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China - Looking Ahead (7th Edition)

  • Editorial

  • Foreword

  • Checklist of hot China tax issues for MNEs in 2018

    In 2018, multinational enterprises (MNEs) should in particular be on alert for the following anticipated China tax developments.

  • VAT: A pathway to 2025

    Lachlan Wolfers, Shirley Shen, John Wang, and Aileen Jiang consider the long-term trends in the global development of indirect taxation, with a particular focus on the role of technology, and the implications for China’s VAT system.

  • China after BEPS, for now…

    In 2017, we saw China continue with its rollout of the BEPS changes, make proposals for new incentives for foreign investment in China, and leverage new technologies for enhanced enforcement efforts. What is more, a new vision for China's international tax policy is gradually emerging. These developments are the focus of this chapter by Chris Xing, Conrad Turley, Jennifer Weng, and Karmen Yeung.

  • A thousand miles begin with a single step: tax challenges under the BRI

    As companies embark on overseas investment and projects under China’s Belt and Road Initiative (BRI), they are increasingly encount­ering tax issues in emerging and developing countries. Michael Wong, Joseph Tam, Alan O’Connor, Karen Lin, and Cloris Li look at key corporate tax issues they may face, and how the SAT is supporting Chinese companies to navigate through these overseas tax challenges.

  • TP in China: all the data in the world

    In 2017, China's State Administration of Taxation (SAT) completed its multi-year TP legislation overhaul by issuing Announcement 6 on special tax adjustments, investigations and MAP. With a distinct anti-avoidance flavour, Announcement 6 preludes the escalation and growing complexity of TP enforcement in China. Cheng Chi, Xiaoyue Wang, Kelly Liao, Mimi Wang and Rafael Miraglia discuss.

  • Chasing deals: tax trying to keep pace with business in China

    John Gu, Yvette Chan, Chris Mak, and Sam Fan explore the M&A tax challenges arising in hot sectors like TMT and healthcare, and for take-private transactions, establishing how investors can best get prepared. They note how, given the pace of developments and tax uncertainties, there is a need for the China tax authorities to provide greater clarity. More than ever, appropriate tax planning is crucial for M&A transactions.

  • Adding wings to a tiger: data in tax enforcement in China

    New data and technology-driven, risk-oriented, tax administration and enforcement approaches by the Chinese tax authorities are compelling taxpayers to up their game. Taxpayers are developing enhanced internal tax risk controls and IT, and engaging with the tax authorities in a collaborative manner. Tracy Zhang, Wei Fang, Anthony Chau, Lilly Li, discuss the latest trends and changes.

  • A brave new world in tax transparency: CRS in China, Hong Kong and Taiwan

    Increasing cross-border business and investment has made the holding of assets overseas through offshore accounts increasingly common. This has become a new tax battleground for businesses and governments. Charles Kinsley, Henry Wong, and Eva Chow look at the latest developments regarding these efforts in China, Hong Kong and Taiwan.

  • This time it’s personal: China IIT on the eve of a major revamp

    In 2017, we saw significant new China individual income tax (IIT) enforcement trends in relation to outbound and inbound expat tax monitoring and audit, as well as equity incentive schemes. Michelle Zhou, Jason Jiang, Sheila Zhang, Angie Ho, and Murray Sarelius highlight areas to watch for in the future.

  • All roads lead to…: new integration regime in China customs

    In 2017, the China customs authorities took major steps to revamp their existing national structures, with consequences for audit processes and enforcement approaches. In this chapter, Eric Zhou, Rachel Tao, Cheng Dong, and Helen Han explore the impact of these reforms.

  • One billion Chinese mobile phone users can’t be wrong: tax and the digital economy

    The disparity between China’s rapidly developing and evolving digital economy and its largely traditional economy-based tax administration system is growing, and is creating challenges for both the tax authorities and taxpayers. Sunny Leung, Benjamin Lu, Jessie Zhang, and Grace Luo explore the issues.

  • The future is green: EPT in China

    In accordance with China’s 13th five-year economic development plan, which commenced in 2016, new policy tools such as the environment protection tax (EPT) and a reformed resources tax (RT) are being used to promote a ‘green development philosophy’. Jessica Xie, Flora Fan, William Zhang, and Maria Mei explore these new developments and what they mean for China’s greener future.

  • Better smart than lucky: China R&D incentives 2.0

    Yang Bin, Rachel Guan, Josephine Jiang, and Henry Ngai examine the refinements being made to China’s innovation incentives, and their importance as a driver of continued Chinese economic growth.

  • Taiwan: tax goes digital

    In 2017, the Taiwan government proposed imposing VAT on foreign enterprises providing e-commerce services to Taiwan individuals, expanding the Taiwan corporate income tax (CIT) nexus rule, and making personal income tax changes. It is also looking at abolishing and replacing the corporate-shareholder imputation tax system. Stephen Hsu, Hazel Chen, Ellen Ting and Betty Lee elaborate.

  • Hong Kong tax: Let the economy take the lead

    Ayesha Lau, Darren Bowdern, Michael Olesnicky, John Timpany and Curtis Ng discuss Hong Kong’s BEPS-related changes after the territory issued a consultation paper to codify and strengthen TP regulations, as well as joining the Multilateral Instrument (MLI). The Hong Kong government is also increasingly using tax policy to encourage economic development.

  • Tax boosts for Hong Kong funds industry

    Darren Bowdern, Matthew Fenwick, and Malcolm Prebble explore the various initiatives that the Hong Kong government has introduced to boost Hong Kong’s position as a regional management hub in Asia. While Hong Kong is making positive changes to attract more funds to domicile in Hong Kong, more tax certainty is needed to convince fund managers to move.

International Correspondents