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China's
Ministry of Finance (MoF) and the State Administration of Taxation
(SAT) issued a circular detailing Value Added Tax (VAT) incentives
for software products and clarified certain implementation issues.
Circular 100 which was released on October 13, 2011, will be
effective from January 1, 2011 retrospectively. As per an earlier
notice issued by the government, VAT can be charged at the full rate
of 17 percent by general taxpayers on the sale of software products
developed by them. If their VAT payable exceeds three percent of
their sales amount, then immediate VAT refunds can be obtained.
Software
products eligible for VAT
Software
products refer to information processing systems which include
computer software products, information systems and embedded software
products. The effort to clarify VAT incentives and VAT refund
calculation methods for software products will help boost investment
in the sector. However there is uncertainty on how the Corporate
Income Tax (CIT) will be calculated on the refund amount. While
Circular 25 stipulates that if a VAT refund is used for R&D it
will be treated as non-taxable revenue for Corporate Income Tax
(CIT), Circular 100, does not specify how CIT will play out on the
VAT refunds.
Circular
4 was aimed at encouraging the development of China’s software and
semiconductor industries which have been enjoying various tax
incentives since the mid-1980s. However, they have not been very
successful in claiming VAT refunds as the scope of products that are
eligible for VAT was not well defined by the government. Circular 100
enables these sectors to claim VAT refunds to a certain extent.
VAT
Program in Shanghai
Starting
January 1, 2012, in an effort to invigorate certain industry sectors,
the Chinese government will be introducing VAT as a pilot program in
Shanghai. The targeted industry sectors are transportation and
"certain modern services". The State Council has been
implementing incremental reforms since many years to replace Business
Tax (BT) with Value Added Tax (VAT) in the PRC. The new applicable
VAT rates are 11 percent and six percent, although it is still
unclear as to what type of services will be subject to these new
rates.
When
doing
business overseasfinancial
benefits can be a critical factor. The objective of any business is
no doubt making profits. With any incentives that a government
offers, it becomes more attractive for a company to set up a
business there. Partnering
with an expert can help tremendously in understanding the
complexities of taxation be it VAT or global
transfer pricing,
or regulatory filings.
Click
here for more on :-international
expansion&
international
accounting
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With
a well-developed infrastructure and great support services, the Irish
government has a made Ireland an appealing place to expand your
business into. The competitive operating costs, low corporate taxes
and financial incentives make it one of the most lucrative places in
Europe for foreign investment. With effect from January 1, 2012,
certain businesses in Ireland will enjoy a reduction in the frequency
with which they file their tax returns and pay taxes.
Taxes
may be paid and VAT returns may be filed every six months by
businesses making total annual VAT payments of less than EUR 3,000.
Businesses making total annual VAT payments between EUR 3,000 and EUR
14,400 can do so every four months. Business organizations with total
annual PAYE (Pay As You Earn)/Pay-Related Social Insurance (PRSI)
payments of up to EUR 28,800 will be allowed to make payments every 3
months.
The
EUR 28,800 cap also applies to Relevant Contracts Tax (RCT).
Businesses with total annual RCT payments of up to EUR 28,800 may
file RCT returns and make payments on a quarterly basis.
The
Revenue will make the new procedures available to eligible businesses
and confirm if the relaxed rules apply to them with effect from
January, 1, 2012.
With
the exception of PAYE/PRSI payers, the Revenue will also notify the
tax agent or practitioner of eligible businesses.
Revenue
Online System (ROS) Registration
Starting
January 1 2012, all RCT compliance, filing and payments will be
processed online using the Revenue Online System (ROS). Principal
contractors need to make sure they are registered to use the ROS
facility. Subcontractors also have to register for ROS to access
details regarding their RCT transactions.
Employ
the services of an expert
Tax
measures in Ireland have been used as a way of accommodating the
creation and expansion of businesses. In any international
expansion,
it is always good do a thorough market research. Although Ireland is
one of the easier countries to expand into, taking the help of an
expert can definitely make things much smoother. A reliable partner
can offer specialist expertise advice on all the aspects of taxation
as they will be abreast of all the latest rules and regulations. They
also have the necessary expertise to assist you in the overall
operational, administrational and executive aspects of your business,
be it legal, HR, Payroll, international
accountingor
EU
VAT rules.
