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China - Looking Ahead (3rd Edition)

  • Editorial

  • Foreword

    Khoonming Ho, Tax Partner in Charge, China and Hong Kong SAR

  • BEPS – what will it mean for China?

    The OECD’s action plan for multilateral cooperation to address tax base erosion and profit shifting (BEPS), published on July 19 2013, inaugurates a global collaborative effort to modernise the international tax system. The plan describes 15 proposed actions, identifies expected outputs and establishes the anticipated timeframe. Abe Zhao, Leonard Zhang and David Chamberlain of KPMG China comment on the implications of BEPS for China.

  • CIT – cross-border transactions under scrutiny

    While China is seeking to enhance its position as a favourable jurisdiction for international trade and investment, it needs to safeguard its tax base in the context of cross-border transactions. Chris Xing, Curtis Ng and Vincent Pang of KPMG China assess how the country is working to improve the efficiency of tax collection and combat tax evasion arising from cross-border transactions.

  • Transfer pricing – Chinese authorities scaling new heights

    The OECD released its BEPS Action Plan in July 2013 in an environment that continues to challenge global economic recovery. Cheng Chi, Irene Yan, Brett Norwood and Michelle Sun of KPMG China provide their insights on how China is raising its effort to combat aggressive tax planning and evasion and play a more critical role in transfer pricing enforcement and thought leadership globally.

  • VAT reforms to accelerate in 2014, with challenges lying ahead

    On August 1 2013, the Chinese government announced the nationwide rollout of the first phase of the VAT pilot programme, a significant advance towards replacing business tax (BT) throughout mainland China with a value added tax (VAT) for the services sector. Lachlan Wolfers, John Wang and Shirley Shen of KPMG China look ahead at further VAT changes to come in 2014.

  • Customs – from enforcer to enabler

    The conventional perception of the Chinese Customs authorities has always been that of a trade restrictive border guard that imposes financial and administrative barriers for importers and exporters. However, Lilly Li, Anthony Chau and Eric Zhou of KPMG China observe there are signs that the Chinese Customs authorities are slowly adopting global practices that are geared more towards trade facilitation than trade restriction.

  • M&A relief – flickering lights at end of tunnel

    John Gu, Lily Kang and Eileen Sun of KPMG China analyse the tax challenges for M&A activities in China and share their insights on how tax regulations may evolve to deal with these challenges.

  • Private equity – exit challenges

    In tandem with the rapid increase in private equity (PE) activities in China over recent years, Chinese tax authorities have taken seemingly aggressive steps to protect its tax base. John Gu, Paul Ma and Henry Wong of KPMG China consider the tax challenges that will or will continue to be faced by PE investors especially and advise on measures to mitigate those exposures.

  • From Qianhai to Shanghai – resurgence of regional incentives?

    Preferential tax incentives specific to certain areas were supposed to be things of the past after the 2008 corporate income tax (CIT) reform. However, the recent launch of the Qianhai Cooperation Zone and the Shanghai Pilot Free Trade Zone (PFTZ), suggests otherwise. Karmen Yeung and Chris Mak of KPMG China examine the implications for foreign investors.

  • Hong Kong – new tax initiatives in the pipeline

    Hong Kong’s status as an international finance centre has been enhanced by recent developments relating to double taxation agreements, Islamic finance and tax information exchange agreements. Ayesha Lau, Darren Bowdern and Garry Laird of KPMG China examine these developments and consider how the OECD’s BEPS project may have an impact on Hong Kong.

  • Real estate – the tax landscape in China and Hong Kong

    Chris Abbiss, Lewis Lu and Jean Jin Li of KPMG China foresee significant changes to the tax and regulatory environment in both Hong Kong and Mainland China over the next 12 months.

  • Transportation and logistics – challenges of VAT reform

    China’s unification plan for indirect taxes will see the dual business tax (BT) and value added tax (VAT) regime gradually replaced by a single VAT system. Many businesses in the transportation and logistics industry are still wrestling with the uncertainties and local variations created by the reform, so far introduced on a pilot basis. Jennifer Weng, Tracy Zhang and Bin Yang of KPMG China provide advice on how these issues may be resolved.

  • Healthcare industry – under closer scrutiny than ever

    China will be a crucial player in the healthcare & life sciences industry soon, including being a global leader in drug discovery and innovation. It is unsurprising then that the pharmaceutical industry has come under the scrutiny of Chinese authorities, including those in tax. Grace Xie, Henry Ngai and Ho-Yin Leung of KPMG China discuss the challenges facing the healthcare industry in China in 2014.

  • Auto industry – bumpy rides ahead

    With the auto industry in China growing at a breakneck pace, the Chinese authorities are placing it under close scrutiny on issues ranging from Customs duties, indirect tax and transfer pricing. William Zhang, David Ling and Sam Fan of KPMG China examine the tax challenges lying ahead for car manufacturers and producers of auto parts and components in China, and ways to deal with those challenges.

  • Green tax policy – slow but steady

    China has made some progress recently regarding resource tax, consumption tax and an emission trading scheme. It may be only time before this more holistic approach culminates in an environment tax or green tax. Jean Ngan Li, Sunny Leung and Jessica Xie of KPMG China consider what progress may be made in China’s tax policies on environmental protection.

International Correspondents