HR costs and receivables need attention when planning next year’s operating costs
Op-Ed Commentary: Chris Devonshire-Ellis
Dec 13 – In this article, we examine some of the principal cost issues likely to affect foreign investors in China as we get into China budget preparations for 2014 .
China’s increasing labor costs have been well documented, but even today are often not fully appreciated for the total impact they are causing as business expense. China has been raising its minimum wage at a rate of between 15-20 percent per annum for the past few years, and this is set to continue. How much this is increased by is determined at the local government level, and thus changes from city to city. Continue reading
Dec. 13 – China Briefing’s online news edition has passed the 1 million page views mark for the first time this year, comfortably attaining that number in early November. The China online news – which encompasses many first edition translations of China’s regulatory updates – is produced by a full time team of three China qualified lawyer and tax specialists, a managing editor, a designer and two further research staff. The facility is based in Shanghai. Additional commentary and opinion is often provided by long term China expert Chris Devonshire-Ellis, in addition to Dezan Shira & Associates senior China personnel Sabrina Zhang (tax) and Richard Cant (law). The one million page views figure is verified by Google Analytics. Continue reading
Dec. 11 – The VAT pilot reform represents tax saving opportunities for many taxpayers, but increased tax burdens for others. For service providers in China who are now registered as general VAT taxpayers, they can claim input VAT credits for the purchase of goods, fixed assets and services used in their business. It is therefore more advantageous for these service providers to contract with other providers who are also VAT payers so that they can recover VAT incurred on costs, as compared to contracting with a business tax (BT) payer since BT is not deductible. For businesses selling and importing goods, it is now possible to claim input VAT credits for the purchase of services that fall under the pilot reform. Continue reading
Dec. 10 – The People’s Bank of China (PBOC), China’s central banking authority, promulgated the “Interim Measures on Administrating Interbank Certificates of Deposit (PBOC Announcement  No.20, hereinafter refered to as ‘Interim Measures’)” over the weekend as a guideline for financial institutions issuing and trading certificates of deposit (CDs) in the interbank market, which entered into effect immediately on December 9, 2013. Detailed information can be found below. Continue reading
Practice targets further Asia expansion as well as significant IT investments and ISO 27001 standards
Dec. 9 – Dezan Shira & Associates has just concluded its annual meetings, held this year in Shenzhen, China with 36 senior staff flying in from all over Asia and the United States. The firm employs several hundred lawyers, tax experts, accountants and auditors across 18 offices throughout Asia, and is renowned internationally for its work with assisting foreign mid-cap multinationals to establish their operations in Asia, including due diligence, legal establishment and tax planning issues, as well as on-going administration support in accounting, tax filing, payroll, audit, compliance and M&A services. Continue reading
Dec. 6 – Year-on-year import and export figures released by the Chinese government indicate growing ties with ASEAN and increases in bilateral trade with nearly all countries in Asia with the exception of Japan and India. Evidence of increasing consumerism in China came from export figures from Australia, the Philippines and Vietnam, all of whom showed healthy increases of exports to China. Imports from China rose significantly in Malaysia, Thailand and Vietnam, showing that Chinese companies are increasing their spread into Southeast Asia and are taking advantage of the ASEAN-China Free Trade Agreement. Continue reading
Dec. 6 – The executive meeting of China’s State Council chaired by Premier Li Keqiang decided on Wednesday that China will expand its reform of value-added tax (VAT) in lieu of business tax (BT) to the railway transportation and postal service industries starting on January 1, 2014. Continue reading
Dec. 3 – The new issue of China Briefing Magazine, titled Revisiting China’s Value-Added Tax Reform, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the month of December.
As China’s economy develops, its tax regime has also continued to evolve as the government strives to create a system that best promotes sustainable market growth. Both business tax (BT) and value-added tax (VAT) are indirect taxes that have been implemented in China for decades. VAT income is shared between the central and local governments, with the majority going to the central government.
Meanwhile, the entire BT levied goes to the local governments. While this arrangement ensured a steady and sufficient stream of income for both the central and local governments, it also created high tax burdens for enterprises. Continue reading