at December 31, 2008 consisted of the following:

 

 

 

2008

 

VAT

 

$

10,616

 

Income tax

 

3,699

 

Others

 

1,755

 

Total taxes payable

 

$

16,070

 

 

Note 8 - Income taxes



 



Under
the
existing Income Tax Laws of the PRC,
the Company is generally subject to an income tax at an effective rate of
25% on taxable income, which is based on the net income, reported in the statutory financial statements after
appropriate tax adjustments.



 





































 



 



2008



 



Taxable income



 



$



4,064,718



 



Rate of income tax



 



15



%



 



 



 



 



Total provision for taxes



 



$



609,708



 




 



Value
Added Tax



 



VAT
on sales and VAT on purchases in China amounted to
US$1,574,526 and US$739,479 for the year ended December 31, 2008.



 



Sales
and purchases are recorded net of VAT collected and paid as the Company acts as
an agent for the government. VAT taxes are not impacted by the income tax
holiday.



 



Taxes
payable at
December 31, 2008
consisted of the following:



 





































 



 



2008



 



VAT



 



$



-119,662



 



Income tax



 



51,911



 



Others



 



1,985



 



Total taxes payable



 



$



-65,766



 




 



12
















 



XILINGOL TONGLI GERMANIUM CO., LTD.



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31 2008



 



Note 8 - Income taxes



 



Under
the
existing Income Tax Laws of the PRC,
the Company is generally subject to an income tax at an effective rate of
25% on taxable income, which is based on the net income, reported in the statutory financial statements after
appropriate tax adjustments.
The company
enjoyed favorable rate of income tax 7.5%. refer to Notes 2.



 





































 



 



2008



 



Taxable income



 



$



513,884



 



Rate of income tax



 



7.5



%



 



 



 



 



Total provision for taxes



 



$



38,541



 




 



Value
Added Tax



 



VAT
on sales and VAT on purchases in China amounted to $
359,761 and $67,066 for the year ended December 31, 2008.



 



Sales
and purchases are recorded net of VAT collected and paid as the Company acts as
an agent for the government. VAT taxes are not impacted by the income tax
holiday.



 



13
















 



EMEISHAN HIGH PURE MATERIALS CO., LTD.



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31 2008



 



Taxes
payable at
December 31, 2008
consisted of the following:



 





































 



 



2008



 



VAT



 



$



10,616



 



Income tax



 



3,699



 



Others



 



1,755



 



Total taxes payable



 



$



16,070



 




 



These excerpts taken from the AXTI 10-Q filed May 11, 2009.

Note 13. Income Taxes

 

In July 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48 (“FIN48”), “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109)” (“SFAS 109”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure, and transition. We adopted FIN 48 effective January 1, 2007. We recognize interest and penalties related to uncertain tax positions in income tax expense. As of March 31, 2009, we do not have any gross unrecognized tax benefits, nor any accrued interest and penalties related to uncertain tax positions. As a result of the implementation of FIN 48, we identified $16.4 million in the liability for unrecognized tax benefits. Of this amount, none was accounted for as a reduction to the January 1, 2007 balance of retained earnings. The amount decreased the tax loss carryforwards in the U.S. which are fully offset by a valuation allowance. We file income tax returns in the U.S. federal, various states and foreign jurisdictions. We have substantially concluded all U.S. federal and state income tax matters through December 31, 2007.

 

Income Taxes

 

We account for income taxes in accordance with SFAS No. 109 (“SFAS 109”), “Accounting for Income Taxes,” which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. SFAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

 

We provide for income taxes based upon the geographic composition of worldwide earnings and tax regulations governing each region, particularly China. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws, particularly in foreign countries such as China.

 

Effective January 1, 2007, we adopted FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109.” See Note 13—“Income Taxes” in the condensed financial statements for additional information.

 

These excerpts taken from the AXTI 10-K filed Mar 31, 2009.

Income Taxes

        We account for income taxes in accordance with SFAS No. 109 ("SFAS 109"), "Accounting for Income Taxes," which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. SFAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

        We provide for income taxes based upon the geographic composition of worldwide earnings and tax regulations governing each region, particularly China. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws, particularly in foreign countries such as China.