Click
here for more on transfer
pricing audit&
International
accounting services
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The import VAT exemption to foreign-funded Research and Development centers includes independent legal entities, R&D departments or R&D branches of foreign-invested companies provided certain conditions are met.
Chinese authorities have recently announced that the import tax exemption on purchases of certain R&D equipment and devices by foreign invested R&D centers would continue.
Circular 88 released jointly by The Ministry of Finance (MoF), the Ministry of Commerce (MOFCOM), the General Administration of Customs (GAC) and the State Administration of Taxation (SAT) also confirmed the extension of Value Added Tax (VAT) refund on purchase of domestically-manufactured equipment available for domestic and foreign invested R&D institutions. The circular is effective from 1 January 2011 to 31 December 2015.
Criteria for foreign invested R&D centers that qualify for tax incentives
- The status of qualified R&D centers to be reviewed and verified by the department of commerce and other relevant departments.
- Total investment is the total amount of investment as specified in the approval certificate of the foreign investment enterprise (FIE).
- Total R&D contribution refers to the FIE's investment in assets for the establishment and development of the R&D centre. This also includes assets to be delivered pursuant to executed purchase contracts. The lists of purchased assets and contracts for assets to be purchased have to be provided to the approving authorities.
- Average “Annual R&D expenditures incurred for R&D activities during the most recent two fiscal years needs to be calculated. Expenditures either in cash and contribution in kind for R&D activities should not be less than 60% of the total R&D expenditures.
- 'Full time R&D personnel' refers to full time R&D personnel involved in basic research, application research and experimental development. This also includes (a) personnel directly involved in the above mentioned activities; (b) full time technology personnel; (c) personnel involved in preparing research related documents, supplying materials and equipment. All the above personnel need to have employment contracts with the R&D centre or the FIE with a term of more than one year.
When doing business overseas, financial benefits play a significant role. Every business is looking at making a profit, and when the government offers an incentive, it makes it a lucrative proposition to set up a business in a particular country. Taking the help of a business expert can be of immense help as they have the essential expertise to deal with matters pertaining to taxation, HR, legal expat tax advice or regulatory filings.
Click here for more on global transfer pricing & internal compliance audit
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China has tightened the procedures for setting up and renewal of foreign company Representative Office (RO) and stipulates stricter supervision of rep office operations. For multinationals, this means increased compliance efforts and costs for setting up and renewal of their RO or rep office in China. Representative Offices also need to be more vigilant in ensuring they operate within the limits of permissible activities and comply with all registration terms as the new provisions enhance the powers of the authorities when dealing with illegal cases. In a company international expansion, most companies face increased paperwork as a series of documents need to be notarized and authenticated when the rep office applies for renewal, especially in pilot cities like Shanghai. Further, the notice permits setting up of rep office only for companies existing for more than two years. The representative office term of duration has decreased and will need to renew their registration certificate every year as against the earlier permissible term of three years. For existing rep offices, the one year limit begins when they apply for renewal upon expiry of their existing term. The cap on Number of Representatives is restricted to four. Existing ROs that already have more than four representatives may not need to prune their staff but cannot add to that number. The local officials require authorities are required to conduct on-site verification of legal address and other Representative Office registration items. This has to be done within three months of the Representative Office obtaining its registration certificate. Any unreported change of address is subject to penalty and the rep office may even be blacklisted in non-compliance records. Additionally, in certain pilot cities, e.g. a Representative Office in Shanghai, office space must be rented in a Grade-A building, which essentially refers to a high-standard building.In any international business expansion, establishing a representative office has conventionally been a reasonably quick and inexpensive way for foreign companies to gain a presence in China, promote themselves and explore additional investment opportunities. There is no capital requirement and, aside from registration with the local branch, no separate approval process, as is the case with legal entities. The new rules indicate an intention to tighten the existing regulatory regime, with increased scrutiny on compliance. In an international expansion, foreign companies will need to consider the implications of this for the structuring and establishment of new representative offices, as well as the ongoing operations of any existing representative offices they have.Click here for more on international accounts payable, eu vat rules & transfer pricing audit
