Shenzhen d.light was established in October 2008. Office Address: xx tower, Luohu District. Business Scope：Researching and developing on communication testing equipments and providing the interrelated information consultantion services.The ABC is a wholly-owned subsidiary of a Hong Kong Company and provides research and development, design, after-sales technical services, quality control and other services together with the Hong Kong Company for their headquarters which located in America.The turnover of the second half of 2010, full year of 2011 and the first half of 2012 is more than RMB6 million, RMB15 million, and more than RMB8 million respectively. The accumulative amount of business tax and surcharge is more than RMB1.6 million from the second half of 2010 to the end of June 2012.
After the preliminary negotiation in June 2012, we initially estimated that most of the services which the ABC provide to it parent company belong to the scope of  Konwledge Process Outsourcing Services, and they were applicable to the policy of business tax exemption. 

2.Benefits from our service

More than 90% of the company’s income is applicable to the tax preference policy. The amount of value added tax (business tax) and surcharge was saved almost RMB 1million per annum.

3.Contacts signed:

（1）In July 2012, a contract of special consultant and agent services on offshore service outsourcing tax preference planning was signed; Agent service for tax refund from the Local Tax Bureau from July 2010 to the day the first tax preference obtained.
（2）In Oct 2012, a contract of agent services on tax refund application of qualified company on tax preference was signed;

4.Terminal Products and Business Operation

（1）Terminal Products and technical content of the provided services 
①The headquarters of the company is in America, which is the leader in the area of optical and digital transmission and is committed to be “father of digital solution”. It spares no efforts to develop communication testing instruments to meet the market requirements with lots of human, material and financial support.
②Products and Services: powerful network analysis instrument that integrated by traditional SDH/PDH/DSN testing, EOS testing and Ethernet testing; leading bit error rate instrument; optical testing products like optical time-domain reflectometer, optical spectrum analyzers, optical multi-meter;
③The use of the relevant technology: 3G/LTE - oriented wireless testing technique; general RF/ microwave measurement technique; broad band IP network testing technique.

（2）Organization Structure and Business Operation Condition of Shenzhen Company
Department of Research and Development: Responsible for software development, appearance design, electronic products design, setting-up standards and file generation;
Department of Operation: Responsible for purchasing of research and development materials，arranging the delivering of materials and goods which ordered by oversea companies.
Department of Sales: Responsible for making quotation to clients collecting order information and clients information.
Department of Quality Control: Responsible for material research and development, mould examination; checking on mass production materials and finished products;
Department of Finance: Responsible for entering data to the system which shared with the oversea company and financial matters of Shenzhen Company.
Department of Administration: Responsible for daily administration, salary management and recruitment.

5.The tax preferential policy and changes after Business Tax changing to VAT. (After November 2012)

（1）The zero-rated tax preferential policy: Research and development and design services are applicable to the zero-rated tax preferential policy.  During the purchase procedure, the input VAT can be refunded.
（2）Newly added taxable revenue: The VAT -input from purchase goods and modern services is near RMB200k per annum.