        Effective January 1, 2007, we adopted FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109." See Note 13—"Income Taxes" in the consolidated financial statements for additional information.

Income Taxes



        We account for income taxes in accordance with SFAS No. 109 ("SFAS 109"), "Accounting for Income
Taxes,"
which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of
recorded assets and liabilities. SFAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will
not be realized.



        We
provide for income taxes based upon the geographic composition of worldwide earnings and tax regulations governing each region, particularly China. The calculation of tax liabilities
involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws, particularly in foreign countries such as China.



        Effective
January 1, 2007, we adopted FASB Interpretation No. 48 ("FIN 48"), "
Accounting for Uncertainty in Income Taxes—an
interpretation of FASB Statement No. 109
." See Note 13—"Income Taxes" in the consolidated financial statements for additional information.



Income Taxes

        We account for deferred income taxes using the liability method, under which the expected future tax consequences of timing differences between the book and tax basis of assets and liabilities are recognized as deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce net deferred tax assets when management estimates, based on available objective evidence, that it is more likely than not that the future income tax benefit represented by the net deferred tax asset will not be realized.

        We adopted FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109)," on January 1, 2007. FIN 48 is an interpretation of SFAS No. 109 ("SFAS 109"), "Accounting for Income Taxes," and it seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax provision that an entity takes or expects to take in a tax return. Additionally, FIN 48 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. Under FIN 48, an entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. In accordance with our accounting policy, we recognize accrued interests and penalties related to unrecognized tax benefits as a component of income tax expense. The impact on adoption of FIN 48 is more fully described in Note 13.

Income Taxes



        We account for deferred income taxes using the liability method, under which the expected future tax consequences of timing differences
between the book and tax basis of assets and liabilities are recognized as deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce net deferred tax assets
when management estimates, based on available objective evidence, that it is more likely than not that the future income tax benefit represented by the net deferred tax asset will not be realized.



        We
adopted FASB Interpretation No. 48 ("FIN 48"),
"Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement
No. 109),"
on January 1, 2007. FIN 48 is an interpretation of SFAS No. 109 ("SFAS 109"), "Accounting for Income
Taxes,"
and it seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. FIN 48 prescribes
a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax provision that an entity takes or expects to take in a tax return. Additionally,
FIN 48 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. Under FIN 48, an entity may
only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. In accordance with our accounting policy, we recognize accrued interests and penalties related to
unrecognized tax benefits as a component of income tax expense. The impact on adoption of FIN 48 is more fully described in Note 13.



This excerpt taken from the AXTI 10-Q filed Nov 10, 2008.

Income Taxes

 

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” (“SFAS 109”) which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. SFAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

 

We provide for income taxes based upon the geographic composition of worldwide earnings and tax regulations governing each region, particularly China. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws, particularly in foreign countries such as China.  Effective January 1, 2007, we adopted FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109.” See Note 12 — “Income Taxes” in the condensed consolidated financial statements for additional information.

 

This excerpt taken from the AXTI 10-Q filed Aug 11, 2008.

Income Taxes

 

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” (“SFAS 109”) which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. SFAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

 

17



Table of Contents

 

We provide for income taxes based upon the geographic composition of worldwide earnings and tax regulations governing each region, particularly China. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws, particularly in foreign countries such as China.

 

Effective January 1, 2007, we adopted FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109.” See Note 12 — “Income Taxes” in the condensed consolidated financial statements for additional information.

 

This excerpt taken from the AXTI 10-Q filed May 12, 2008.

Income Taxes

 

We account for income taxes in accordance with SFAS No. 109 (“SFAS 109”), “Accounting for Income Taxes,” which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. SFAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

 

We provide for income taxes based upon the geographic composition of worldwide earnings and tax regulations governing each region, particularly China. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws, particularly in foreign countries such as China.

 

Effective January 1, 2007, we adopted FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109.” See Note 12 — “Income Taxes” in the condensed consolidated financial statements for additional information.

