Tax and accounting regulations
A coherent offshore tax planning strategy is essential to maximize the effectiveness of offshore companies. Eltoma can assist by structuring the most tax efficient strategy to satisfy your requirements. Eltoma will guide you as to which jurisdictions offer the best tax structure by identifying the types of tax payable as well as applicable exemptions and incentives. Eltoma will provide tax planning advice that will identify which is the most favourable tax efficient jurisdiction in which to incorporate.
The tax system in China has undergone massive changes in recent years and the Chinese Government. Keeping up to date with compliancy in such a dynamic environment is highly challenging.
Below is a summary of the main taxes to be considered although this is just an basic overview. For a detailed information package regarding tax and accounting regulations in China please contact Eltoma and we can provide the appropriate information for your situation.
There are 2 main taxes for WFOE and Joint Venture Companies in China:
- Turnover Tax (this includes Business Tax and VAT etc)
- Business Tax: Based on Turnover Tax the rate of 5-6% applies to the service orientated business.
- Based on the value added part of the products and applied to trading and manufacturing businesses. The rate is around 17%
Income Tax (Corporate Income Tax, Individual Income Tax etc)
- Corporate Income Tax – based on gross profit. Stands at approximately 25% nationwide.
- In the Special Economic Zone high technology business are entitled to tax incentives.
- As of January 1st 2009 industries in middle-western China can now qualify for tax incentives.
- Currently stands around 20%. The rate however is much lower under the DTA signed between China and other countries such as Hong Kong.
Representative Office Tax:
- This tax rate is based on expenses and not profit since it is prohibited for Representative Offices to undertake business activities which generate income. From March 2010 the rate is approximately 11%.
Enterprise Income Tax:
- This is 33% although the rate can be reduced to between 15-24% dependent on the location of the business
- WFOE – After tax clearance the profit is allowed to remit out of the country but prior approval from the State Administration of Foreign Exchange is require. Repatriation of the Registered Capital is forbidden during the agreed business term.
International Aspects of Taxation:
- Double Taxation Treaty – China provides numerous preferential treatments with regards to foreign taxation and has concluded tax treaties with more than 60 countries including; the UK, the USA, France, Australia, Cyprus, the Netherlands, Singapore, Germany, the UAE, Australia and New Zealand amongst others.
Annual Reporting Requirements:
- Any limited company in China is required to submit an annual audit report to the relevant authorities and an annual examination is required.
- WFOE - A monthly tax report is required to be submitted to the relevant tax authorities and within 3 months of the end of each calendar year the WFOE must undergo an annual inspection prior to which a local accounting firm must have conducted an audit.
- Representative Office – A quarterly tax report is required to be submitted to the relevant tax authorities
Crypto-currency Start-ups Buying False Reviews is Destablising Reputable Investment Sources
When cryptocurrency issuers want reviews for their coins, reports have surfaced that several prominent companies have been found offering money to advertisers in exchange for positive appraisals.
Is the Era of Shell Companies Coming to an End?
The Honourable Dr. Orlando Smith, Premier and Minister of Finance has announced that the BVI Government will take all reasonable steps to address European Union concerns about economic substance and a new Legislation is intended to be in force by the end of December 2018 in order to avoid the European Union Black List of Tax Heaven Jurisdictions.
Regulatory Update: BVI Economic Substance Act 2018
In 2016, the Council of the EU pledged to start advocating tax transparency and fairer taxation within Europe and consequently worldwide. After the EUs Code of Conduct Group (COCG) on taxation investigated BVI practices, they found a number of concerns regarding legitimate substance requirements for companies and limited partnerships doing business in and through BVI.
Information on the Payment of Cyprus Taxes for Pensions & Rental Income
Cyprus employees who are considered to have tax resident status, pay tax on their global income. Employees not considered to be tax resident are only charged for specific types of income that are originating from Cyprus-based sources.
Cyprus Regulatory Update: Shell Company Definition & Exceptions
The Central Bank of Cyprus has released new guidance for all credit institutions on the island, refining the definition for shell companies and subsidiary entities; coming into effect from November 2018, which are detailed as follows:
Singapore Variable Capital Company VCC: New Features & Benefits
The introduction of the VCC is a significant positive for the Singapore funds industry. Its aim is to retain Singapore as an attractive business destination and to keep investors wishing to domicile locally.
Consolidated Accounts for Hong Kong Companies: Subsidiary Requirements
As per Hong Kong company’s ordinance subdivision 3 section 379 subsection 1, a Company Director will have to prepare year-end financial accounts that comply with sections 380 and 383.
Challenges of Our Time: Cryptocurrencies & Their Regulation
The very concept of cryptocurrencies derives from technologies and the creation of alternatives to existing payment systems, which for the most part is caused by the negative consequences of financial crises and the injustice within the sphere of financial and legal regulation. Many people are convinced that the cryptocurrency is likely to become an alternative to the established global financial system and open new opportunities to those segments of the population and citizens of those countries that are deprived of the opportunity to work with the banking financial system.