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China is the second largest economy across the globe with over 1.4 billion of population. Multi-National Corporations are more eager than ever to invest into China (China Inbound Investment) and/or doing business with business partners in China. On the other hand, Chinese Enterprises are eager to go overseas for Outbound Investment. One-belt-one-road initiative is just one of the focus of Chinese Enterprise.

Hong Kong has always been the platform to connect China and the rest of the world, no matter China Inbound and Outbound Investment. As such, it is important for examine the tax implications of both China and Hong Kong in your tax planning exercises.

Hong Kong is also part of Guangdong-Hong Kong-Macau Greater Bay Areas (GBA), which is the one of the areas with the strongest GDP growth in China. Being an international financial centre and closely situated in GBA, Hong Kong is in the best position to assist you to enter into China.

As one of our core services, our team comprises experienced tax experts in handling China-related tax and foreign exchange control matters and deal with local tax authorities in China.

We can assist you on the following services:

Compliance Services

Corporate Income Tax Advisory

Corporate Income Tax rates in China is 25%. However, lots of incentives are available to reduce the tax burden (e.g., 12.5% / 15% tax rate and super tax deduction) to companies in pillar industries. On the other hand, specific rules are imposed on expense tax deduction in China. The due date for filing Corporate Income Tax Return in China is 31 May.

Individual Income Tax Advisory

China adopts worldwide tax concept. As such, it is important to determine whether an individual is a resident or non-resident in China. We are experienced in handling individual tax filing for Hong Kong and Mainland China Individuals who travel frequently between Hong Kong and China. We also assist corporations to calculate additional Salaries under Tax Equalisation policy for expatriates.

Foreign Exchange Control

China imposes foreign exchange control on both trade and capital accounts. Multi-National Corporations (including Hong Kong) has to be in compliance with relevant rules and regulations at the time when they transfer the money into China in order to ensure that they can successfully remit their profits and investment out of China. Completion of tax filing is also an important step in the process.

Other Tax Advisory Matters

In addition to the above, there are other taxes like Land Appreciation Tax and Value-Added Tax (VAT). Withholding tax generally applies when Chinese Enterprises pay passive income (dividend, royalty and interest) or service income to non-residents.

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