Viewpoints
2020-02-27
Hong Kong Taxation The HKSAR Government Proposes to Reduce the Profits Tax for the Year of Assessment 2019/20 On 26 February 2020, the Financial Secretary of Hong Kong, Mr. Paul Chan Mo-po, delivered 2020/2021 Budget. He proposed a one-off reduction of profits tax for the year of assessment 2019/20 by 100%, subject to a ceiling of HK$20,000 per case. This concessionary measure is applicable for the profits tax for the year of assessment 2019/20, that is, for the accounting year ended within the period from 1 April 2019 to 31 March 2020. No additional application for this proposed concessionary measure is required. Taxpayers should file their profits tax returns as usual. Although this proposed concessionary measure is subject to review and approval by the Legislative Council of Hong Kong, it will generally be adopted based on experience. 1. Hong Kong’s Tax System Hong Kong adopts a territorial source principle of […]
2020-02-24
February 23, 2020 China Taxation Analysis of Preferential Policies for Shenzhen Enterprises during the Epidemic Updated to February 2020 Since the outbreak of the “Novel Coronavirus Pneumonia” (hereinafter referred to as NCP) in China, the central and local governments have issued a series of policies aimed at easing the difficulties and burdens of enterprises. For the preferential policies generally enjoyed by small and medium-sized enterprises in Shenzhen, Kaizen sorted out the important contents that enterprises should pay attention to and deal with promptly in the near future and hereby listed below for your reference. I. Reduction or Exemption of Property Rent Non-state-owned enterprises, scientific research institutions, medical institutions and individual industrial and commercial households that lease the properties (including factory buildings, innovation industrial buildings, office buildings, agricultural products wholesale markets, commercial shops, storage and logistics facilities and supporting service buildings) owned by municipal and district governments and district-owned, stated-owned enterprises […]
2020-01-13
Comparison of Taiwan Branch and Subsidiary When a foreign company decides to set up an operation in Taiwan to carry out business activities, it could choose either a limited liability company (or a company limited by shares) or a branch office. A limited liability company is a separate legal entity independent from its parent company, whereas a branch office is merely an extension of the operation of the head office. This article introduces briefly the difference between a limited liability company and a branch office in Taiwan. 1. Definition and Main Differences Between a Branch and a Subsidiary A subsidiary is incorporated pursuant to the Company Act and is an independent legal entity. A subsidiary can be listed in the stock market and is entitled to various tax incentives. When a subsidiary distributes dividends to its foreign shareholders, it is subject to 20% withholding tax. A branch is also incorporated […]
2020-01-10
China Taxation Guidance on Annual Individual Income Tax Declaration for Fiscal Year of 2019 in China
December 2019 China Taxation Guidance on Annual Individual Income Tax Declaration for Fiscal Year of 2019 in China On December 31, 2019 China’s State Administration of Taxation issued the “Announcement of Annual Individual Income Tax Declaration for Comprehensive Individual Income for fiscal year of 2019”, which provides detailed guidance for handling the annual individual income tax declaration for fiscal year of 2019. We have sorted out the main content of this announcement as following for your reference. In accordance with the provisions of the Individual Income Tax Law, by the end of fiscal year of 2019, individual residents need to aggregate four types of income, including “Wages and Salaries”, “Labor Remuneration”, “Author’s Remuneration”, and “Royalties” (hereinafter refer to as “Comprehensive Income”), and deduct RMB60,000 expense, special deductions, special additional deductions and other deductions determined by the laws for the period of 01.01.2019 – 31.12.2019; then multiply with the applicable tax […]
2019-12-11
With two offshore company types available in Seychelles, this is a very important question. Here are some general considerations. By no means they represent the final and absolute recommendation but may prove useful as a general guideline. Special License Company (CSL) The CSL would be the preferred choice for clients planning business transactions with counterparties who are located in high-tax countries with an intrusive regulatory environment. In such countries, fiscal countermeasures are possible against the traditional zero-tax companies (IBCs), but are less likely against low-tax companies (CSLs). On the same note, if the business circumstances require proving that the company is actually a taxpayer in its country of registration, only a Special License Company would satisfy this condition. The CSL is also the right vehicle if clients expect to utilize the benefits of the double-tax avoidance treaties, concluded by Seychelles. In perspective, a CSL is the appropriate choice when it`s […]
