Top Stories - Tax law

By Eunice Ku and Shirley Zhang, Dezan Shira & Associates
2nd May 2013 08:52With respect to M&As involving the acquisition of Chinese domestic companies by foreign investors, in June 2009, the Ministry of Commerce promulgated the “Provisions on Foreign Investors’ Merger with and Acquisition of Domestic Enterprises (Order No. 6, ‘M&A Provisions’),” which address share and asset acquisitions of Chinese enterp ... read more

By Shirley Zhang, Dezan Shira & Associates
21st March 2013 09:03Importing to and exporting from China generally involves three types of taxes:   1.    Value-added tax; 2.    Consumption tax; and 3.    Customs duties.   1. Value-added Tax for Imported Goods ... read more

By Dezan Shira & Associates
11th March 2013 08:41The Foreign Account Tax Compliance Act (also known as FATCA), was enacted in 2010 by the U.S. Congress to target non-compliance by U.S. taxpayers using foreign accounts. It requires foreign financial institutions (FFIs) to report to the Internal Revenue Service (IRS) information about financial accounts held by U.S. taxpayers worth more than US$50,000, or by foreign entities in which U.S. taxpayer ... read more

By Dezan Shira & Associates
20th February 2013 08:49In this article, we give a brief overview of India’s major taxes and duties on business, including Corporate Income Tax, Dividend Distribution Tax, Minimum Alternative Tax, Value-Added Tax, Central Sales Tax, Goods And Service Tax, Customs Duty, Excise Duty (CENVAT) Service Tax, Capital Gains Tax, Wealth Tax, and Withholding Tax.   The central and state ... read more

By Dezan Shira & Associates
28th January 2013 09:48Many foreign investors operating in China today are looking at Vietnam as a sort of additional “province” or alternative hub to integrate into their current Chinese or Asian supply chain. This is particularly true in sectors where China and Vietnam often compete, such as leather goods, shoes, textiles, furniture and light electronics. This list is set to expand as Vietnam is up ... read more

By Dezan Shira & Associates
25th January 2013 10:14Individual income tax (IIT) is normally withheld from wages or salaries by employers and paid to the tax authorities on a monthly basis (within 15 days of the end of each month).   An annual IIT declaration should be submitted to tax authorities within three months of the end of the previous calendar year (i.e., between January 1, 2013 and March 31, 2013 for the ... read more

By Philip Baker QC, Hui Ling Mccarthy & Laurent Sykes
2nd January 2013 12:58Tax disputes happen.  This is an inevitable consequence of complex tax systems and complex fact matrices.  The important thing is that they are either avoided – if possible – when tax advice is given, or, if they cannot be avoided, that they are resolved satisfactorily.   Tax barristers belong to that part of the UK legal pro ... read more

By Tobias Lintvelt & Seema Sharma
7th December 2012 10:10The tax environment in Middle East & North Africa (“MENA”)   In many MENA countries, the Arab spring has brought to the fore, the urgent need to substantially increase employment and improve the social well being of their population majorities.  Governments in these countries are responding with th ... read more

4th December 2012 10:07Da Nang Hi-Tech Park is the newest among three high-technology zones in Vietnam, besides Hoa Lac Hi-Tech Park in Hanoi and the Ho Chi Minh City Hi-Tech Park. Da Nang City is calling for foreign investment in its hi-tech park by promising attractive incentives. The Vice Chairman of Da Nang Phung Tan Viet presented in front of the Dutch business representatives in an event ... read more

By Dezan Shira & Associates
28th November 2012 09:12India has initiated the process to revise its double taxation avoidance agreements (DTAs) with over 75 countries in an effort to strengthen its legislative framework to control the black money generated domestically and the flow of such illegal funds to foreign countries. On October 26, India signed a protocol to amend the existing 19-year-old DTA with Spain to facilitate the exchange ... read more

