The past few months have witnessed a number of important tax changes, which are included in this edition of the Bulletin. It's worth highlighting the following developments as being of particular interest to many of our clients.

Hong Kong, India and Singapore issued their proposed tax changes for the current year in their respective governments' budget proposals.

China introduced an individual income tax reform which took effect on 1 January 2019. In the first quarter of 2019, the Chinese authorities issued various implementing rules to clarify certain aspects of the tax reform. It is good to note that foreign individuals living in China will continue to enjoy the offshore source exemptions which they had prior to 2019 if they meet the foreign travel requirement at least once every six years (which used to be five years). China also carried through a second instalment of reducing its two highest VAT rates. We expect a third reduction to happen towards the last quarter of the year.

Hong Kong enacted legislation which will see qualifying tax-exempt funds managed in Hong Kong coming on par with their Singapore equivalents, showing that Hong Kong is busy catching up with Singapore on vital business sectors for its economy. India's Supreme Court issued an important ruling on permanent establishment risks caused by foreign investors having a liaison office in the country, showing that India takes the permanent establishment risk very seriously.

Indonesia updated its transfer pricing and information requirements for annual corporate income tax returns by requiring additional information to be disclosed in the returns. In Japan, the multilateral instrument entered into force, which introduces additional anti-avoidance issues that must be addressed in order to enjoy tax treaty benefits. South Korea's Supreme Court issued a ruling on the application of gear on beneficial ownership, and Thailand replaced its headquarters, treasury and trading tax incentives with a new tax incentive regime called International Business Centre (IBC).

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