Thomson Reuters Releases Report on China Tax and Financial Issues for Corporations
Publication from WorldTrade Executive brand provides updates on recent regulations
The Tax & Accounting business of Thomson Reuters has published its new corporate report, China Tax and Financial Planning Briefing. The Briefing contains case studies and analysis from leading practitioners and is designed to help corporate tax directors and counsel determine the impact of tax and financial regulation on the profitability of a transaction.
“China is stepping up its enforcement of tax and other laws against foreign firms,” said Gary Brown, senior director of WorldTrade Executive (WTE), Thomson Reuters. “Tax authorities have targeted industries such as pharmaceuticals, distribution, real estate, construction, installation and transportation.” These actions are impacting both small firms and large multinationals. “China’s tax authorities also intend to cooperate with foreign regulatory officials with a view to better coordinate tax enforcement for groups operating both inside and outside of China.”
According to the WTE Briefing, if China operations are not making a healthy profit, a firm should not be surprised if the government imputes profits by recharacterizing the numbers, particularly through transfer pricing analysis in order to tax the enterprise.
A controversial topic, at the forefront of international regulatory interest, is discussed in the briefing regarding the way in which financial reporting might differ in China and how this could affect the credibility of audits performed on Chinese companies, noted Brown.
The Briefing provides practical advice on managing legal risks and pitfalls in Merger & Acquisition (M&A) transactions in the following topics:
- The five biggest mistakes firms make in negotiating non-disclosure M&A agreements;
- The national security review to which many M&A transactions are subjected;
- China’s tax laws and regulations which can complicate M&A.
The Briefing also provides practical advice on structuring and doing business in China in the following topics:
- Why forming a representative office makes little sense and why it may be better to create a Wholly Foreign Owned Enterprise.
- Important considerations when protecting a trademark in China, and how to take a product from conception to market and make sure that you as the contractor own the IP.
- New government measures which cause a compliance risk in contracting with consumers using standard contractual clauses.
WorldTrade Executive, a Thomson Reuters brand, specializes in providing reports and periodicals concerning tax and legal issues in international markets. Related publications include Practical China Tax and Finance Strategies and Practical Asian Tax Strategies. For more information, visit http://www.wtexec.com/ctfpb.html or call 978-287-0391.
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