The briefing contains case studies and analysis from leading practitioners and is designed to help corporate users determine the impact of tax and financial regulation on the profitability of a transaction.
For example, as explored in the Briefing, the State Administration of Taxation (SAT) has announced a road map for international taxation policies through 2015. Taxpayers should expect more tax compliance requirements, more disclosure and reporting obligations, and more inspections for those graded as high tax risk.
Another topic considered is China’s stepped up enforcement of anti-avoidance regulations which is yielding record tax collections on indirect transfers. Treaty considerations are also highlighted as the tax authorities have imposed strict conditions on foreign investors before they can be eligible to claim the favored withholding tax found in the tax treaties entered into by the PRC (including the tax arrangement with Hong Kong).
The briefing explains China’s testing of new VAT programs and indirect taxes such as Shanghai’s pilot VAT and its expansion into other regions. Businesses operating China should assess and calculate variable tax positions based on their characteristic industries position in transactions (provider or customer) applicable rate and the input VAT under the new VAT reform. With this information a business can make an informed decision on whether it is more advantageous to be a general VAT payer or small-scale VAT payer.