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Overcoming the Practical Challenges in Moving Funds In and Out of China (Case Study Approach)

Complying with the New Developments in China Tax and Foreign Exchange Controls

Expert Speaker Bolivia Cheung

$898.80 (including GST)

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EARLY BIRD SPECIAL: Save 10% when you register by 22 Jul 2019. Use code JUL19 at checkout.

Overview

If you have Chinese subsidiaries or Joint Ventures in China, you may have heard from your Chinese counterparts that the Chinese Tax Authorities do not allow charging of management fee. How true is this?

Cross-border remittances is a real challenge in China. To monitor and control cross-border remittances, the Chinese government is using the help of big data.

In this highly practical workshop, our experienced speaker will share what the real hurdles on remittances are and will discuss the practical cases and solutions available when moving funds in and out of China. This includes compliance with the recent developments in China tax and foreign exchange control affecting cross-border remittances. She will also explain the Foreign Exchange Handbook on Capital Account Items (2017 edition) for your practical application.

Practical case examples will be shared during each section of the course, so that participants will have a good appreciation and understanding of the real life challenges faced by Singapore companies. Practical solutions will also be demonstrated to help you overcome these challenges.

What You Will Learn

At the end of this workshop, you will:

  • Be updated and compliant to the new developments in China tax and foreign exchange controls
  • Learn the common practical challenges faced when moving funds in and out of China
  • Find out the role of big data on China’s cross-border remittances
  • Benefit from the lessons learnt from multiple real life case examples on doing business in China
  • Be able to successfully conduct business and funds transfer in and out of China

Programme Outline

Who Should Bear the China Taxes?

  • As a service provider in Singapore, your Chinese customers told that there would be VAT and withholding tax when remitting funds from China and asked you to bear all the taxes.   However, in reality, the Chinese Co can claim input VAT credit on the VAT withheld.  Is this a lack of knowledge on the tax rules or the Chinese customer wants to shift the tax burden to you? 
  • What is the strategy to negotiate with the Chinese Co to shift back the VAT to them?
  • If the contract did not state, what are the taxes which should be borne by the Singapore Co?

 

Management Fee Charged by Singapore Holding Co. to China subsidiaries

  • What are the types of charges from overseas related companies that can be deductible? What are the required supporting documents?
  • The Supreme Court of China recently announced that the minority shareholders can sue the shareholder which was considered as shifting profit away from China via transfer pricing.  How will this affect cross-border charges from a joint venture?
  • What are the information to be disclosed to the tax authorities during the annual Enterprise Income Tax filing on related parties’ transactions?
  • What are the procedures which the Chinese subsidiaries should go through in order to remit the charges out?

 

Cost Sharing – IT fee

  • How can we make the sharing of IT charges (e.g. Enterprise Resource Planning system) possible from tax and foreign exchange perspectives?

 

Cost Sharing – Salaries

  • Why is the sharing of salaries not possible?
  • Can this be restructured in order to charge cost to Chinese subsidiaries?

 

Patent and Design Fees Charged to China Subsidiaries

  • Why patent fees may be subject to customs duty and a further VAT of 13%? 
  • Which types of design fees will be taxed as royalty and which can be taxed as service fee? What are the differences in the China tax implications? 

Reimbursement of Expenses

  • What are the pitfalls of such reimbursements?
  • What are the correct ways to handle such payments?

 

Reduction of Dividend Withholding tax

  • Structuring the investment in China through a BVI company
  • What are the new changes in determining whether the overseas investor can qualify as the beneficial owner under treaty and hence enjoying the reduced withholding tax rate of 5%?
  • How can a Singapore Company get the refund of withholding tax paid in prior years?

 

Disposal of Chinese Investment to a Chinese Buyer

  • What are the procedures for the Group to receive money from the Chinese buyer?
  • What are the taxes payable on the sale of shares of a Wholly Foreign Owned Enterprise (WFOE)?
  • Will it be better to structure the sale as an asset deal?

 

Remitting Surplus Funds from China

  • What are the possible alternatives for a WFOE to transfer funds to overseas for usage by the overseas affiliates?
  • What are the tax implications?

 

Transfer Pricing Adjustments

  • What are the possible alternatives to make transfer pricing adjustments in China?
  • What are the possible pitfalls in engaging a China tax consultant?

 

Back-office in China

  • The Chinese subsidiary provides back-office functions for the overseas group companies.  Services include QA/QC, following up with the factories of China, monitoring the payments etc.  Chinese Co received service fee from overseas.  How to structure the transaction in order to get VAT exemption on the service fee received by the Chinese Co?

 

Recent Developments

  • The Tax Risk Defensive (TRD) System can link the ERP with the tax bureau Golden Tax 3.  The tax bureau can have full access to the transactions of the company.  TRD is still on a pilot stage.  What should be done before the implementation of full TRD in China?
  • How does the Big Data in China affect tax and foreign exchange administrations?
  • Explanation on how to use the Foreign Exchange Handbook on Capital Account Items for loan registration, calculation of foreign loan quota, lending overseas, guarantees etc

Target Audience

  • CEOs, CFOs
  • Regional Managers/Directors
  • Tax Managers/Professionals
  • Financial Controllers/Finance Directors/ Finance Managers
  • Accountants

Expert Speaker

Bolivia Cheung

FCCA , FCPA

 

Bolivia has more than 20 years of experience in China tax and business advisory.  She had spent 15 years in KPMG, before retiring as a Tax Partner in 2011.

Having stationed in Guangzhou and Shanghai for over 8 years, she has vast experience in helping clients deal with their tax problems and challenges

 

Bolivia is currently a member of the ACCA China Forum, and was also in the Steering Team of ACCA Southern China from 2004 to 2017. She is a Member of Working Party on Seminars of Accountancy Training Board of Hong Kong Vocational Training Council, and also a Member of the Customer Liaison Group for SMEs of the Trade and Industry Department of the Hong Kong SAR. She also lectures on China Tax in Universities and Institutions in Macau, Hong Kong and China.

Enquiries: email sg-events@wolterskluwer.com

EAR

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