IN THIS ISSUE:
China Update
Using Circular 698, tax authorities citing substance over form imposed capital gains tax on a transaction. The Buyer, the Seller, and the Holdco were not Chinese resident enterprises but tax was imposed by disregarding Holdco and viewing the transaction as a direct equity transfer. Page 1
Mergers and Acquisitions in China
Regulations relating to M&As in China lack coherence and are quite inconsistent making tax analysis and planning vitally important. Page 1
Hong Kong Court Rules in Profit Tax Assessment Case
Forcing judicial review may make it more difficult to reach a compromise with tax authorities. Hong Kong’s information exchange network expanded by tax treaties. Page 3
Tax Reform in Japan
The Japanese government remains committed to tax reform after a recent significant loss at the polls for the ruling Democrat Party. Voters want a tax debate including a possible rise in the sales tax rate. Page 6
Singapore Proposes Major Changes with 2010 Budget
The Ministry of Finance is completing the public comment period for the 2010 Budget which will provide productivity and innovation credits for companies as well as measures to encourage mergers and acquisitions. Page 7
