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CIL观点 《CIL观点》历史存档与订阅 CIL Newsletter | January,2010 | English Version
CIL观点 《CIL观点》历史存档与订阅 CIL Newsletter | January,2010 | English Version
CIL Newsletter | January,2010 | English Version
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---- New Individual Income Tax Circular in China ——related to the transfer of restricted shares of a listed company From January 1, 2010, any individual’s income from the selling of restricted shares of a listed company is subject to the individual income tax at a proportional tax rate of 20%. The withholding agent is the securities firm where such individual opens securities investment account. This policy will surely have great influence on the individual founders and senior executives of listed companies that hold the listed company’s shares. However, this new circular is only subject to selling of restricted shares. If you need know more, please contact CIL for more information.
 ---- Enterprise Income Tax New Issues ——related to the transfer of equity interests in PRC target companies by non-resident enterprises The Enterprise Income TaxEIT Circular is effective in January 1, 2008. Indirect Equity Transfer of PRC Company by non-resident enterprises(NRE) subject to Scrutiny of PRC Tax Authorities. Offshore Equity Transfer need be reported to PRC Tax Authorities according to the EIT Circular. When the foreign actual controller of a PRC company in which such foreign investor invests through a SPV transfers the equity interests held by it through a complete offshore M&A, i.e., transferring the equity interests of such company’s offshore shareholder outside China, and if the SPV is located in a tax jurisdiction with an effective tax rate of lower than 12.5%, or a tax jurisdiction which exempts income tax on foreign-derived gains for its tax residents, the selling party should submit certain documents to the local PRC tax authority where the PRC company is located within 30 days after the execution of the equity transfer agreement. The documents required are mainly about the SPV.s status and its relationship with the Chinese company and the foreign actual controller. According to the EIT Circular, strictly speaking, SPVs. should include all levels of entities between the foreign actual controller and the Chinese company. The requirement to disclose all of the information concerning the transactions may create an enormous burden to the selling party, especially in a global M&A. However, given the new issue but lack of explanatory rules, it is not clear now how the PRC tax authorities will implement the EIT Circular in practice. If you need know more, please contact CIL for more information.
---- BVI Companies Given the Green Light to List in Hong Kong On 15 December 2009, the Stock Exchange of Hong Kong Limited (“HKSE”) amended its “List of Acceptable Overseas jurisdictions” to allow companies incorporated in the British Virgin Islands (“BVI”) to list in Hong Kong. The move significantly simplifies the process for BVI companies looking to list in Hong Kong. Previously, BVI-incorporated companies had to set up a separate holding vehicle in another recognized jurisdiction in order to list on the HKSE. Investors in BVI-incorporated companies now have a cost-efficient exit strategy, particularly as the incorporation costs and legal fees connected with a company in the BVI are cheaper than for comparable companies in Bermuda and the Cayman Islands. If you need know more, please contact CIL for more information. For details, please visit CIL's Web,or call :400-880-8123 For further information.
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CHINA INCORPORATIONS LIMITED |
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