Company News

The governments of the People’s Republic of China and the United Kingdom renewed their agreement for the avoidance of double taxation (new DTA) on June 27, updating the definition of a permanent establishment (PE) and revising withholding tax rates on dividends and royalties.

Last April, Vietnam’s Prime Minister executed a tax extension for small and medium-sized enterprises (SMEs) for 2010 corporate income taxes with the total amount of around VND7 trillion. The eligible enterprises for this incentive are about 200,000 of the total 360,000 small and medium enterprises currently operating in Vietnam.

On October 18, 2010, the State Council issued the Circular on Unifying the Systems for City Construction Tax and Educational Surcharge on Chinese- and Foreign-funded Enterprises and Individuals (guofa [2010] No. 35), which expanded the coverage of City Construction Tax (CCT) and Education Surcharge (ES) to include foreign invested enterprises, foreign enterprises and foreign individuals (“FIEs”) in addition to domestic enterprises.

The Competition Commission of India needs to be notified for all transactions involving mergers and acquisitions in the country – including pre-merger clearances. Since June 1, 2011 prior clearance from the CCI authorities is required if mergers or acquisitions result in a “combination” within the meaning of Sections 5(a), (b) and (c) (Combination) of the Competition Act and the Combination exceeds any of the thresholds of Section 5 of the Competition Act (Threshold Test).

On June 10, 2011, China’s Ministry of Human Resources and Social Security released two measures to the public for solicitation of opinions. The two draft measures were formulated based on the Social Insurance Law, which is set to take effect on July 1, 2011. The respective draft measures are discussed here.

On April 12, 2011, the State Administration of Taxation (“SAT”) issued the Circular on Relevant Issues Regarding the Administrative Regulations on the Trial Implementation of the “Comparison Prior to Deduction” Policy Applicable to the Special Letter of the Customs Import Value-Added Tax (“VAT”) Payment (“Customs’ Tax Payment Letter”) in Certain Areas (Guoshuihan [2011] No. 196, “Circular”).

On March 21, 2011, the Vietnamese Ministry of Industry and Trade (MoIT) issued a circular regulating the issuance of the certificate of origin (C/O) for goods being exported.

Jim Zimmerman, the China managing partner of U.S. blue chip law firm Squire Sanders Dempsey is a good friend of China Briefing and is also both the Chairman Emeritus of Amcham China and the author of the China Law Deskbook – considered by many to the bible of China law. Jim has recently introduced a monthly update service to the China Law Deskbook and has kindly given permission for China Briefing to host this each month.

Withholding tax is a government requirement for the payer of an item of income to withhold or deduct tax from the payment, and pay that tax to the government.

The Employees’ Provident Fund Organization is a legislative body of the Government of India under the Ministry of Labor and Employment. It manages a mandatory contributory Provident Fund (PF), pension and an insurance scheme for the Indian work force. It is one of the biggest social security units in the world in terms of members and volume of financial transactions.