Recent months have seen a move toward rationalisation and clarification in many countries' tax legislation, as well as measures to boost investment in the information economy. China has passed a proposed amendment, reported in the previous issue of this Bulletin, for reforming individual income tax by eliminating the five-year tax facility for foreigners living in China. It has also implemented a number of changes to VAT, in part in response to the imposition of tariffs on US products.
As discussed in the previous edition of this Bulletin, Hong Kong has gazetted an ordinance to expand tax relief for intellectual property purchasing. In addition, Hong Kong has extended the loss carry-forward period for high- and new-technology enterprises and scientific technology SMEs, and made amendments to transfer pricing and information exchange in keeping with the OECD's BEPS package. In Japan, an initiative has been introduced granting tax benefits to promote the uptake of advanced information technology, and changes have been made to CFC rules in keeping with OECD recommendations.
Korea has seen the announcement of a raft of changes to be implemented in 2019, including revisions of tax exemptions for foreign-invested companies and amendments to the treatment of investment funds established overseas. Adjustments have been made to requirements and rates for departure tax for individuals, and changes have been made to the rules for PE and dependent agents and the criteria for determining foreign corporations.
In Malaysia, the GST has now been replaced by the Sales and Service tax discussed in the previous issue of this Bulletin. Singapore has seen the opening of a public consultation on changes to its Goods and Services Tax, and in Taiwan regulations have been published for dealing with tax treaty disputes. Thailand has extended the 7% VAT rate. Vietnam has implemented changes to technology transfers and related-party royalty payments.
Previously published 19 October 2018
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