Viewpoints
2020-11-06
U.S. New York State Individual Withholding Tax Requirements If you are an employer as described in federal Publication 15, Circular E, Employer’s Tax Guide, and you maintain an office or transact business within New York State, whether or not a paying agency is maintained within the state, you must withhold personal income tax. Out-of-state employers who are not incorporated or licensed under New York State law and do not maintain an office or transact business in New York State are not required to withhold New York State, New York City, or Yonkers income taxes on employees who reside in New York State. If an out-of-state employer agrees to withhold New York State, New York City, or Yonkers income taxes for the convenience of the employee, then the employer is subject to New York State withholding requirements. Employers should withhold tax for the following employees: (1) […]
2020-11-06
The Legal Representative of a China Company What is a legal representative in China? According to the Civil Code of the PRC, the legal representative of a legal person refers to the person in charge who conducts civil activities on behalf of the legal person in accordance with the provisions of laws or the bylaws of the legal person. The legal consequences of civil activities conducted by the legal representative in the name of the legal person shall be assumed by the legal person. Any restriction on the legal representative’s right of representation imposed by the bylaws or the supreme organ of the legal person shall not be set up against bona fide apposite parties. Where the legal representative of a legal person causes damages to any other person in the performance of duties, the legal person shall assume civil liability for such damage. The legal […]
2020-11-06
Taxes Payable by Individuals for the Purchase of Housing in China Taxes payable for transfer of the purchased houses by individuals (1) Value added tax (a) Individuals who sells houses bought for less than 2 years shall pay VAT in full at the rate of 5%. (b) Individuals who sells houses bought for more than 2 years (including 2 years) : (ⅰ) Areas outside Beijing, Shanghai, Guangzhou and Shenzhen are exempt from VAT; (ⅱ) In Beijing, Shanghai, Guangzhou and Shenzhen, individuals shall pay VAT at the rate of 5% based on the difference between the sales income and the purchase price of the house. VAT shall be exempt when individuals sale ordinary houses which purchased for more than 2 years (including 2 years). Tax deduction or exemption: (a) Individuals selle self-built houses of own use shall be exempt from VAT; (b) VAT shall […]
2020-11-06
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 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 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 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 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 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 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 […]