Tax – Newsflash September 2014

Tax – Newsflash September 2014


25th September 2014 - Cosmetic market in Asia  (L. Riccardi, A. Kung)

The cosmetic sector on the Chinese mainland has been growing at a fast pace in tandem with the rapid development of the Chinese economy in recent years. Chinese cosmetics and toiletries market is the second largest in the Asia-Pacific region after Japan and third largest in the world.

Taking the whole cosmetics market into consideration, one will find that domestic players account for less than 20% of the market while foreign-invested enterprises and joint ventures take the largest share (80%).

Date: 25th September 2014 – Time: 18:00, 4th Floor, Fesco-Adecco Building, No. 28 South ZhongShan Road, Shanghai 200010, P.R.C.

1st October 2014 - PRC Tax Update (L. Riccardi)

For more than 30 years since the beginning of the reform and opening up, the taxation system of China has gone through several major reforms, and been improving day by day. In the early days of the reform and opening up, the adaptation to the requirements of opening up and the establishment of foreign-related taxation system are made as the breakthrough points of tax reform.

Date: 1st October 2014 – Time: 15:00/17:00, Ordine Dottori Commercialisti, Rotonda dei Mille 2, 24122 Bergamo

2nd October 2014, Italian Design Goes to China, Milan, Italy

Italian design arrived as a fashion symbol in Asia in the 19th century when the introduction of some of the continent’s most magnificent structures were built. this was the beginning of setting a scene for a marketplace During the meeting the participants will share experience and ideas on the success of Italian Design in China, the second largest economy in the world.

Studio Azzurro Produzioni via Procaccini, 4 c.o. La Fabbrica del Vapore. 20154 Milano Italia

H 15:30

9th October 2014 - Vietnam Cooperation and Networking (L. Riccardi)

Vietnam has been remarkably successful over the last decade or so in attracting substantial foreign direct investment (FDI) inflows.  

Various economic reform and business liberalization commitments that Vietnam has already made – such as those under the ASEAN Investment Area (primarily relating to national treatment issues), conditions set as part of the current IMF lending programme, and the US bilateral trade deal (which is much more than just a trade deal) – according to agreed timetables, will help promote the sorts of positive changes to the host country business environment that will be welcomed by foreign (and local) investors.

Date: 9th October 2014, Consolato della Repubblica Socialista del Vietnam, Via Federico Campana 24, 10125 Turin, h 14:30

22nd November 2014 - Taxation in China (L. Riccardi)

Taxes provide the most important revenue source for the Government of the People's Republic of China. As the most important source of fiscal revenue, tax is a key component of macro-economic policy, and greatly affects China's economic and social development.

With the changes made since the 1994 tax reform, China has preliminarily set up a streamlined tax system geared to the socialist market economy

Date: 22nd November 2014, Shanghai Jiao Tong University, Shanghai, China


China - Tax authorities survey taxpayers on service fees and royalties to foreign related parties.

China’s tax authorities are surveying taxpayers that paid service fees and royalties to their foreign related parties in the last ten years (2004-2013).

As a result of these surveys, transfer-pricing audits may potentially be triggered with respect to these related-party transactions.

The State Administration of Taxation instructed tax bureaus across China to survey and report back to it, by September 2014, regarding companies within their jurisdictions that made service fees or royalty payments to related parties during the 10 years period under analysis.

The time span of this activity has been defined according to the statute of limitations for transfer pricing in China, which states that potential tax adjustments can be performed within ten years.

Vietnam - Foreign direct investments to be limited by foreign exchange control rules

Foreign exchange control rules with respect to foreign direct investments made in Vietnam have been established by a recent guidance issued by the State Bank of Vietnam.

Circular 19 (11 August 2014) is effective 22 September 2014, and states that:

Resident Vietnamese investors in foreign invested enterprises can make capital contributions in foreign currency from their own legitimate sources.

Foreign invested enterprises and foreign investors with business cooperation contracts must open a “direct investment capital account” in foreign currency or in Vietnamese dong (VND) at an authorized bank to be able to conduct direct investment activities in Vietnam,

By March 2015, foreign invested enterprises must convert their existing specialized capital accounts to a “direct investment capital account.”

China – The new Regulation for the Shanghai pilot free trade zone

The first local regulation providing guidance for the Shanghai pilot free trade zone is effective 1 August 2014.

To promote construction of the free trade zone, the regulation outlines the management system, openness to investment, trade facilitation, financial service, taxation management, comprehensive supervision and legal environment. It not only summarizes existing rules for the free trade zone, but the regulation also provides the legal framework for reform of the free trade zone.

China – Draft Guidance for GAAR

China’s State Administration of Taxation released draft guidance regarding the general anti-avoidance rule (GAAR) measures.

The draft GAAR administrative measures, when finalized, would provide guidance in various areas, including:

When a tax avoidance scheme would be considered as a GAAR case

Documentation requested from taxpayers by the tax authority

Measures of tax adjustment

The draft GAAR administrative measures should provide a greater degree of transparency regarding the procedures for conducting GAAR cases. Yet, this process arguably would broaden the types of transactions “caught” in the GAAR net.