China: Business tax phases out, service tax changes

Dr. Bernd-Uwe Stucken and Yun Wei, Salans, Shanghai Unlike other countries, China adopts both business tax (“BT”) and value added tax (“VAT”) in its turnover tax system. While the VAT system mainly applies to the sale of goods, BT is primarily levied on taxable services. The difference in tax systems causes some industries to be [...]

Taxation of German Rental Income Earned by Nonresidents

Michael Birk, Ebner Stolz Mönning Bachem, Germany In this article, the author critically outlines and describes the Public Ruling of the German Federal Ministry of Finance on rental income from real estate which is subject to non-resident taxation, according to section 49 para 1 no 2 lit (f) German Income Tax Act. The Decree was [...]

Cross-border Merger Taxation in Japan

Shimon Takagi, White & Case LLP, Tokyo The following article looks at cross-border merger taxation in Japan, focusing on qualified triangular mergers which were introduced in Japan in 2007. I. Introduction As the world economy has become more integrated, global M&A has become an important strategic option for multinational corporations. Japan introduced qualified triangular mergers, [...]

Switzerland, Ireland Sign Revised Double Taxation Treaty

GENEVA — Switzerland and Ireland have signed a revised double taxation treaty enhancing cross-border information exchange in tax investigations. In a statement, the Swiss Federal Department of Finance said the accord, signed in Dublin Jan. 26, is based on international information exchange provisions set out by the Organization for Economic Cooperation and Development. Switzerland has [...]

Shanghai VAT pilot: Clarification of zero rate/exemption for services provided to overseas entities

Sarah Chin, Gao Li Qun and Candy Tang, Deloitte, Shanghai I. Introduction China’s Ministry of Finance (MOF) and the State Administration of Taxation (SAT) jointly issued widely anticipated guidance on December 29, 2011 that clarifies the scope of taxable services eligible for the zero rate or exemption under the VAT reform pilot program in Shanghai [...]

France and Luxembourg Cut VAT On E-books, Breaking Away From EU Policy

Rick Mitchell  PARIS — France and Luxembourg implemented measures Jan. 1 that slash valued-added tax rates applying to electronic book sales, becoming the first European Union member countries to challenge EU policy that allows traditional printed books and audio books, but not e-books, to benefit from so-called preferential VAT rates. On the first of this [...]

Australia: Update on GST and grants

Stephen O’Flynn and Andrew Cromb, Moore Stephens, Melbourne On November 2, 2011 the Australian Taxation Office released Draft GST Ruling GSTR 2011/D4: Grants of Financial Assistance (the “Draft Ruling”). The draft ruling represents a substantial rewrite of an earlier ruling on the same topic, GSTR 2000/11 (the “Old Ruling”), and follows numerous court decisions which [...]

Advance pricing agreements: A comparison between China and Germany

Holger M. Peters, Nadine Baltzer and Leonard Zhang, KPMG Germany and China The authors would like to thank Mr. Cheng Chi (Partner-in-Charge of Global Transfer Pricing Services in China & Hong Kong SAR) for his support in preparing this article. In China, the State Administration of Taxation (“SAT”) issued new transfer pricing regulations on January [...]

Tax incentives for Treasury Management Centres in Malaysia

Renuka Bhupalan and Vivian New, Taxand Malaysia The Malaysian Government recently announced the 2012 proposals in a Budget themed around national transformation focusing on several areas including accelerating investment, generating human capital excellence and easing inflation.  One of the 2012 Budget proposals that is noteworthy is the concept of a Treasury Management Centre (TMC). In [...]

Russia Adopts New Legislation On Consolidated Group of Taxpayers

MOSCOW — Russian authorities adopted a new law on the consolidated group of taxpayers (CGT), and reviewed some other provisions of the country’s tax legislation. President Dmitry Medvedev signed Federal Law No. 321-FZ, dated Nov. 16, to amend the Russian Tax Code and pass the country’s new CGT legislation, according to an announcement of the [...]

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