Under new rules on foreign-sourced income exemption, MNEs that don’t meet certain substance requirements may be taxed on some types of income derived overseas.
Hong Kong will amend its tax law to comply with EU standards on taxation of passive income, which may impact some foreign enterprises in the city.
One of the key advantages that Hong Kong holds over other holding company jurisdictions is its Closer Economic Partnership Agreement with Mainland China. Set up in 2002 after China’s accession to the WTO, it is essentially a free trade agreement. Also Supplement VIII, signed in December 2011 and implemented from April 2012, deepened liberalization of trade in services.
Asia Briefing devotes this issue of China Briefing to providing a practical comparison of taxation throughout Asia. In particular, this issue takes a look at the taxes most applicable to foreign businesses and individuals in Asia, i.e., corporate income tax, value-added tax, goods and service tax, standard tax on dividends and individual income tax.
Singapore doesn’t usually come onto the radar for most folks when it comes to holding China investments, but in the changing dynamics of emerging Asia, that is beginning to change. While the use of holding companies to own foreign-invested China businesses has long been corporate practice, these have tended to concentrate on Hong Kong and, in the past, other offshore jurisdictions such as the British Virgin Islands or similar exotic domiciles.