Tax & Accounting
DALIAN – The new issue of Asia Briefing Magazine, title Payroll Processing Across Asia, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of January and February.
Collecting tax revenue and administering social insurance are two of the most fundamental roles of government. When establishing or operating a business in Asia, companies must take special care to comply with regulations concerning taxes deducted at the source of employee payroll (withholding tax) and mandatory contributions to social insurance programs.
As you might expect in a region comprising so much diversity and complexity, the systems utilized by governments in places like China and Vietnam (countries with large populations and with a communist background) are substantially different than those in places like Hong Kong and Singapore – small jurisdictions with a distinctly capitalist outlook. India, a populous emerging nation with a democratic system of government, provides an interesting contrast in terms of how it taxes and supports its citizens.
Nov. 21 – The new issue of Asia Briefing Magazine, titled The 2014 Asia Tax Comparator, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of November and December.
The opportunities to sell to the Asian consumer have never been more pronounced than they are today, and those opportunities will continue to expand and develop over the next three decades. Key to understanding and accessing this massive, dynamic new consumer market is the ability to understand the underlying tax treatments. To that end, we are pleased to present our third annual “Asia Tax Comparator” as Asia Briefing Magazine’s final issue of 2013.
Nov. 19 – The Malaysian government has announced that it will implement a new Goods and Services Tax (GST) beginning April 1, 2015. The initial rate is expected to be 6 percent which will be the lowest amongst ASEAN countries and much lower than the VAT rates in the European Union.
The tax was announced within Malaysia’s 2014 Budget. The GST is one of the key strategic reform initiatives of the ‘Economic Transformation Program’ that was announced by the Malaysian government in 2010.
The new GST will replace the current sales tax (10 percent) and service tax (6 percent).
Nov. 11 – Many first and second tier suppliers, including small to medium-size enterprises, are prioritizing their investments into Vietnam, acting on the business potential that it holds for companies involved in a larger supply chain providing goods and services to manufacturing hubs in Asia. It is thus increasingly important to understand the taxes which Vietnam imposes on business, such as corporate income tax (CIT).
In the final part of our recent coverage of taxation, this article will provide an introduction to corporate income tax in Vietnam.
Oct. 30 – This week, consulting firm Ernst & Young (EY) released its latest bi-annual mergers and acquisitions (M&A) report, which cited China as one of the world’s top five destinations for M&A activity alongside India, Brazil, the United States and Canada. The report also further provided an optimistic outlook for China and India, with the volume and size of deals expected to increase in the upcoming year.
Of the companies surveyed, 35 percent said they were likely to pursue acquisitions in the coming year (compared to only 25 percent last year). Specifically, the life sciences, energy, automotive and consumer products industries are expected to experience the most deal activity.
In addition, according to the EY report, 65 percent of executives expect the global economy to improve in the upcoming year – up from last year’s count of just 22 percent.
Oct. 25 – Vietnam’s National Assembly issued the Law on Personal Income Tax (PIT) on November 21, 2007, which came into effect on January 1, 2009. The law applies to individuals earning income, including individuals doing business who were previously included under corporate income tax.
According to the PIT Law, PIT is levied on the worldwide income of Vietnam residents and on Vietnam-sourced income of non-residents, irrespective of where the income is paid. The tax calculation and finalization procedure for Vietnamese locals and expatriates is the same, but different for residents and non-residents.
Oct. 17 – Pursuant to the prevailing regulation on Vietnamese tax management, the taxpayer must submit monthly valued-added tax (VAT) returns and settle tax payments on or before the 20th day of the following month in localities where they conduct production or business. Furthermore, in specific situations, business establishments that pay VAT according to the credit method are entitled to a tax refund. This article will examine the filing, payment and refund of VAT in Vietnam.
Tax Filing and Payment
For companies adopting the direct method of VAT calculation, the tax finalization must be made no later than the 90th day from the end of calendar year. Payment has to be made in Vietnamese dong (VND) directly to the State Treasury in cash or through the taxpayer’s bank account.
Oct. 10 – This week, for the first time ever, Malaysia has started to allow the trading of gold futures on Bursa Malaysia – the country’s stock exchange. The Bursa currently has 19 registered futures trading brokers.
For some time now, there has been a large gold business within Malaysia, with the country exporting over RM7.1 billion (US$2.2 billion) worth of finished jewelry last year – the majority of which went to Dubai.
What are the differences between “general invoices” and “special VAT invoices” in China?
Aug. 16 – In China, invoices (or “fapiao” in Chinese) are more than just ordinary receipts. Contrary to other countries, where invoices are usually used simply to record a transaction, in China they are also the way in which the government monitors the tax paid on any transaction. Fapiao are printed, distributed, and administrated by tax authorities, and taxpayers are required to purchase the invoices they need from the tax authorities according to their business scope.
Fapiao can mainly be sorted into two categories – general invoices and special value-added tax (VAT) invoices. Although these terms are often used interchangeably, there are notable differences between the two.
Jun. 28 – Mumbai may be on the way to overtaking Shanghai as a financial hub in the coming years based on data which shows that the Bombay Stock Exchange’s main index significantly outperformed the Shanghai Stock Exchange’s main index in terms of growth in the past decade.
The Bombay Stock Exchange (BSE) traces its roots back to 1830, with its primary trading index, the Sensex, being first compiled in 1986 with a base level of 100. The BSE is now the largest exchange in South Asia and the 12th largest globally with an estimated market capitalization of US$1.26 trillion in December 2012. There are over 5,000 listed companies on the exchange.
In contrast, the Shanghai Stock Exchange (SSE) was only reformed in 1990 and lists some 900 companies. It is the sixth largest exchange in the world with a market capitalization of US$2.5 trillion, but is dominated by government-owned companies and is not fully open to foreign investors. Shanghai’s primary index, the SSE Composite IX was formed in 1991 with a base value of 100.