Shanghai Expo 2010: The UK Pavilion

The 2010 World Exposition in Shanghai will be the first registered one in a developing country. Officially known as “Expo Shanghai 2010,” it will last 184 days and provide China an opportunity to show off its remarkable economic growth. The expo will also give foreign nations and companies a chance to further develop business partnerships with China and Chinese companies. This is the eleventh in an ongoing series that will look at the upcoming expo, from country pavilions to trade development. In this article, we take a look at the UK Pavilion. Read the rest of this entry »

Triggering Permanent Establishment In China Representative Offices

China-derived income key to understanding potential tax liabilities

By Chris Devonshire-Ellis

Mar. 12 – The recent rulings by the State Administration of Tax concerning the taxable income of representative offices in China highlights an important status position in the activities of the RO – and the question of whether an RO is in fact operating as a permanent establishment or not. The issue has wide reaching implications, as it brings many ROs into PE status and signals a clampdown by the SAT on certain activities by them. Read the rest of this entry »

AmCham South China releases Special Report on the State of the Business in China

GUANGZHOU, March 12 – The American Chamber of Commerce in South China launched its 2010 special report on the state of the business in South China and a white paper on the business environment in China yesterday.

The special report details the results of a study conducted by AmCham South China among their members from December to February 2010, with the aim of reporting the pulse of the current economic situation. It also presents an in-depth economic overview of the Guangdong, Fujian, Guangxi, Hainan, Hong Kong and Macau provided by the foreign investment consulting firm Dezan Shira & Associates. Read the rest of this entry »

China’s CPI Rise Stokes Inflation Fears

Mar. 12 – China’s consumer price index in February rose at its fastest clip in 15 months, putting pressure on the government to tighten monetary policy.

A key gauge of inflation, the country’s CPI last month grew by a stronger than expected 2.7 percent year-on-year, up still from the 1.5 percent increase experienced in January.
Food prices rose 6.2 percent last month, with non-food prices rising one percent from a year earlier. This is partly due to the Lunar New Year holiday falling in February this year, a time when Chinese spend a lot of money on food, alcohol, cigarettes and gifts. Severe weather conditions also drove up food prices. Read the rest of this entry »

SAT Clarifies Implementation Issues for Corporate Income Tax

Mar. 12 – On February 22, the State Administration of Taxation published Circular 79 in an effort to clarify certain technical issues for corporate income tax purposes including the timing of income recognition, tax treatments for certain expenses, and the determination of tax basis for fixed assets.

This clarification relates tax treatment for expenses including those related to tax-exempt income, start-up expenses and business entertainment expenses. Read the rest of this entry »

China’s Foreign Trade up 45 Percent in February

Mar. 11 – China’s exports grew for the third straight month in February to US$94.52 billion, up from 45.7 percent year-on-year, indicating a rebound in global demand.

Imports also increased according to statistics released by the General Administration of Customs on Wednesday, rising 44.7 percent to US$86.91 billion. Exports grew 8.2 percent compared with the same month in 2008 before the global financial crisis, while imports increased 9.8 percent. Read the rest of this entry »

China to Fine-Tune its Stimulus Plan

Mar. 11 – China will reform the RMB exchange rate in a gradual and controlled manner and Chinese economic stimulus plans will be continuously implemented but fine-tuned, China’s Minister of Commerce Chen Deming said before the National People’s Congress on March 8.

Chen explained that all of China’s current financial policies, including the policy of the RMB exchange rate, are the ones adopted during the global financial crisis to stimulate the economy. Withdrawal of the stimulus plan does not mean that all of the previous financial policies will be moved accordingly. These policies will be continuously carried out, but may be slightly fine-tuned. Read the rest of this entry »

Illegal Use of Company Chops Seemingly Endorsed in Beijing Court Ruling

Mar. 10 – A court in Beijing has awarded an employee of a foreign-invested advertising company RMB400,000 for wrongful dismissal after the employee was fired when she established a trade union using the company’s chop without permission, China National Radio reported on Tuesday.

The former human resources manager at R&D Advertising in Beijing, identified as Ms. Cui, sued the company last year, alleging that the company had fired her because of her union role. Read the rest of this entry »

New Board to Bring Major Multinational Firms to Mainland Soon

Mar. 10 – The Shanghai Stock Exchange completed draft listing and trading rules of its international board which will allow overseas companies to float shares in China’s A-share market, SSE Chairman Geng Liang said on Monday.

The draft rules are completed, but they are still working on the details, and the revised rules will be available for public comment soon, according to Geng. Read the rest of this entry »

RO Chief Representatives May Consider Power of Attorney in Tax Questioning

Op/Ed Commentary: Chris Devonshire-Ellis and Richard Hoffmann

Mar. 9 – With foreign company representative offices coming under intense scrutiny at the present time due to the changes in tax treatments levied from January 1, 2010, pressure is now on the chief representatives of China-based ROs to fully comply with tax audits and questions raised over their activities for the audit period 2009.

The State Administration of Tax issued Guoshuifa [2010] No. 18, issued on February 20, 2010, explicitly stipulates that ROs will need to pay corporate income tax on their taxable income, as well as sales tax and VAT. ROs will need to use the cost plus method or actual revenue method to determine their deemed profit margins, and under the new regulations, that deemed profit margin is to be no less than 15 percent, an increase from the previous deemed profit margin of 10 percent. Read the rest of this entry »

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