By Eleanor MacDonagh, Fergus Gillen & Mark White
12th November 2012 09:03Since 2008, US private equity funds, among other investors, have been seeking to invest in distressed debt portfolios in Ireland and elsewhere.  In the past 10 months in Ireland, however, there has been a marked increase in the number of deals completing.  Interesting trends are emerging in connection with the structures explored and employed for the purposes of housing the targe ... read more

By Dominique Pepin
6th November 2012 09:07Disagreements, to various degrees, are a part of every relationship.  The use and enforcement of taxing statutes has the potential to give rise to conflict, with both the taxing authorities and the taxpayers having opposing views and objectives.   As in many other relationships, a tax dispute takes its roots in the actions of a third party:  in ... read more

By Damien Malone
30th October 2012 09:09The number of businesses locating in Ireland over the past decade has increased enormously with major multinationals basing their international operations here and foreign individuals starting their business – some helped by state aided international start-up funds to target investor ready overseas entrepreneurs – in Ireland.   R ... read more

By David Petit
23rd October 2012 09:06 The media had a field day over Jimmy Carr’s use of a tax scheme using an offshore jurisdiction and once again politicians have been quick to tap into the concern of the general public, this time linking tax avoidance, or should I should say tax mitigation, to issues regarding morality.   This is dangerous ground of course; some may questio ... read more

By Stefan Süss & Dr. Thomas Fox
9th October 2012 08:52German legislators plan to further amend the German domestic holding privilege. Proposed plans include making capital gains and dividends from certain corporate minority stakes fully taxable. The changes will have a large impact on the German tax landscape, and they bring Germany closer to the ambitious and often-copied taxation system introduced in the early 2000s. This article provides ... read more

By Dezan Shira & Associates
8th October 2012 08:36American expatriates’ global income may be exposed to China individual income tax (IIT) at marginal rates reaching 45 percent. The expatriate may also be required to contribute to the new Chinese social insurance program, and Chinese entities employing such an expatriate may be required to contribute at a multi ... read more

By Tom McClelland
3rd October 2012 08:44Singapore has historically been a favoured holding company location for investment into Vietnam.   The Singapore-Vietnam Double Taxation Agreement (“DTA”) has been a major reason for this.   In September Singapore and Vietnam signed a second protocol to amend certain Articles of the Singapore-Vietnam Double Taxation Agreement (“DTA& ... read more

By Dezan Shira & Associates
1st October 2012 09:07To standardize the law enforcement of tax collection and ensure the thorough implementation of tax policies, China’s State Administration of Taxation (SAT) issued the “Notice on Implementing the Inspection over Tax Collection on Individual Businesses (hereinafter referred to as the ‘Notice’)” on September 3, aiming to crack down on the over-collect ... read more

By Dezan Shira & Associates
11th September 2012 08:41 A specialist group on tax laws recommended that the Indian government postpone execution of the General Anti-Avoidance Rules (GAAR) until financial year 2016-17 and eliminate capital gains tax on securities transfers to ensure investment and capital flows. The group, appointed by the Prime Minister of India, suggested a series of steps which are likely to alleviate invest ... read more

By Christian Fleming
7th September 2012 09:42 VAT status in China crucial for pre-incorporation financial planning, especially for SMEs.  One factor to consider when calculating the overall cost of China’s recent VAT reform is whether or not a company should become a general taxpayer or remain a small-scale taxpayer.  Although the VAT rate for small-scale taxpayers is much lower than that for general ta ... read more

By Tiago Marreiros Moreira & Francisco Cabral Matos
4th September 2012 09:10 Saying that “Portugal is an interesting country for investors to look at” may seem a bold statement.  We take the risk of putting forward such statement, but we also take the opportunity to give substance to it and have a glance on some of the existing opportunities and a few others coming up soon.   Portugal has suffere ... read more

By Sara Luder, Sébastien de Monès & Paul Sleurink
29th August 2012 08:31 The UK has made great strides in reforming its corporate tax rules to make it competitive for UK based multinationals.  Corporates are exempt from tax on dividend income and on gains arising on the sale of subsidiaries, but they are still, broadly speaking, entitled to claim an interest deduction in respect of acquisition debt.     ... read more

