Deswell Industries (DSWL) Message Board

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Technology Stocks : Deswell Industries (DSWL)

DSWL 3.630

-1.6%

12:53 PM EST

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To: David Seltzer who wrote (656)	4/16/1998 1:44:00 PM
From: kolo55	Read Replies (1) of 1418

Change in tax rate? Good question. This is one reason the After-tax margins are so good. We had an active discussion on the thread about this early on. From what I have found out, as long as Deswell is actively investing money in new plants and equipment, the tax rate should remain low. I'm not sure exactly how it works, but it seems that Deswell can take a deduction against their taxable income equal to new investments, i.e. they don't get taxed on profits if they reinvest the profits. And the rate on the final adjusted taxable income is less than 10%. I may have this all garbled, so if someone on the thread is expert on these tax laws, please chime in. I think Mexico has a similar arrangement (this may be one of the big factors driving international ECM companies to invest in Mexico since NAFTA), and I believe this arrangement is not uncommon for developing countries. Paul

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