Viewpoints from Kaizen
Mainland China and Macau Arrangements on Avoiding Double Taxation and Preventing Tax Evasion Protocol with Respect to Taxes on Income The Fourth Protocol
Mainland China and Macau Arrangements on Avoiding Double Taxation and Preventing Tax Evasion Protocol with Respect to Taxes on Income The Fourth Protocol The fourth protocol to the “Arrangement between the Mainland of China and the Macau Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income” (hereinafter referred to as “The Fourth Protocol”) was signed in Macao on November 28, 2019 and effective from May 14, 2020. The Mainland China and Macao have completed the required domestic legal procedures for the entry into force of The Fourth Protocol. The Fourth Protocol has entered into force on May 14, 2020, but the provisions of Article 6 shall apply to income obtained on or after May 14, 2020, and the provisions of other articles shall apply to the income obtained on or after January 1, 2021. For the […]
Guide to Application for Mainland China-Hong Kong Cross-border License Plate
Guide to Application for Mainland China-Hong Kong Cross-border License Plate With the development of the Guangdong-Hong Kong-Macao Greater Bay Area, the number of ports between Guangdong province and Hong Kong increases a lot. The relevant government authorities of the two places have launched administration measures on the quotas for cross- boundary private cars accordingly. Kaizen hereby summarizes the latest regulations for the application of quota for Hong Kong and Guangdong cross-boundary private cars as follow for your easy reference. HK Cross-boundary Private Cars not using HK-Zhuhai-Macao Bridge (1) Requirements for Investors of foreign Invested Enterprises Foreign investors, investors from Hong Kong and Macao, whose total amount of tax paid in Guangdong province in the previous year meet the following conditions, may apply for quota for Hong Kong cross-boundary private cars: (a) may apply for the first quota if the total amount of tax paid in […]
Classification of Chinese ODI Projects
Classification of Chinese ODI Projects As more and more Chinese enterprises carry out overseas direct investment (ODI), China has updated and released a series of regulations and policies on overseas direct investment of enterprises in recent years. Kaizen has summarized the application procedures and reporting obligations involved in the two articles, Guidelines on the Approval or Filing of ODI by Chinese Enterprises and Reporting Obligations for Chinese ODI Investors. It is crucial for Chinese enterprises that are planning to carry out ODI activities to have a thorough understanding of relevant regulations and policies and prejudge the category and approval tendency of overseas investment projects. Kaizen hereby summarizes the classification of Chinese ODI projects and the relevant regulations for your easy reference. The ODI projects of Chinese enterprises are divided into three categories, i.e. the encouraged category, the restricted category and the prohibited category, in accordance with the Guiding Opinions […]
Guide to Taiwan Other Taxes
Guide to Taiwan Other Taxes Commodity Tax (1) Scope of Taxation Commodities list in the “Commodity Tax Act”, whether manufactured domestically or imported from abroad shall be subject to commodity tax in accordance with this act except as otherwise provided by any other laws. The commodity tax levies depend on the type of goods, and the applicable tax rate or tax amount is also different (non-progressive tax rate). (2) Taxpayers The Commodity Tax is levied when the taxable goods upon departure from a manufacturer’s premises or when the imported taxable goods completed the customs duties payment. The following table shows the scope of taxation and responsible taxpayers under the commodity tax: Scope of Taxation and Taxpayers under Commodity Tax Scope of taxation Taxpayer Exception Commodities manufactured domestically Manufacturer Commodities manufactured under consignment contract Consignee (i.e. manufacturer) If the consignor is a manufacturer of taxable […]
Guide to Taiwan Anti-Tax Avoidance Measures
Guide to Taiwan Anti-Tax Avoidance Measures Introduction In view of many anti-tax avoidance measures have already been placed in the United States, EU countries and many other countries, Taiwan has set anti-tax avoidance measures such as transfer pricing and anti-thin-capitalization in accordance with international regulations. At the same time, the Income Tax Act regarding the addition of “controlled foreign companies” and “actual management offices” has also been passed, and the implementation date is yet to be announced. Transfer Pricing Taiwan referred to the transfer pricing guidelines and related measures of the OECD and the United States and European countries. Formulated and issued “Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm’s-Length Transfer Pricing” (hereinafter referred to as the “TPAS”) as the tax authority to investigate the result of transactions between the parties, whether there is an irregular basis. (1) Legal Basis According to […]