By Tom McClelland
20th August 2012 09:00 If there is one thing that is certain concerning Vietnam’s tax system it is change.  This has been no different in 2012 with new regulations for all the major taxes.  There have been some positive changes including a new withholding tax Circular in which the interest withholding tax rate (a deemed Corporate Income Tax (“CIT”)) has been re ... read more

By Morris Rozario
13th August 2012 08:39 All companies are concerned with the same bottom-line question about their taxes: “How much are we going to pay this year?”  For global companies, that question is harder to answer than it has been for many years.    From a business perspective, tax costs like all other expenses, need to be managed to ensure cer ... read more

By Dezan Shira & Associates
10th August 2012 09:52 On July 31, 2012, the Ministry of Finance and the State Administration of Taxation issued the “Notice on Commencing the Business Tax (BT) to Value-added Tax (VAT) Conversion Pilot Reform in the Transportation and Certain Modern Services Industries in Beijing and Seven Other Provinces and Municipalities (hereinafter referred to as the ‘Notice’)”.& ... read more

By Dezan Shira & Associates
3rd August 2012 10:01The tax filing date for the financial year 2011-12 is July 31, 2012.  Returns can be filed after July 31, 2012 but before the relevant assessment year (March 31, 2013), however it is advisable to file the tax returns by the due date.   The timelines for filing up of tax returns are as follow:    - November 30, ... read more

By Yao Lu
25th July 2012 09:37 To standardize the enforcement of taxation law and safeguard the legitimate rights and interests of taxpayers, China’s State Administration of Taxation (SAT) issued the “Guiding Opinions on Regulating the Administrative Discretion of Taxation Authorities (guoshuifa [2012] No.65, hereinafter referred to as ‘Opinion’)& ... read more

By Chris Devonshire-Ellis
20th June 2012 08:30  India’s goods and service tax (GST) is a nationwide comprehensive indirect tax levied on the manufacturing, sales and consumption of goods as well as services. GST is intended to create a single unified Indian market with fewer complications – in turn making it an attractive investment destination. Current scenari ... read more

By Xiaolei Gu
30th May 2012 09:06At a conference with the China Certified Tax Agents Association, Deputy Director of the Department of Goods and Services Tax under the State Administration of Taxation, Long Yuehui, revealed that 10 cities and provinces have officially applied to participate in the value-added tax (VAT) reform pilot scheme so far, including Beijing, Chongqing, Shenzhen, Tianjin, Xiamen, Anhui Province, Fujian Prov ... read more

By Martin Fowler
23rd May 2012 09:27 One of the most contentious political issues facing a number of countries either now or in future years involves placing a price (or tax) on carbon.   It has been said that arguably the two most important issues the world currently faces are:   1) The prevention of  nuclear weapons falling in to the hands of rogue states o ... read more

By Dezan Shira & Associates
18th May 2012 10:39 The Delhi High Court, in its ruling on the case of Commissioner Income Tax vs. EKL Appliances Limited (Taxpayer), has given its decision on the transfer pricing aspects of a royalty payment by the Taxpayer to its associated enterprise. In its judgment, the High Court ruled that royalty payments cannot be prohibited on instances of continuous loss where the spending was proven to be inc ... read more

By Dezan Shira & Associates
14th May 2012 09:25Recent changes to China’s tax treatment of representative offices (ROs) have started to infringe on the viability of using an RO as a vehicle for “investment” into China in terms of increasing financial pressure. While often stated as being an “investment” vehicle, alongside wholly foreign-owned enterprises (WFOEs) and foreign-invested commercial e ... read more

By Eunice Ku
2nd May 2012 10:34The individual income tax (IIT) liability of employees holding a director or senior management position (including general and deputy managers, supervisors, persons occupying functional chief positions, and other persons occupying similar management level positions, collectively “senior personnel”) in China is dependent on a few factors, namely:   ... read more