 

19



 

These excerpts taken from the AXTI 10-K filed Mar 14, 2008.

Income Taxes

        We account for deferred income taxes using the liability method, under which the expected future tax consequences of timing differences between the book and tax basis of assets and liabilities are recognized as deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce net deferred tax assets when management estimates, based on available objective evidence, that it is more likely than not that the future income tax benefit represented by the net deferred tax asset will not be realized.

        We adopted FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109)," on January 1, 2007. FIN 48 is an interpretation of SFAS No. 109 ("SFAS 109"), "Accounting for Income Taxes," and it seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax provision that an entity takes or expects to take in a tax return. Additionally, FIN 48 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. Under FIN 48, an entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. In accordance with our accounting policy, we recognize accrued interests and penalties related to unrecognized tax benefits as a component of income tax expense. The impact on adoption of FIN 48 is more fully described in Note 13.

Income Taxes



        We account for deferred income taxes using the liability method, under which the expected future tax consequences of timing differences between the book and tax
basis of assets and liabilities are recognized as deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce net deferred tax assets when management estimates,
based on available objective evidence, that it is more likely than not that the future income tax benefit represented by the net deferred tax asset will not be realized.



        We
adopted FASB Interpretation No. 48 ("FIN 48"),
"Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement
No. 109),"
on January 1, 2007. FIN 48 is an interpretation of SFAS No. 109 ("SFAS 109"), "Accounting for Income
Taxes,"
and it seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. FIN 48 prescribes
a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax provision that an entity takes or expects to take in a tax return. Additionally,
FIN 48 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. Under FIN 48, an entity may
only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. In accordance with our accounting policy, we recognize accrued interests and penalties related to
unrecognized tax benefits as a component of income tax expense. The impact on adoption of FIN 48 is more fully described in Note 13.



This excerpt taken from the AXTI 10-Q filed Nov 7, 2007.

Income Taxes

 

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes” (“SFAS 109”), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. SFAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

 

We provide for income taxes based upon the geographic composition of worldwide earnings and tax regulations governing each country, including particularly the People’s Republic of China. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws, particularly in foreign countries such as the People’s Republic of China.

 

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure, and transition. We adopted FIN 48 effective January 1, 2007. We recognize interest and penalties related to uncertain tax positions in income tax expense. As of September 30, 2007, we do not have any gross unrecognized tax benefits, nor any accrued interest and penalties related to uncertain tax positions. As a result of the implementation of FIN 48, we identified $16.4 million in unrecognized tax benefits. This amount decreased the tax loss carryforwards in the U.S. which are fully offset by a valuation allowance. We file income tax returns in the U.S. federal, various states and foreign jurisdictions. We have substantially concluded all U.S. federal and state income tax matters through December 31, 2006.

 

As of the date of the filing of this quarterly report, there have been no material changes to our critical accounting policies and procedures during the three months and nine months ended September 30, 2007 compared to that disclosed in our Annual Report on Form 10K for the fiscal year ended December 31, 2006 filed with the SEC on March 23, 2007 and our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2007 and June 30, 2007 filed with the SEC on May 11, 2007 and August 13, 2007, respectively.

 

19



 

This excerpt taken from the AXTI 10-Q filed Aug 13, 2007.

Income Taxes

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes” (“SFAS 109”), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. SFAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

We provide for income taxes based upon the geographic composition of worldwide earnings and tax regulations governing each country, including particularly the People’s Republic of China. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws, particularly in foreign countries such as the People’s Republic of China.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure, and transition. We adopted FIN 48 effective January 1, 2007. We recognize interest and penalties related to uncertain tax positions in income tax expense. As of June 30, 2007, we do not have any gross unrecognized tax benefits, nor any accrued interest and penalties related to uncertain tax positions. As a result of the implementation of FIN 48, we identified $16.4 million in unrecognized tax benefits. This amount decreased the tax loss carryforwards in the U.S. which are fully offset by a valuation allowance. We file income tax returns in the U.S. federal, various states and foreign jurisdictions. We have substantially concluded all U.S. federal and state income tax matters through December 31, 2006.

18




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