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Greece might not be in the same sphere with the European giants, in terms of a flourishing economy but then we must realize that not every country would be like a European giant. The country ranks 109 out of 183 countries round the globe and has witnessed economic fluctuations owing to the recent economic downswing and political complexities. However, that does stop an entrepreneur from planning to expand his business here as the state of affairs has improved manifold and the government is taking initiatives to reform the country.Why expand your business in Greece?It is said that, Greece would take time to match up to the level of Germany in terms of business and commerce, yet it does well for people who want to expand their business here with its attractive and soothing climate. This draws in the foreign investors to the country. As long as the price is attractive, British services and products have a good image with Greece. The principal economy here is travel and tourism. You will find tourists from round the globe visiting the country to explore its rich culture depicted in the archaic museums, being a part of the archeological sites, monuments or just to sooth themselves along the breathtaking coastline.What are the prospective business opportunities?Greece being the UK’s 30th largest export market, foreign investors have a huge scope in expanding their business here. The general standard of living is high and the economy is fast expanding, this gives a boost to the foreign investor. However, a well-researched market analysis will make it possible for you to thrive in any aggressive or passive marketplace anywhere. This apart, an expert guidance would also be helpful when you are expanding business overseas.Greece has immense scope for British services and goods that are gradually shifting towards public-private alliances and privatization. This is indeed a positive sign. Incorporating or licensing a business in this country is yet another option. Selected sectors that have done excellently well and hold prospect for anyone interested in doing business overseas are, travel and tourism, healthcare, security services, construction enterprises, food and drink, financial services, ports, environment and energy conservation.Do you need the help of an expert?Even the most comprehensive business expansion plan seeks expert guidance for an affirmation. An expert business consultant will help in improving the overall performance of your enterprise. They are helpful for the expertise they share on taxation, market entry, international accounting, expat tax advice and many others. Furthermore, they offer you useful advice guidance on the entire administration, executive and operational segments of the business. No matter whichever business you choose to expand a consultant is always beneficial.Also read on - sas compliance, International accounting services
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Japan is enjoying a period of sustained economic growth, although modest, that is largely fueled by domestic demand, and buffeted by strong export sales. The economy has shown tremendous resiliency in dealing with global economic concerns. A quick glance at the special tax rates for SMBsThe Amended Tax Reform Bill includes Corporate Tax rates that were approved and effective on June 30, 2011, given that the proposed Tax Reform Bill was not passed in its original form.The main changes under the amended Tax Reform Bill stated that the expiration dates of the Special Tax Measures Law which had been extended by 3 months (i.e. from March 31 2011 to 30 June 2011) by the Stopgap Bill are further extended. Accordingly, the reduced corporate tax rate (18%) for a small/medium-sized company (share capital less than or equal to JPY 100 million) will be extended. The tax reform bill also states that companies filing blue tax returns and satisfying certain conditions can claim special tax credits of JPY 200,000 for the net increase in the number of each employee. The benefit will be applicable to the company for fiscal years commencing between April 1, 2011 and March 31, 2014.The Tax Reform Bill is also inclusive of
- Amendment to employment income deduction rules
- Amendment to taxation of retirement income
- Repealing allowances for adult dependents
International TaxWith regard to the foreign tax credit, the June Bill affirmed that where the applicable tax rates vary depending on an agreement with local taxing authorities, any taxes in excess of the amount computed using the lowest applicable rate can be excluded for purposes of the foreign tax credit computation or the anti-tax haven rules. The amendment is effective after June 30, 2011. And also for the purpose of computing foreign tax credit limitation, income of a corporation which may be taxed in a foreign country in accordance with the tax treaty from Japan and that foreign country shall generally be deemed to be treated as foreign source income for fiscal years starting on or after April 1, 2011. Corporate Tax
- Reduction of corporate income tax rate
- Review of the net operating loss carry-forward rule
- Amendment of the depreciation provisions
- Amendment of bad debt reserves
While expanding business overseas, corporate tax returns and financial statements need to be prepared on different computational bases. This can pose a challenge to companies operating overseas since the criteria for corporate tax compliance vary from country to country. Companies also need accurate international corporate tax provisioning accruals to be made, which can be done with ease with a help of a business partner, who can also provide assistance in other areas of business like expat tax advice, international accounting, HR etc,Also read on - Intercompany transfer pricing, sas compliance