By Dezan Shira & Associates
30th April 2012 09:56 Following the pilot value-added tax (VAT) reform and the issuance of the “Circular on the Application of Zero VAT Rate and VAT Exemption on VATable Services (caishui [2011] No. 131, hereinafter referred to as ‘No. 131’),” China’s State Administration of Taxation (SAT) on April 5 issued ... read more

By Gerd Foerster
18th April 2012 10:22 Amongst the several advantages of doing businesses in Brazil, the most important are related to the Brazilian territorial size and its population.  Possessing an almost continental extension, being the fifth largest country of the world in area and with a population of approximately 200 million inhabitants, Brazil has a consuming market of more than 120 million people. ... read more

By Nguyen Huyen
17th April 2012 11:15 Vietnam’s Ministry of Finance issued Circular No.157/2011/TT-BTC on November 14, 2011, stipulating the tax rates of export and import tariff preferences under the list of taxable items. The Decree takes effect from January 1, 2012. The 2012 tax schedule has been rene ... read more

By Dezan Shira & Associates
12th April 2012 10:21 Service tax is the tax charged on services offered, which has to be collected from the clients and paid to the government. If these taxes increase, there is an increase in many expenses such as mobile bills, insurance premiums, professional consultations, property purchases from the builder, courier expen ... read more

By Carlos Casanovas and Milton Gonzalez Malla
4th April 2012 12:36Governments are increasingly focused on raising revenues through taxation.   As a result, more jurisdictions are ramping up their enforcement efforts — not only in developed nations but also in many emerging markets.   For instance, tax collection in Argentina has risen steadily during late years.  In fiscal year 2010 government' ... read more

By Willa Tavernier
30th March 2012 11:49 A rare congruence of exemptions under the US and BVI tax codes has prompted United States (“U.S.”) citizens holding British Virgin Island (“BVI”) property to undertake inter vivos transfers to their heirs during 2012. The U.S. lifetime gift tax exclusion up to $5 million, ... read more

By Dezan Shira & Associates
16th March 2012 10:27According to the “Report on the Implementation of Central and Local Budgets for 2011 and on Draft Central and Local Budgets for ... read more

By Robyn Schofield
1st February 2012 10:17 With a flat corporate tax rate of 30% (applying to both revenue and capital gains), Australia is far removed from the zero or low tax jurisdictions traditionally considered to be "tax havens".  Nonetheless, the Australian Government has long desired to establish Australia as a financial services hub and the past decade has s ... read more

By Dezan Shira & Associates
17th January 2012 09:42 On December 29, the State Administration of Taxation (SAT) issued the “Announcement on Issues Concerning the Offset of Value-added Tax (VAT) using Overdue Tax Payment Vouchers (SAT Circular [2011] No. 78)” (the “Announcement”) to resolve the issue of the inability of general VAT payers to declare input V ... read more

By Dezan Shira & Associates
16th January 2012 10:12As the Global Financial Crisis rumbles on, with certain reduced growth rates on the horizon for Europe and the United States, multinationals are looking elsewhere to achieve their business goals. Asia, a region riddled with wars and ineffective economic policies for much of the past century, has finally stepped into the front line of global trade and com ... read more

By Dezan Shira & Associates
29th December 2011 12:41As the Global Financial Crisis rumbles on, with certain reduced growth rates on the horizon for Europe and the United States, multinationals are looking elsewhere to achieve their business goals. Asia, a region riddled with wars and ineffective economic policies for much of the past century, has finally stepped into the front line of global trade and commerce. Like most things in emerging ... read more

28th December 2011 12:51 As the Global Financial Crisis rumbles on, with certain reduced growth rates on the horizon for Europe and the United States, multinationals are looking elsewhere to achieve their business goals. Asia, a region riddled with wars and ineffective economic policies for much of the past century, has finally stepped into the front line of global tr ... read more

By Dezan Shira & Associates
22nd December 2011 10:18As the Global Financial Crisis rumbles on, with certain reduced growth rates on the horizon for Europe and the United States, multinationals are looking elsewhere to achieve their business goals. Asia, a region riddled with wars and ineffective economic policies for much of the past century, has finally stepped into the front line of global trade and com ... read more

