Viewpoints
2020-10-21
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 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 […]
2020-10-21
Taiwan Business Tax and Profit-Seeking Enterprise Income Tax for the Cross-Border E-commerce In the modern age, with the popularization of the internet and mobile technology, purchasing of the services online such as the usage of Cross-Border E-commerce advertisements, purchasing of online games, and videos are getting popular. When there are sales of electronic service to the natural person within the territory of Taiwan, the Cross-Border E-commerce should in accordance with the Articles No. 2-1 of the Value-added and Non-value-added Business Tax Act, the E-commerce shall be the taxpayer of the business tax, has the obligation to pay for the business tax. If the sales target is not the natural person within the territory of Taiwan, the sales person of the E-commerce should in accordance with the Articles No.36 of the Value-added and Non-value-added Business Tax Act. Unless the purchaser is a business entity which computes its tax in accordance […]
2020-10-21
OT Payment During 2020 Chinese National Day Holidays According to the circular of holiday arrangements for the year of 2020 issued by the General Office of the State Council of the PRC, the National Day holidays and Mid-Autumn Festival will start from 1 October to 8 October 2020. The National Day overlaps with the Mid-Autumn Festival on 1 October 2020. How to calculate and pay the overtime wages if an employer arranges overtime work for its employees during the period from 1 October to 8 October? The General Office of the Ministry of Human Resources and Social Security of the PRC has issued a circular on 18 September2020, which has clearly clarified the calculation and payment of overtime wages during the period from 1 October to 8 October. The detailed rules are as follows: The employer shall pay overtime wages at the rate of no less than […]
2020-10-21
Guide to Audit Exemption for Small Companies in Singapore The Singapore Companies (Amendment) Act 2014 brings in the concept of small company, which replaces the exempt private company for purposes of audit exemption. This article considers the features of this new regime and illustrates its application to existing as well as new companies. Small company With the introduction of small company concept, more companies will qualify for audit exemption, thus reducing compliance costs and creating a more business-friendly environment. Paragraph 2 of the Thirteenth Schedule of the amended Companies Act (Cap 50, 2006 Rev Ed) (hereafter the “Thirteenth Schedule”) states that a company is a small company from a particular financial year if: (1) it is a private company throughout the financial year; and (2) it satisfies any 2 of the following criteria (hereafter the “quantitative criteria”) for each of the 2 financial years […]
2020-09-24
U.S. Foreign Investment in Real Property Tax Act (FIRPTA) Introduction The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding. FIRPTA authorized the United States to tax foreign persons on dispositions of U.S. real property interests. A disposition means “disposition” for any purpose of the Internal Revenue Code. This includes but is not limited to a sale or exchange, liquidation, redemption, gift, transfers, etc. Persons purchasing U.S. real property interests (transferees) from foreign persons, certain purchasers’ agents, and settlement officers are required to withhold 15% (10% for dispositions before February 17, 2016) of the amount realized on the disposition (special rules for foreign corporations). In most cases, the transferee/buyer is the withholding agent. If you are the transferee/buyer, you must find out if the transferor is […]
2020-09-24
Liabilities for Breach of Precontract in China Precontract is a contract whereby the parties agree to conclude a contract within a certain period of time in the future. Precontract is quite common in practice. However, it is not stipulated in the General Principles of the Civil Law of the PRC and the Contract Law of the PRC. The provision of precontract has been formally included in the Civil Code of the PRC (hereinafter referred to as the Civil Code), which will come into force on 1 January 2021. According to Article 495 of the Civil Code, if the parties agree to conclude a subscription contract, subscription order, reservation order and so on within a certain period of time in the future, such contracts shall constitute precontracts. Where one party fails to perform the obligation to conclude a precontract as agreed, the other party may request it to bear […]
2020-09-24
Accelerated Expiry of Shareholders’ Capital Contribution in China The shareholders of a China company are allowed to freely agree on the amount of the subscribed capital and term of capital contribution under the subscribed registered capital system as stipulated in the Company Law of the PRC. If the term of capital contribution of the shareholders has not expired, is it possible for the company creditors to ask for the accelerated expiry of shareholders’ capital contribution obligation so as to realize their creditor rights? In judicial practice, the Chinese courts generally do not uphold the claim made by a creditor of the company for accelerated expiry of shareholders’ capital contribution obligation. However, under special circumstances such as the bankruptcy, dissolution of the company or the shareholders maliciously extend the term of capital contribution to avoid fulfilling the capital contribution obligation, the court may consider to uphold the claim for […]
2020-09-01
Bank Account Opening Singapore VS Hong Kong Both Singapore and Hong Kong are world-renowned business centres, attracting global investors with their extremely low tax rates and open business environment. Bank accounts have become one of the most important prerequisites for investors to make investment decisions and operate their businesses. As financial centres, Singapore and Hong Kong are neck and neck. But the global economic situation is complicated, such as money laundering and fraud cases occur frequently, based on the prevention and control of financial risk, and the relevant international financial organizations, in recent years, the Hong Kong companies registry is easier but harder to open an bank account, even if the account being opened successfully or bank existing customers, also frequent gratuitously notified by bank closed the phenomenon of accounts, investors were upset. By contrast, opening a bank account in Singapore is relatively easy and successful, leading many investors […]
2020-09-01
U.S. Individual Capital Loss Deduction When a person sells a capital asset, the sale normally results in a capital gain or loss. Is capital loss deductible in taxpayer’s income tax return? The following will give you a brief introduction to capital loss deductions rule. Firstly, we should figure out some basic concepts. A capital asset includes inherited property or property someone owns for personal use (e.g. cars and home) or as an investment (e.g. stocks and bonds). A capital gain or loss is the difference between the basis and the amount the seller gets when they sell an asset. The basis is usually what the seller paid for the asset. But please note that taxpayers can only deduct capital losses on the sale of investment property but cannot deduct losses on the sale of property they hold for their personal use. Capital gains and losses are classified […]