Viewpoints

2020-11-06

Special Rules for One-person Limited Company in China

Special Rules for One-person Limited Company in China   One-person limited liability company as stipulated in the Company Law of the PRC refers to a limited liability company with only one natural person shareholder or legal person shareholder. Since there is only one shareholder in a one-person limited liability company, it is easy for the shareholder to abuse the independent status of corporate legal person and shareholder’s limited liability to evade debts. The Company Law of the PRC sets forth special rules in a separate section to regulate one-person limited liability company accordingly. The details are as follows:   Investment Restriction for Natural Person   One natural person is only allowed to establish a one-person limited liability company, which shall not establish any more one-person limited liability company.   No Shareholders Meeting   Since there is only one shareholder in a one-person limited liability company, it has no shareholders meeting. […]
2020-11-06

Regulations on Retirement Administration in Shanghai

Regulations on Retirement Administration in Shanghai   Retirement policy is of vital interest to almost everyone. In China, retirement policy may vary in some respects in different cities. There is a summary of retirement regulations in Shanghai as following (there is no distinction between household registrations in the following regulations except for the standard of minimum payment years for claiming pension):   Regulations on Retirement   (1)     Retirement age   Gender Identity Statutory Retirement Age Male Cadre/worker 60 Female Cadre 55 Worker 50 Flexible Employment 55   (2)     Identity   The identity standard of a retiree is based on the information in the last labor contract signed with the employer. The retiree shall be identified as cadre if the contract shows “management position”.   (3)  The minimum payment years for claiming pension   Household Registrations Years of Payment Shanghai Residence   a.            The pension insurance has been paid in […]
2020-11-06

Hong Kong and Macao Lawyers Allowed to Practice in 9 Cities of Chinese Mainland

Hong Kong and Macao Lawyers Allowed to Practice in 9 Cities of Chinese Mainland   On 22 October 2020, the General Office of the State Council of the PRC released a circular on the launch of a pilot scheme to allow Hong Kong and Macao lawyers to practice law in nine mainland cities of the Guangdong‑Hong Kong‑Macao Greater Bay Area (GBA), i.e. Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, Zhaoqing. Eligible Hong Kong and Macao practicing lawyers that have passed the lawyer’s practice examination of GBA and obtained the mainland practice qualification may engage in a certain range of mainland legal affairs. The foregoing pilot scheme will be implemented for 3 years starting from 5 October 2020. The main contents of the pilot scheme are as follows:   Conditions for Participation in the Lawyer’s Practice Examination of GBA   (1)  Chinese citizens who are permanent residents of the Hong […]
2020-11-06

China Enhances Protection of Patent Rights

China Enhances Protection of Patent Rights The 22nd session of the 13th Standing Committee of the National People’s Congress of the PRC adopted the decision on amending the Patent Law of the PRC on 17 October 2020. The revised Patent Law will come into force on 1 June 2021. The key amendments to the Patent Law are as follows:   Increase Compensations for Patent Infringement   According to the new Patent Law, the statutory damage is raised to a range of RMB30,000 to RMB5 million when the loss suffered by the patentees, the benefits gained by the infringers or the patent license fees is hard to be calculated. The current range is from RMB10,000 to RMB1 million.   Introduce Punitive Damages   According to the new Patent Law, the court may determine the amount of damage within one to five times the amount calculated based on the loss suffered by […]
2020-10-21

U.S. Individual Foreign Tax Credit Introduction

U.S. Individual Foreign Tax Credit Introduction If you paid or accrued foreign taxes to a foreign country or U.S. possession and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.   You can take the foreign tax as a deduction or claim as a credit to reduce your U.S. taxable income/tax liability. In most cases, it is to your advantage to take foreign income taxes as a tax credit.   You can claim a credit only if your foreign taxes are qualified:   The tax must be imposed on you: you can claim a credit only for foreign taxes that are imposed on you by a foreign country or U.S. possession.   You must have paid or accrued the tax: You could claim a credit only if you paid or accrued the foreign tax […]
2020-10-21