By Dezan Shira & Associates
19th December 2011 10:59As the Global Financial Crisis rumbles on, with certain reduced growth rates on the horizon for Europe and the United States, multinationals are looking elsewhere to achieve their business goals. Asia, a region riddled with wars and ineffective economic policies for much of the past century, has finally stepped into the front line of global trade and com ... read more

By François NOUVION
7th December 2011 09:56The Hydrocarbons legislations of countries that belong to the Monetary and Economic Community of Central Africa (CEMAC: Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea, Chad) all provide, as a rule, that hydrocarbons contained in the soil and subsoil are the property of the State and therefore belong to the public domain(1). Agreements entered into ... read more

By Chris Devonshire-Ellis
21st November 2011 09:42Both Hong Kong and Singapore provide viable domiciles for a holding company…But what are the differences? Singapore doesn’t usually come onto the radar for most folks when it comes to holding China investments, but in the changing dynamic ... read more

By Morris Rozario
20th October 2011 09:04The advent of the Arab Spring civil unrest has brought about paradigm changes to the political and social economic landscapes in countries from Bahrain to Tunisia, with the bells ringing change continuing to toll in many countries.  The promulgation of new tax laws with lower income tax rates and the impact of the continuing global financial turmoil are also contributing impetus ... read more

By Mirjeta Emini of Boga & Associates
18th October 2011 09:39In the ambit of the Stabilization and Association Agreement entered into between Albania and EU, Albania has adopted certain amendments to its VAT legislation aiming to harmonize its internal legislation with that of the EU.  Some newly adopted rules on VAT treatment of exports have been associated to the harmonization obligation.  Though sub-legal acts have also been pa ... read more

By Tom McClelland
17th October 2011 08:54In September the Vietnam Ministry of Finance released draft regulations which have introduced significant changes with respect to the taxation of cross border transactions.  These include the introduction of a thin capitalization rule restricting interest deductions, changes in the withholding tax rates as well as new transfer pricing provisions which include the initial regulato ... read more

By Milton Grundy
14th October 2011 09:37Those who live in the United Kingdom do not think of themselves as inhabiting an offshore centre.   Quite the contrary.   But those who do not live in the United Kingdom can to a surprising degree use the country as if it were an offshore centre.  Some readers will no doubt remember the happy days when the zero-tax non-resident English company ... read more

By Richard Moulet of Sutter & Pearce
3rd October 2011 11:23The Republic of Congo  has not escaped the wave of relocation occurred with respect to taxes on income, in many African countries for a good ten years Indeed, the traditional taxation of Francophone African states is based on the principle of territoriality, reproduction of the French system by which it is derived. However ... read more

By Osiel González, Mauricio Loy and Tyriak Bruzual
30th September 2011 09:36As a result of Chile's entry as a full member of the OECD, Transfer Pricing (TP) has received special attention by both the Chilean IRS and the taxpayers.  In this perspective, both parties have devoted time and resources to learn more in detail the scope and the implications that this has now nationally and internationally. ... read more

By Tom Cartwright
29th September 2011 10:21The idea of Chancellor George Osborne in a poncho may be a surprising image, but recent proposals for change in UK tax law in the international sphere have been a case of the good, the bad and the ugly. CFC Reform – Finance Companies The UK's controlled foreign company (CFC) rules apply to impose a charge ... read more

By Axel Haelterman & Robert Neyt
26th September 2011 10:271. Introduction The Belgian Notional Interest Deduction (NID), is a unique, straightforward and beneficial tax measure contributing to Belgium’s status as a centre for corporate headquarters and intra-group financing entities.  It reduces the effective corporate income tax (CIT) rate, increases the after tax retu ... read more

By Andrei Dumitrache
19th September 2011 10:00Whenever called to give a few words on doing business in Romania, I always dedicate a substantial part of that to the Romanian corporate tax system.  The reason is besides any personal bias, Romania does not lack a certain “tax appeal” making it a desirable target for entrepreneurs with an appetite for emerging markets.  ... read more

