Viewpoints
2020-07-02
Introduction to Corporate/LLC Income Tax in United States According to 2017 Tax Cuts and Jobs Act, United States adopts combined worldwide taxation and new territorial-style tax system. Worldwide taxation means income accruing in and outside of United States are subject to United State income tax. Under a worldwide tax system, secondary jurisdiction over foreign-source income exists. If the tax in the foreign country is lower than the tax rate in the residence country, residual tax will be imposed. If the tax rate in the foreign country is higher than the tax rate in the residence country, the corporate will pay the higher foreign tax rate and get a credit for foreign-source income in the future. New territorial-style tax system means U.S. corporations that own 10% or more of a foreign corporation can take 100% dividend received deduction on dividends paid out of foreign-source earnings but cannot have […]
2020-07-02
C Corporations vs. S Corporations Many investors are interested in C Corporations and S Corporations. The following will discuss about the differences between them in terms of formation and taxation. C Corporations vs. S Corporations: Formation The C Corporation is the default corporation under Internal Revenue Service (IRS) rules. A C Corporation can elect to be taxed as an S Corporation by filing Form 2553 with the IRS. Please note while most states follow the federal S Corporations election, some jurisdictions do not recognize the S Corporations (e.g. New York City) or require separate state elections (e.g. New York State, State of New Jersey). To obtain S Corporation tax status for a certain year, you should complete the Form 2553 no more than 2 months and 15 days after the beginning of the tax year the election is to take effect, or at any time during […]
2020-07-02
Differences Between Corporation and LLC Corporations and limited liability companies (LLCs) are the most prevalent business forms when foreign investors considering investment in U.S. Both corporations and LLCs have a statutory right to exist perpetually. The shareholders of a corporation and the members of an LLC are not personally liable for the debts, obligations and liabilities of the entity. However, corporations and LLCs have specific characteristics that must be considered carefully because they may be an advantage to certain investors but not to others. Management Corporations have mandatory centralized management. Control of the business and affairs of the corporation is vested in the corporation’s board of directors, and the shareholders are generally not involved in the day-to-day management of the affairs of the corporation. However, shareholders’ approval is required for certain significant transactions such as mergers. On the other hand, an LLC has a flexible […]
2020-07-02
Required Business Insurances in New York State Insurance is an essential tool of risk management and helps employers reduce the financial burdens of possible losses. The following will introduce three basic insurances in New York State for businesses. Business Liability Insurance Business liability insurance is not mandatory in New York State, but it can protect your business from financial losses resulting from various claims, including bodily injury, property damage, personal injury, advertising injury and others caused by your business operation. And landlords may require you to maintain a certain level of liability coverage as a condition of your lease. The premiums are typically based on the level of the coverage, the nature of the business, the number of employees, the location of operation, etc. Workers’ Compensation and Disability Insurance In New York State, employers are required to obtain and keep in effect workers’ compensation […]
2020-07-02
Taxation for LLC A Limited Liability Company (LLC) is a business structure allowed by state statute, but IRS does not recognize LLC on tax purpose. The IRS treats an LLC as either a partnership, or a corporation depending on the number of members and elections made by the LLC. For income tax purpose, a single member LLC is treated as a sole proprietor by default. In this case, the LLC does not need to pay income taxes or file a tax return with the IRS. The LLC’s net income, income, and expenses items are reported on the member’s personal tax return (assume the member is individual). A domestic LLC with at least two members is classified as a partnership for federal income tax purposes by default. As a pass-through entity, an LLC needs to file tax return for the business, but does not pay entity-level taxes on its income; […]
2020-07-01
FATCA Reporting for U.S. Taxpayers The Foreign Account Tax Compliance Act (FATCA) is an important development in U.S. efforts to combat tax evasion by U.S. persons holding accounts and other financial assets offshore. Under FATCA, certain U.S. taxpayers, holding specific financial assets outside the United States and meeting the reporting threshold, must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. Definition of Certain U.S. Taxpayers You are a U.S. taxpayers regulated by FATCA if you are one of the following: Specified individuals include U.S citizens, resident aliens, and certain non-resident aliens. Specified domestic entities include certain domestic corporations, partnerships, and trusts. Specific Foreign Financial Assets Specified foreign financial assets include foreign financial accounts and foreign non-account assets held for investment (as opposed to held for use in a trade or business), such as foreign stock and securities, foreign […]
2020-07-01
Guide to Starting A Private Educational Institution Business in Singapore As a country whose natural resource is only its people, Singapore has a world-class and widely appreciated education system. The public schools are increasingly becoming popular among immigrants, the Ministry of Education conducts an annual admissions exercise during September/October for new international students who wish to join the public schools. International students need to apply for a Student’s Pass in order for them to study in Singapore. Besides public schools, there are lots of private or foreign-system schools set up their campus in Singapore, they offer a curriculum similar to the kid’s home country, which is also welcomed by immigrants. For example, Singapore’s top local schools ACS International, Hwa Chong International and SJI International, established their own international schools by offering secondary and post-secondary education. Private School in Singapore Singapore has established Private Education Act which required […]
2020-06-23
Tax Guide to Taiwan Share Transfer Unless specified, all companies in this Guide refer to those that established with accordance to Taiwan’s Company Act. Including both limited companies and companies limited by shares. According to Taiwan’s Company Act, Securities Exchange Act, Security Exchange Tax Regulation, Business Tax Law and Income Tax Act, different taxes are levied on the transfer of shares due to the difference in the identification of the owners and the objectives of the transaction. This Guide, therefore, provides a brief explanation of tax liability incurred during the transfer of shares. Since 1st January 2016, income tax is no longer charged on securities transactions income made by individuals. Instead, any certified stock transferred by individuals is charged with securities transactions tax at 0.3% of the gross proceeds, rather than securities transactions income tax. Meantime, stamp duty is not imposed in this activity. In comparison, […]
2020-06-18
China Releases Strict Administration Rules on Financial Leasing Companies China Banking and Insurance Regulatory Commission has just released the Interim Measures for Supervision and Administration of Financial Leasing Companies (hereinafter referred to as the Measures) on 9 June 2020. The Measures consist of six chapters and 55 articles. The following contents of the Measures have attracted much attention of the insiders. Sort out the Existing Financial Leasing Companies The financial leasing companies will be divided into three categories, i.e. normal operation category, abnormal operation category and illegal operation category. The abnormal operation category mainly refers to the financial leasing companies with abnormal operations such as lost contact and empty shell. Lost contact refers to a financial leasing company meeting one of the following conditions: (1) cannot be contacted; (2) cannot be found at its registered address; (3) although the staff of the company can be contacted, […]
2020-06-18
Hainan Free Trade Port VS Shanghai Free Trade Zone At the celebration of the 30th anniversary of Hainan Special Economic Zone, the Party Central Committee has decided to support Hainan in building a pilot free trade zone across the island, and to support Hainan in gradually exploring and steadily promoting the construction of a free trade port with Chinese characteristics. On June 1, the General plan for the construction of Hainan free trade port was released, and the construction of Hainan free trade port officially kicked off. The plan shows China’s will and determination to comprehensively deepen reform and opening up in the new era. Since its release at the beginning of the month, it has attracted wide attention from all parties. So what are the highlights and signals of the plan? The plan comprehensively expounds the construction of Hainan free trade port from the following four aspects: General […]