China desk Newsalerts - Archives

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January 2010

  • Overseas Indirect Equity Transfer by Non-China Tax Residents under Scrutiny
    Overseas Indirect Equity Transfer by Non-China Tax Residents under Scrutiny: multinational corporations often interpose a Special Purpose Vehicle (“SPV”) as an intermediate holding company for their investments in China, to avoid Chinese taxation upon divestment. Chinese tax authorities are scrutinising such SPV investment structures in the anti-tax avoidance combat, and issued a circular imposing extensive reporting requirements in case of indirect equity transfers. Read the full Newsalert
  • Salient points of indirect transfer under Circular 698
    Circular 698 covers the transfer of equity that is directly or indirectly held by Non-TRE investors in a China Tax Resident Enterprise (“TRE”).  Read the full Newsalert
  • Update of Taiwan’s incentive schemes
    On 16 April 2010, the Taiwanese Legislative Yuan passed the Statute for Innovating Industries (“SII”) which is applicable retrospectively from 1 January 2010. This SII replaces the old Statute of Upgrading Industries (“SUI”) which expired at the end of 2009. Read the full Newsalert
  • New Chapter of China’s Foreign Tax Credit Mechanism
    On 25 December 2009, the Ministry of Finance and the State Administration of Taxation (“SAT”) have jointly issued the long-awaited circular Caishui [2009] No. 125, titled “Notice Regarding Relevant Issues on Tax Credits for Foreign Income Derived by Enterprises” (“Circular 125”), to set forth detailed guidance on the implementation of FTC Mechanism under the new CIT regime. Circular 125 took effective retrospectively from 1 January 2008.  Read the full Newsalert
  • Hong Kong clarifies “source of profits” for cross-border contract and import processing businesses
    In a revised Departmental Interpretation & Practice Notes (“DIPN”) No. 21 issued in December 2009, the Inland Revenue Department (“IRD”) of Hong Kong views that contract and import processing arrangements should be dealt with differently for Hong Kong profits tax purposes. Complemented by recent case laws and decisions, this revision provides additional insight into the notion of the “source” of profits under such manufacturing arrangements in Hong Kong’s territorial tax system. Read the full Newsalert

December 2009