Jan. 20 – A looming trust product default of 3 billion RMB (approximately US$500 million) recently raised concerns about the regulatory system of China’s financial industry. The product in question was issued by China Credit Trust Co., with funds mostly invested in the assets of an unlisted Chinese coal company that has subsequently gone into liquidation.
The state-owned Industrial and Commercial Bank of China (ICBC) acted as a custodian and had been marketing the fund to their private banking clients. According to AASTOCKS.com, a Hong Kong-based news agent, ICBC has suggested that it would not reimburse the investors if the product defaults.
As reported by Reuters, an ICBC spokesman said that, “regarding this unsubstantiated rumor, a situation completely does not exist in which ICBC will assume the main responsibility (for the trust product).” Continue reading
Jan. 17 – The accounting profession in China and, more generally, Asia, will undergo dramatic changes over the next decade as competition intensifies and business complexity increases, according to the Intuit 2013 Future of Accounting Report. More accounting or tax-related products and services will enter the market as banks, financial services companies, software and Internet firms, and even governmental bodies, innovate and develop new offerings.
According to the report, over the next decade, accounting firms will need to be alert not only to competition from other accountants, but also from consulting and business advisory firms. Using the new accounting or tax-related products and services, these firms will soon be able to provide accounting-related services alongside their current services, encroaching on what has traditionally been the domain of accountants. Continue reading
Jan. 16 – The State Administration of Taxation (SAT) of Hainan Province recently released a Letter (Qiongdishuihan  No. 817) concerning the business tax (BT) issue of intragroup loan transactions. It refers to the “Notice Concerning Business Tax Issues of Collective Borrowing and Repayment of Non-Financial Institutions” (Caishuizi  No. 7, hereinafter referred to as “Circular 7″) jointly released by the Ministry of Finance and the SAT of China, and reaffirmed that eligible intragroup loan transactions are not subject to BT.
Jan. 16 – The new issue of Asia Briefing Magazine, title Payroll Processing Across Asia, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of January and February.
Collecting tax revenue and administering social insurance are two of the most fundamental roles of government. When establishing or operating a business in Asia, companies must take special care to comply with regulations concerning taxes deducted at the source of employee payroll (withholding tax) and mandatory contributions to social insurance programs.
As you might expect in a region comprising so much diversity and complexity, the systems utilized by governments in places like China and Vietnam (countries with large populations and with a communist background) are substantially different than those in places like Hong Kong and Singapore – small jurisdictions with a distinctly capitalist outlook. India, a populous emerging nation with a democratic system of government, provides an interesting contrast in terms of how it taxes and supports its citizens. Continue reading
Jan. 14 – China’s State Administration of Taxation (SAT) of Jiangsu Province recently released an announcement (Sudishuigui  No. 6, hereinafter referred to as the “Announcement”) to specify the deadline for the filing of property tax, urban land use tax, vehicle and vessel tax, stamp tax, urban maintenance and construction tax and land value-added tax. The Announcement entered into effect on January 1, 2014.
Jan. 14 – The new issue of China Briefing Magazine, titled Annual Audit and Compliance in China, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of January and February.
January and February are always busy times for company administration in China, with annual license renewals and updates to file, together with procedures for preparing your annual audited accounts for 2013.
The past year might have been a turning point for China. After the smooth leadership transition that took place at the beginning of 2013, the new cabinet led by President Xi Jinping and Premier Li Keqiang has been trying to play the role of reformers by further opening up the Chinese market and bringing more foreign investments into China. Thousands of administrative regulations were abolished by the State Council. Further, in November 2013, the Third Plenary Session of the 18th Central Committee of the Communist Party of China (CPC) revealed a series of comprehensive reforms which will be pushed in the following decade. Continue reading
Jan. 13 – China’s Ministry of Finance and the State Administration of Taxation jointly released the “Circular on Tax Policies for Cross-Border E-Commerce Retail Exports (caishui  No.89, hereinafter referred to as ‘Circular’)” on December 30, 2013, which offers value-added tax (VAT) and consumption tax (CT) refund and exemption to exports by e-commerce retail enterprises. For the purpose of the Circular, e-commerce retail export enterprises refer to enterprises that utilize their own or a third-party platform to engage in e-commerce export business. Continue reading
Jan. 9 – On Monday, China’s State Council announced its decision to modify a series of measures on foreign investment approval and admission within the Shanghai Free Trade Zone (Shanghai FTZ). This move is part of a wider effort to reform China’s foreign investment management system and further open its service sector to foreign investors. Continue reading