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Retrospective Taxation – Probably Not Applicable to Most Foreign M&A Deals
Foreign investors have been wary of investing in India since the beginning of the year after the budget introduced the General Anti-Avoidance Rules, or GAAR, and retrospectively changed the income tax law.
Morgan Stanley Obtains Indian Banking License
The Reserve Bank of India has granted the U.S. financial institution Morgan Stanley a banking license. The bank, one of the largest players in global M&A and advisory services, is expected to use its license to lend to corporate clients when advising on takeovers involving Indian entities.
India Issues Re-Assurances over Tax and Retroactive Legislation
India’s Finance Minister Pranab Mukherjee has scotched media reports concerning the intentions of India’s new tax regulations, and has pulled back on GAAR (general anti-avoidance regulations) until April 2013.
China Clarifies Pre-Tax Deduction Policies for Advertising and Promotional Expenses
China’s Ministry of Finance (MOF) and the State Administration of Taxation (SAT) jointly released the “Circular Regarding Pre-tax Deduction Policies on Advertising and Business Promotion Expenses (caishui[2012] No.28, hereinafter referred to as ‘Circular’)”on May 30, which is retroactively effective from January 1, 2011 and will remain in effect through December 31, 2015.
Hong Kong Amends Mandatory Contribution Levels for MPF
Hong Kong has recently passed legislation that will amend the maximum level of relevant income for compulsory Mandatory Provident Fund (MPF) contributions, effective from June 1, 2012, according to an announcement on the MPF Authority’s official website.
China Issues Regulations on Foreign Labor Service Cooperation
In order to regulate foreign labor service cooperation and legitimatize laborers’ rights, China’s State Council approved the “Administrative Regulations on Foreign Labor Service Cooperation ([2012] No. 620, hereinafter referred as the ‘Regulations’)” on May 16. The Regulations will come into effect on August 1, 2012.
China Clarifies Use of Special VAT Invoices for Export Tax Refunds
To clarify issues that occur when foreign-trade enterprises apply for export tax refunds using special value-added tax (VAT) invoices which have been approved as input VAT creditable, the State Administration of Taxation (SAT) promulgated the “Announcement on Issues Concerning Applying for Export Rebates by Foreign Trade Enterprises Using Special Value-added Tax Invoice (SAT Announcement [2012] No. 22, hereinafter referred to as ‘Announcement’).”
Nationality Row over Qualifications for China Lawyers
China’s Ministry of Justice is coming under the spotlight as are the roles of foreign lawyers in China following a case involving PRC-educated and qualified lawyer Stanley Cha, formerly of King & Wood, The Lawyer magazine has reported.
Foreign-Trade Enterprises Can Still Apply for Input VAT Credit Certificates
China’s State Administration of Taxation (SAT) issued an Announcement on May 25 extending the time for which an enterprise engaged in foreign trade (“foreign-trade enterprise”) can apply for a certificate claiming input VAT credit.
China Clarifies Individual Income Tax for Work-Related Injury Compensation
In order to fully implement the “Regulation on Work-Related Injury Insurances (Order of the State Council No.586, hereinafter referred as the ‘Regulation’),” the Chinese government issued the “Notice on Issues Regarding Individual Income Tax for Compensations of Work-Related Injury Insurances (caishui[2012] No.40, hereinafter referred as the ‘Notice’)” on May 3, 2012 in accordance with the income tax exempt items in Article 4 of Individual Income Tax Law of the People’s Republic of China.
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