Other Briefings
Withholding Tax in China
Corporate withholding tax is levied on the income of foreign enterprises that do not have a physical establishment in China, but provide services to China-based businesses. In this article, we provide an overview of withholding tax in China, what income types are subject to it, and the updated tax rates for dividends under tax treaties.
China Plans to Cut Corporate and Personal Tax Rates
Last week, China’s Premier Li Keqiang announced that the government plans to cut corporate and personal tax rates. The plans include simplification of the value-added tax structure, and the reduction of corporate income tax and individual income tax rates.
Revisiting Tax Incentives for R&D Activities in China
China’s 13th Five Year Plan focuses on science and technology innovation, and has subsequently released regulation standardizing tax incentives for R&D expenses. Here we clarify the requirements and scope of R&D activities, and the application materials and process for enjoying the incentives offered.
Cracking Down on Pollutants: Comprehending China’s New Environmental Protection Tax Law
In December 2016, the National People’s Congress promulgated China’s first Environmental Protection Tax Law. The Law, which comes into effect January 1, 2018, provides guidelines for levying taxes on entities that emit air and water pollutants, solid wastes, as well as noise pollution.
The BEPS Action Plan in China and Hong Kong: Impact Assessment for Foreign Enterprises
Hong Kong has released implementing measures to support the OECD’s base erosion profit shifting (BEPS) package, a tool to prevent strategies that exploit tax law loopholes in order to shift profits abroad. This article explores the localisation of BEPS actions in both Hong Kong and China, and provides MNEs with advice for impact assessment.
Case Study: Capital Increases and IIT Calculation During Equity Transfers in China
Equity transfer is a common component of the M&A process, taxation of which is a complex issue. If entities incorrectly calculate tax obligations, then they risk being reprimanded by tax authorities. This case study will explore several issues that hinder clear tax declaration when executing an equity transfer.
Understanding China’s VAT Accounting Guidelines
The Ministry of Finance has issued regulations on how VAT is accounted for, ready for the annual reporting deadline. Find out more about what the implications of the clarified terminology and standardized accounting methods are for foreign businesses operating in China.
An Overview of China’s VAT Reform
Hailed as China’s most significant tax reform in over two decades, the value-added tax (VAT) was implemented as the country’s only indirect tax in 2016. The government envisions the reform to further propel growth in services and consumption as China pivots away from the low value-added industries.
