Category: APJT Archive

In the current turbulent tax landscape, a good way for a business to stay ahead of controversy is to adopt a global perspective everywhere it operates while establishing a global tax controversy strategy that is integrated with a strong tax risk and corporate governance framework. Businesses should have in place a documented tax strategy setting out their approach to compliance, planning, and interactions with tax administrations. The strategy should be put into action by a knowledgeable team that is integrated into the overall business. Embracing technology and digitalisation is key. The capability to directly submit accurate source tax information to the revenue authorities minimises potential tax controversy and tax uncertainty. In addition, having internal procedures on how to respond to requests for information from the tax authorities is important. As change is constant, businesses need to stay connected to global legislative, regulatory, and tax administration changes. Through managing tax controversies well, businesses will be able to avoid unexpected tax bills,...

This article provides a critical analysis of the level of tax litigation and the appeal system in Pakistan. The author triggers a debate on the possible reasons for the increased tax litigation and the excessive pendency of tax appeal cases, especially in the high courts and the Supreme Court....

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Singapore’s global economic standing, stable political landscape, strong legal system, business-friendly policies, skilled labour force, and support for innovation, among other factors, have placed the island nation among the most successful countries in the world in attracting foreign investment. As a global financial hub, Singapore has a robust financial infrastructure to support companies in their growth and regional expansion. With its excellent connectivity providing easy access to emerging markets, Singapore has positioned itself as a launchpad for doing business in Asia. It also has a vibrant entrepreneurial ecosystem whereby start-ups are nurtured through pro-innovation government policies, easy access to angel funding, and a strong technical infrastructure. Therefore, it is no surprise that Singapore continues to be one of the key destinations for investments made by Chinese companies. On the flipside, China has emerged in recent years as the top destination for Singapore’s foreign direct investment. With Singapore being one of the designated countries under the Belt and Road Initiative (BRI),...

Beneficial Ownership (“BO”) status is an identity which determines whether a non-China tax resident could enjoy tax treaty benefits, including preferential withholding tax rates, while deriving dividends, interests, and royalties from China. On 3 February 2018, the State Administration of Taxation (“SAT”) released SAT Announcement [2018] No. 9 to repeal the previous laws and regulations regarding determination of BO status. It introduced a more stringent standard to the determination of BO status while providing an extended scope of safe harbour rules for foreign entities. Multinational corporations (MNCs) are suggested to review their existing holding structures and business operations and take necessary actions in response to such changes....

The application of blockchain technology has brought a myriad of solutions for business, the increase in the value of Bitcoin over 2017 and early 2018 being just one indicator of the uptake of the technology. The increase in the price of Bitcoin and other cryptocurrencies (or “crypto”) and the search for alternative asset classes over this period have brought with them a spate of issuances by start-up technology groups of their own forms of cryptocurrencies by way of initial coin offerings (“ICOs”). This has in turn brought about substantial windfalls to the groups undertaking ICOs. With its recognisable corporations law and established capital markets, Hong Kong has at times found itself as a jurisdiction through which groups have sought to raise funds through ICOs. However, in the chase for free money, the analysis of the taxation treatment of tokens may have been put aside on occasion, largely due to the absence, as in other jurisdictions, of legislative provisions or Inland...

The Inland Revenue Ordinance of Hong Kong (Cap. 112 of the Laws of Hong Kong) (“IRO”) has contained provisions dealing with charities since 1949. The direct effect of those provisions (contained in Section 88 IRO) is to provide an exemption from tax for “charitable institutions and trusts of a public character”. An indirect effect, however, is to regulate the deduction of donations to charities. In particular, charitable donations are deductible, subject to certain limitations, but only where the recipient is an institution which qualifies for the tax exemption under Section 88 IRO. Moreover, an exemption from stamp duty is provided for certain transfers of immoveable property or Hong Kong stock to, or on trust for, a charitable institution or trust of a public character. This article looks at the legislative provisions, as well as the practices of the Hong Kong Inland Revenue Department (IRD), with regard to charities and considers whether those practices might be expected to change as a...

This paper reviews the Hong Kong Government’s initiative to implement the enhanced tax deduction on research and development (“R&D”) expenditure and argues that, with the specific anti-avoidance measures introduced, coupled with the various deeming provisions of the Inland Revenue Ordinance (“IRO”), including the new section 15F, businesses may find Hong Kong an unfriendly or even aggressive tax jurisdiction for intellectual property (“IP”) related activities. The objectives of encouraging enterprises to invest more in R&D in Hong Kong, to promote local R&D activities, and to groom local R&D talent may not be attainable....