By Chinapat Visuttipat
15th September 2011 09:53Why ‘Pizza Hut Inc.’ was deemed to receive ‘taxable income’ in Thailand? The  Supreme Court of Thailand ruled in mid 2010 on the case of withholding tax and value added tax (VAT) against Minor Food Group (MFG: a listed company in the Stock Exchange of Thailand) and Pizza Hut Inc. was deemed to receive a part of franchise ... read more

By Imke Gerdes of Baker & McKenzie
13th September 2011 09:52In times of decreasing tax revenue, tax administrations seek for the means to raise the same.  Amongst others, Marketing Intangibles became a favorite source for tax administrations, as there are no clear guidelines on the scope of a Marketing Intangible and foremost, whether there even is a Marketing Intangible.  Therefore, whenever this subject arises, intensive discus ... read more

By Michael L. Schler, J. Leonard Teti II and Steven J. Lorch
12th September 2011 09:44Introduction The Loan Syndications and Trading Association (“LSTA”) is an organization devoted to promoting a fair and orderly corporate loan market and advancing and balancing the interests of all market participants.  On August 10, 2011, the LSTA released new tax provisions f ... read more

By Sylvia Loizides
8th September 2011 09:48Cyprus is very inviting indeed.  From its beautiful beaches to its treasured culture, combining a rewarding standard of leaving in tune with Cypriot hospitality, Cyprus is a dynamic place to be. But, more importantly, Cyprus is a dynamic place to invest.   At the heart of this statement lies the country’s t ... read more

By Richard Mansi of Thorp Alberga
5th September 2011 09:47There are several reasons why the Cayman Islands remain the leading offshore international financial centre.  Taxation is one of them. The Cayman Islands are a free market tax neutral jurisdiction.  The government of the Cayman Islands raises revenue solely via a number of indirect methods and without resorting to an ... read more

By Matej Firický
2nd September 2011 10:061. Modification of investment tax relief Corporate income tax relief was introduced in 2008 and since then it has become the most popular form of state aid granted by the Slovak government. However, only a certain portion of the tax base reported in the tax return could be exempt from taxation.  In other words, to calculate t ... read more

By Imke Gerdes
1st September 2011 09:37In October 2010, the Austrian Ministry of Finance published the first domestic transfer pricing guidelines (“TP Guidelines”), which were awaited by practitioners for a long time.  A first draft that was circulated for comments however, foreshadowed that the TP Guidelines would not be as helpful as experts had hoped for.  This article aims at giving a ... read more

By Geoffrey Simpson
30th August 2011 09:45The UK is thought of worldwide as a high tax jurisdiction with strong tax avoidance legislation and a harsh attitude to users of offshore tax havens.  This is normally true for UK businesses and resident individuals that try to reduce their UK tax by diverting profits from UK activities into offshore structures.  However overseas companies and their owners living outside ... read more

By Gordon Grieve
24th June 2011 15:43Despite increasing economic uncertainty across the globe, Australia remains a land of opportunity for offshore investment particularly in the energy and resources sector.  It's important that investors are aware that the sector currently faces the prospect of new taxes at the federal level and a likely increase of royalty imposts at the state level. ... read more

By Geoff Melamet and Pierre Gritti
26th May 2011 20:05Switzerland has become an increasingly important centre for the fiduciary industry least of all for its geographical position in the centre of Europe as well as for its established private banking and fiduciary sector.  The legislative and regulatory aspects are recognised by the administration.  Switzerland is well served by all the major banks which makes it easy to op ... read more

By Elias Neocleous and Philippos Aristotelous
26th May 2011 08:18Over the years Cyprus has developed into one of the world's leading locations for holding and finance companies.  Its myriad advantages include the transparent legal system, excellent communications and world-class professional and banking services.  The country is also an EU member state with an open market economy and no restrictions on capital movements. ... read more