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Japan is enjoying a period of sustained economic growth, although modest, that is largely fueled by domestic demand, and buffeted by strong export sales. The economy has shown tremendous resiliency in dealing with global economic concerns. A quick glance at the special tax rates for SMBsThe Amended Tax Reform Bill includes Corporate Tax rates that were approved and effective on June 30, 2011, given that the proposed Tax Reform Bill was not passed in its original form.The main changes under the amended Tax Reform Bill stated that the expiration dates of the Special Tax Measures Law which had been extended by 3 months (i.e. from March 31 2011 to 30 June 2011) by the Stopgap Bill are further extended. Accordingly, the reduced corporate tax rate (18%) for a small/medium-sized company (share capital less than or equal to JPY 100 million) will be extended. The tax reform bill also states that companies filing blue tax returns and satisfying certain conditions can claim special tax credits of JPY 200,000 for the net increase in the number of each employee. The benefit will be applicable to the company for fiscal years commencing between April 1, 2011 and March 31, 2014.The Tax Reform Bill is also inclusive of
- Amendment to employment income deduction rules
- Amendment to taxation of retirement income
- Repealing allowances for adult dependents
International TaxWith regard to the foreign tax credit, the June Bill affirmed that where the applicable tax rates vary depending on an agreement with local taxing authorities, any taxes in excess of the amount computed using the lowest applicable rate can be excluded for purposes of the foreign tax credit computation or the anti-tax haven rules. The amendment is effective after June 30, 2011. And also for the purpose of computing foreign tax credit limitation, income of a corporation which may be taxed in a foreign country in accordance with the tax treaty from Japan and that foreign country shall generally be deemed to be treated as foreign source income for fiscal years starting on or after April 1, 2011. Corporate Tax
- Reduction of corporate income tax rate
- Review of the net operating loss carry-forward rule
- Amendment of the depreciation provisions
- Amendment of bad debt reserves
While expanding business overseas, corporate tax returns and financial statements need to be prepared on different computational bases. This can pose a challenge to companies operating overseas since the criteria for corporate tax compliance vary from country to country. Companies also need accurate international corporate tax provisioning accruals to be made, which can be done with ease with a help of a business partner, who can also provide assistance in other areas of business like expat tax advice, international accounting, HR etc,Also read on - Intercompany transfer pricing, sas compliance
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Poland is one of the most attractive locations for foreign investments as it has an abundance of natural resources and a variety of highly profitable options. Although the country may not have had a sound economy in the past, it continues to grow after joining the EU. Poland now enjoys a reputation as one of the quickest growing countries in Central Europe, making it the largest market among the start-up EU countries.When doing business overseas, it is always good to know the essentials of the country. There is a large influence of Germany as there a lot of similarities with the systems of law of these two countries. In the year 2001, the Polish Commercial Companies Code was established. This code draws a lot of experience from the economically advanced countries like Germany. Being under the Europe Agreement, the code had to be in accordance to the European law. Labor laws need to be adhered to by all business entities in Poland, and there is also a minimum wage requirement that needs to be followed.The main areas of businessThe primary exporting commodities here are Machinery and transport equipment, Intermediate manufactured goods, Miscellaneous manufactured goods, Food and live animals. The main industries in Poland include Machine building, Iron and steel, Coal mining, Chemicals, Shipbuilding, Food processing, Glass, Beverage and Textiles.Funding a business in PolandObtaining finance when starting a business venture in a foreign location can be extremely overwhelming. It could be essential to know that that there are more than 450 funding sources for reimbursable grants, aid schemes, individual fellow and traineeships, loans and guarantees in the EU. Depending on the type of business you set up, it is also possible to float your company on the stock market.Knowing the Economic zonesThere are numerous incentives and tax breaks for investors operating in special zones. The most significant ones involve a fractional or a total exemption from corporate income tax on revenue coming from business operations carried out in a given zone. After meeting the initial criteria, an investor can obtain a permit for conducting business operations in a zone. There is a warrant that is granted by the zone’s management, while the procedure to acquire a permit differs from one zone to another.Overcoming the Challenges Foreign Companies FaceAlthough there are a number of encouraging reasons for starting a business in Poland, it is very necessary to have a thorough market research and a well constructed business plan in a business expansion. Partnering with a professional expert can be major boost as you can get guidance in developing a good business plan that encompasses objectives and forecasts. By employing a professional advisor you can get expert assistance on tax regulations, international financial accounting, regulatory filings, and be assured that your business operations are devoid of any obvious hurdles.Read more on - Expat tax advice, sas compliance
