In 2009 the State Administration of Taxation (SAT) undertook significant steps in relation to clamping down on anti-avoidance practices. However, taxpayers certainly should expect any lessening of the resolve of China’s tax authorities. I just came across an article published (in Chinese) on the SAT website that indicates (and confirms what Hwuason has been hearing) [...]
There are a lot of myths and misunderstandings about representative offices … probably the biggest is the idea that there is a 10% tax on the gross expenses of ROs. I pointed out previously (see my response to Alexandre in the comments section) why such a statement is strictly incorrect and is unhelpful in terms [...]
Hwuason Seminar Series
The End for Representative Offices?
On 20 February 2010 the State Administration of Taxation issued Circular 18/2010 outlining a new tax treatment for representative offices (ROs) of foreign enterprises in China.
Circular 18/2010 replaces several older circulars relating to the taxation of ROs and introduces significant changes. The new circular [...]
I have been meaning to discuss this issue since early last month, but havent been able to get around to it. A few of my posts since then have sorted skirmished around the issue without taking it directly head on. This issue is obviously related to the issue of representative offices, but is of broader [...]
One of the common questions that I am asked here, and in fact in my role at Hwuason, is in relation to the tax treatment of H-Shares – shares in Chinese companies that are listed on the Hong Kong stock exchange. I briefly mentioned this issue once before in a post (that was inspired by [...]
I have promised to base less posts on riffs from other blogs, but I have had a few drafts of posts that riff and still wanted to publish them. Accordingly, the start of my promise will be delayed for a few days (I hope it doesnt end up like my New Years resolutions every year).
Last [...]
In November last year I commented, in a post entitled “Bamford – special leave granted” (what an exciting title), on a significant Australian tax case that was about to go before the High Court of Australia. The High Court today issued its decision in that case – see Bamford v FCT [2009] FCAFC 66 (3 [...]
I have not entered into the debate over the present value of the RMB and the push by the US for it to be raised. There are many more eminently knowledgeable people than me in this area so I will leave such discussion to them. However, I came across an excellent entry at the Perspectives [...]
After the last few weeks I have given some thought about Circular 18 and whether I think the changes are appropriate or not. I have now decided that I am not a fan of it. Why? Because it perpetuates the notion, which is incorrect as a matter of law, that representative offices (ROs) in China [...]
I recently came across a PWC article on the new protocol to the China-Barbados DTA that indicated DTAs can restrict and preclude the GAAR in China. I have extracted the relevant information below (I reducted information not relevant to the point I am making)
Description /
Income stream
China-Barbados DTA
Existing DTA
(effective since 27 October 2000)
Protocol
(not [...]