Tax Tips for U.S. New Business Owner

Tax Tips for U.S. New Business Owner   Congratulations! You start a new business in U.S. However, understanding the tax responsibilities that come with starting a business venture is also significant for you as the business owner. This article will give you some tax tips of starting a new business based on IRS resources.   Choose a business structure   The form of business determines which income tax return a business taxpayer needs to file. The most common business structures are:   (1)     Sole proprietorship: An unincorporated business owned by an individual. There is no distinction between the taxpayer and their business. (2)     Partnership: An unincorporated business with ownership shared between two or more people. (3)     Corporation: Also known as a C corporation. It is a separate entity owned by shareholders. (4)     S Corporation: A corporation that elects to pass corporate income, losses, deductions, and credits through to the shareholders. […]
2020-10-21

How to Notify IRS of Your Address Change

How to Notify IRS of Your Address Change   If your address has changed (e.g. moving), you need to notify the IRS to ensure you receive any tax refunds or IRS correspondence. There are several ways to notify the IRS of an address change:   Tax Return   If you change your address before filing your return, enter your new address on your return when you file. When your return is processed, IRS will update our records. Be sure to also notify your return preparer.   Oral Notification   The IRS can be notified by phone or in person. They will need to verify your identity and address. Please have information IRS on file, for example: your full name; your address; your date of birth; your social security number (or individual taxpayer identification number).   By Form   To change your address with the IRS, you may complete a Form […]
2020-10-21

China to Cancel MIIT Approval for Foreign Investment in Telecom Services

China to Cancel MIIT Approval for Foreign Investment in Telecom Services   The State Council of the PRC released a circular on 21 September 2020, which announced that China will cancel requirement for government review on 29 items and delegate power on 4 items.   According to the circular, the first item of government review to be cancelled is the approval for foreign investment in telecom services. In the past, foreign investors shall apply for an approval for foreign investment in telecom services from the Ministry of Industry and Information Technology of the PRC (MIIT) before they are allowed to set up a foreign invested telecom company. The cancellation of this approval will greatly simplify and shorten the process to establish a foreign-invested telecom company. It is really good news to foreign investors who are planning to set up foreign-invested telecom companies in China.   Although the above pre-approval has […]
2020-10-21

U.S. 199A Qualified Business Income Deduction Introduction

U.S. 199A Qualified Business Income Deduction Introduction Many individuals, including owners of businesses operated through sole proprietorships, partnerships, S corporations, trusts and estates may be eligible for a qualified business income deduction, also called the section 199A deduction, for years beginning after December 31.   The deduction allows them to deduct up to 20% of their qualified business income (QBI), plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. Income earned by a C corporation or by providing services as an employee is not eligible for the deduction.   The deduction has two components.   QBI Component. This component of the deduction equals 20% of QBI from a domestic business operated as a sole proprietorship or through a partnership, S corporation, trust or estate. Depending on the taxpayer’s taxable income, the QBI Component is subject to limitations including: (1)     The type of […]
2020-10-21

U.S. Corporation Foreign Tax Credit Introduction

U.S. Corporation Foreign Tax Credit Introduction Domestic corporations that have paid or accrued qualified foreign income taxes to a foreign country or U.S. possession may generally credit those against their U.S. income tax liability on foreign source income.   The goal of the foreign tax credit is to keep a U.S. taxpayer’s worldwide effective tax rate from exceeding the U.S. statutory tax rate, which is accomplished through the foreign tax credit limitation.   You can claim a credit only if your foreign taxes are qualified:   The tax must be imposed on you: you can claim a credit only for foreign taxes that are imposed on you by a foreign country or U.S. possession.   You must have paid or accrued the tax: You could claim a credit only if you paid or accrued the foreign tax to a foreign country or U.S. possession.   Your qualified foreign tax is […]
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