As the Chinese zodiac cycle moves into a new 12-year cycle, the changes across the tax landscape are transitioning in a similar fashion.
The ninth edition of KPMG's China – Looking Ahead chronicles a busy a year. It also provides an insight into how the tax policies are being designed to interact with international developments. In the following chapters, KPMG's experts explain how tax policy is evolving in mainland China and Hong Kong SAR.
2020 is the Year of the Rat, an animal that is believed to be clever and successful – much like the innovative data and analytics techniques being developed by the State Taxation Administration. There also has been a shift from document-based analysis carried out by tax auditors, to more efficient digital tools. This guide's VAT chapters make some bold predictions about how data and analytics will grow stronger in the coming year, indicating how taxpayers may need to adapt.
With the year of the rat also symbolising wealth and surplus, it is apt that the Chinese government is continuing its efforts to open the economy to inbound and outbound investment – particularly as part of the Belt and Road Initiative (BRI). However, this guide's outbound chapter, as well as the chapters on Hong Kong SAR, M&A and R&D, covers the tax challenges Chinese companies face along the BRI countries.
Separately, achieving the quiet and peaceful life that the rat represents may be difficult amid continuing trade tensions with the US and disagreements across the Inclusive Framework on how to tax the digital economy. This guide's digital economy chapters dive into China's high-tech sector and how look inward at domestic tax law and administration issues to be resolved for the country's digital industry.
Meanwhile, the topics of customs and trade policies, as well the evolution of transfer pricing arrangements and tax treaties are explored across a range of chapters.
The past 12 years and the 2019 Year of the Pig have been eventful, but the momentum will continue into 2020. We hope that the ninth edition of KPMG's China – Looking Ahead will be a valuable tool in guiding you through the developments.
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