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With robust international relationships, a skilled workforce, low corporate tax rates and a near absence of bureaucracy, Sweden is one of the biggest beneficiaries of foreign investment. There are very few countries with as many multinational businesses as Sweden. It has achieved an enviable standard of living under a system of high-tech capitalism heavily oriented toward foreign trade and is the easiest and most efficient country in Europe to start new enterprises in, mainly because of a low bureaucracy and quick processing times.Why Sweden?Sweden maintains a very competitive position in the global economy. As the business here is eclectic, it encompasses world class multinationals, middleweight companies that range over a large number of sectors. Sweden has a strong tradition in exports, making the corporate environment highly international. The country has an unexploited market with strong sales potential, and this can be quite appealing to many foreign investors who are interested in doing business here. The market here is easily the largest in Scandinavia and is an essential constituent of the European Union marketplace. The purchasing power per capita is higher than both Germany and France, making Sweden a lucrative proposition.A quick glance at the economic climateThe economy of Sweden is dependent on a highly developed and internationally successful industrial sector. Most of the flagship companies are totally or partially owned by foreign companies and shareholders. Owing to a rapidly rising discretionary income, increasing employment and a steely wealth position, spending is likely to get considerably better. Strong finances in the local government sector are accelerating growth in the sector's consumption.The main business opportunitiesThe country is a favored location for operations needing skilled labor, such as advanced production, high technology, research and development, and for corporations requiring experience from international management. The other opportunities here are in education, food and health, renewable energy, security, healthcare, textile and clothing, tourism, etc.Understanding the market in SwedenThe Swedish industry is modern, quality-orientated with advanced technology, continual product development and a strong environmental awareness. The industry is highly international, in the supply of base materials, product adaptation, product collaboration, marketing and export.Overcoming the challenges
Starting up in a new business country involves striking the right balance between cost and risk. And it is therefore important to assess the challenges that need to be overcome while starting such a venture. When doing business overseas, the fear of the unknown is inherent. Expanding business overseas can be extremely overwhelming with a large number of taxing regulations, labor laws, stock options, etc that need to be dealt with. A trusted professional partner can help over any business difficulties that may come your way. You can get the best advice in various areas like sas 70 compliance, regulatory filings, international accounting, among the other services. Know more on - International accounting, Financial reporting international
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With huge potential, Mexico is a country that has demonstrated predictable, stable economic growth. It’s a land of cultural tapestry and a canvass of opportunity, being America's neighbor to the south and Guatemala's northern rock. Mexico is a delicate balance of history and innovation. There has been substantial improvement in ‘The United Mexican states’, (official name of the country).Expanding to Mexico could be the Business Move of a LifetimeAs Mexico enjoys the close proximity of two continental markets, it is surrounded by distinctly developed and excitable emerging economies. The country ranks in the best top three emerging markets in which business can be done. Mexico has more free trade agreements than any other nation in the world: 12 bilateral agreements with over 43 countries. There are vast opportunities for foreign investors who are interested in conducting business here. With analysts predicting that the economy will be larger than the UK by 2040, Mexico has a dynamic market. So as a businessman, your transitional timing cannot be better.Understanding the Economic Climate in MexicoWhen doing business overseas, it is important to study the economic situation before expanding there. Mexico is the largest trading nation in Latin America, and one of the world’s top fifteen trading nations. The country has high levels of foreign direct investment with its GDP growing steadily. The GDP has been driven by Mexico's competitive production costs, and its membership of the North American Free Trade Agreement (NAFTA). As the economy has grown so has the demand for imports. Mexico has reached a level of political maturity and economic stability that makes it a more attractive place to do business than other developing countriesThe Mexican Foreign Investment LawIn order to reduce delays in the processing of many government business requirements there were new amendments to the Mexican foreign investment law. The law also promotes foreign investments, provides added security to foreigners investing in Mexico and also simplifies the procedures for investments here.Exploring the Business OpportunitiesThe main industrial sectors are the automotive industry, whose standards of quality are internationally recognized, cement production, the alcohol beverage industries and high-tech industrial production. Mexico is also the sixth largest oil producer in the world and the eighteenth in gas production. Tourism is a huge industry, with the popular beach resorts. Are there Challenges?Expanding business overseas can be complex. In Mexico besides the obvious language and cultural barriers, there is also Mexican bureaucracy, labor laws and a complicated tax regime that can be tremendously challenging. It is best to seek the advice of an expert to avoid costly mistakes in future. A business expert can provide specialist expertise in market entry, labor laws, international accounting, and also provide valuable advice on the overall operational, administrational and executive aspects of your business.Know more: Regulatory filings
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