2019-12-11
Wholly Foreign Owned Company (WFOE) 1. Status Such a company is independent legal entity registered with only foreign capital in China and under Chinese law. The managing director (if only one director is appointed) or Board of directors and legal representative are appointed by the foreign parent company. The WFOE abides by the Chinese company law and regulations like any other Chinese company. 2. Legal liability The WFOE is liable to its assets like a limited liability company in Western legal practice. The minimum capital to be registered is usually around USD120,000. In some cities and for some industries, however, the minimum capital required could be as low as USD12,000. 3. Commercial Activity Chinese corporate law restricts companies to their business scope, i.e. the range of business activities it can perform. A WFOE is also restricted in such a way. The business scope of a WFOE is usually restricted to […]
2019-12-11
Read: Value-Added Tax in China for 2019 (1) Life Services — Culture and Fitness Services 57 Cultural Service Variety of services provided to meet the needs of the public cultural life. Including literary and artistic creation, artistic performances, cultural competitions, lending of library books and materials, archives management, protection of cultural relics and intangible heritage, organization of religious activities, scientific and technological activities, cultural activities, and tourist sites provided. 6% 58 Fitness Service Services provided to organize and hold sports competitions, performances and activities, and to provide sports training, guidance and management. 6% No. Taxable Items Tax Rate Life Services — Culture and Fitness Services (Continue) 59 Education Service Business activities for providing academic education services, non-academic education services and educational auxiliary services. Academic education services provided to recruit students and organize education planning according to the confirmation or approval of Educational Administration Department, and to issue the corresponding certificates, including […]
2019-12-11
Value-added Tax Rate IN CHINA Effective from April 1,2019 For the different taxable items of China’s value-added tax (VAT) and different types of taxpayers, we classify the VAT rate into the following four categories and list the taxable items of the four categories and the corresponding tax rates respectively. 1. VAT rate applicable to VAT general taxpayers for sales or import of goods, sales of taxable services. 2. VAT rate applicable to all taxpayers for export of goods, services or intangible assets. 3. VAT deducted rate applicable to VAT general taxpayers for purchase of agricultural products. 4. VAT leviable rate applicable to small-scale taxpayers or VAT general taxpayers who allowed to use the simple tax computation method. Category Taxpayer Taxable Items Tax Rate / Leviable Rate / Deduction Rate 1 VAT general taxpayers Sales or import of goods, sales of taxable services Trading/import or export, traffic and transit services, postal […]
2019-12-11
The principal forms of business entities available to foreign investors in Shanghai are:- (1) Foreign Investment Enterprises (a) Equity Joint Venture (EJV) (b) Cooperative Joint Venture (CJV) (c) Wholly Owned Foreign Enterprise (WOFE) (2) Foreign Enterprises (a) Representative office (RO) (b) Branches of Foreign Enterprise (c) Enterprises other than those listed above that have establishments or places of business in China and engage in production or business operations, e.g. factory, places for exploitation of natural resources, contracted project sites. Laws and Regulations Relating to Formation of Business Entities When choosing among different forms of business entities, it should be noted that not all types of entities are available for all kinds of industries. The formation, organization, management of most of these entities are governed by their respective laws and regulations, which are special laws relating to the particular form of business entities in question. In 1994, the first company law […]
2019-12-11
The Regulations of Beijing Municipality on the Confirming of the New-Technology Enterprises Beijing Municipal Science and Technology Commission (December 1998) 1. These regulations are formulated for the purpose of promoting the development of high- and new-technology industries in and strengthening the confirming of new-technology enterprises in Beijing Municipality in accordance with No. 47 Document (1988) of the People¡¦s Government of Beijing Municipality and the relevant regulations issued by the Ministry of Science and Technology (originally called the State Science and Technology Commission). 2. These regulations are applicable to all the new-technology enterprises set up in the administrative territory of Beijing Municipality. 3. The Beijing Municipal Science and Technology Commission (BMSTC) is the department of the People¡¦s Government of Beijing Municipality taking charge of the examination and approval of new-technology enterprises as well as implementation of these regulations. 4. The scope of new technologies and the products thereof are as follows […]