U.S. Taxation of Foreign Investment in Real Estate Related Income
U.S. Taxation of Foreign Investment in Real Estate Related Income Real estate is a tax-driven industry. Foreign investors, nonresident alien, who have purchased real estate property in the U.S. are subject to several tax and filing requirements. You are a nonresident alien, including foreign individuals or foreign business entities, if not meet the resident alien definition. According to the resident alien definition, you are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for the calendar year (January 1-December 31). To meet substantial presence test, you must be physically present in the U.S on at least 183 days during the current year, or 183 days during the 3-year period that includes the current year (at least 31 days) and the 2 years immediately before that. This following content focus on U.S. taxation of real estate held directly by non-resident aliens, especially […]
U.S. Employer Identification Number Guide
U.S. Employer Identification Number Guide The Employer Identification Number (EIN), also known as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number (FTIN), is a unique nine-digit number (for example, 12-3456789) assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for the purposes of identification. EIN just like a Social Security Number (SSN) for your personal identification number. The EIN number allows you to communicate with the Internal Revenue Service (IRS) in the dealing of all the tax matters of your company. You may also need EIN for bank account opening, business license application or other reasons. The EIN is issued by the Internal Revenue Service (IRS) upon application. You can apply for EIN via website, fax or mail. Expedited service is not available. To complete the application, you should prepare the Form SS-4 and submit it with your company’s […]
The Relevant Information about U.S. Corporation Dividends
The Relevant Information about U.S. Corporation Dividends A corporation may subject to double taxation. Specifically, a corporation must file and pay corporate income tax during each taxable year, and the shareholders must pay taxes on any dividends or other distributions during the taxable year when they got them from the corporation. However, the corporation can choose to retain the earnings to finance growth and reasonable needs of the business up to USD 250,000 (USD 150,000 for personal service corporation) to avoid double taxation temporarily. However, if the retain earnings exceed USD250,000 (USD 150,000 for personal service corporation), Accumulated Earnings Tax with tax rate 20% will be added to regular income tax. A dividend is a corporate distribution to a shareholder out of current or accumulated earnings and profits (E&P). Dividends first come from current earnings and profits, then out of accumulated earnings and profits once the former are […]
Taxation on Unrelated Business Income for Non-profit Organizations
Taxation on Unrelated Business Income for Non-profit Organizations Non-profit organizations generally operate for charitable or other beneficial purposes, most income that they receive is exempt from tax under the Internal Revenue Code. However, when tax-exempt non-profits earn income through an activity that is unrelated to their exempt purposes (such as activity that is commercial in nature, like sales of goods) and the activity is “regularly carried on,” the revenue from the activity may be taxable income under IRS rules for “unrelated business income taxation”. Generally, an exempt organization that has $1,000 or more of gross income from an unrelated business must file Form 990-T to IRS. Form 990-T requires the organization to disclose unrelated trade or business income, deductions directly connected with the unrelated business trade or income. An organization with more than one unrelated trade or business should attach separate schedules for each additional trade or business […]
Issues about Hiring Employees in the U.S. Company
Issues about Hiring Employees in the U.S. Company A U.S. employer may sponsor a prospective or current foreign national employee who is inside or outside the United States and who may qualify under one or more of the employment-based (EB) immigrant visa categories. Generally, aliens with extraordinary ability in the sciences, arts, education, business, or athletics; outstanding professors and researchers; professionals with advanced degree or persons with exceptional ability, can apply an employment-related visa (e.g. H1-B, J-1) which allows the employee to work for a particular employer. If you plan to sponsor a foreign employee for a work visa, you’ll need to fill out an Application for Permanent Labor Certification according to the U.S. Citizenship and Immigration Services website and prepare all the necessary supporting documents. Usually, you can get help from an immigration lawyer. An U.S. employer should pay both federal payroll tax and state payroll […]