Posted by wanghe on January 4, 2012 under Tax Incentives | 
Currently, the Ministry of finance and SAT issued notice and regulated that since 1st
January 2012, Shanghai launched VAT reform pilot. Each tax reform starts with many issues, so does the VAT reform pilot. Meanwhile, reform could bring a good deal of services and new chances.
I. Issues in Shanghai VAT reform pilot
Whether the tax rate reduces after the reform became a hot topic. Some people thought that the tax burden of transportation industry will rise on the contrary. However, seen from the whole reform, tax reduce is obvious. Government emphasized that this reform didn’t focus merely pilot industries, but the downstream enterprise. Government wants to reduce duplicate tax collection, enlarge business and promote the development of transportation industry and modern service industry.
To relieve taxpayers’ burden, policy regulates that some industry apply the previous business tax ratio, such as 3%. Enterprises with higher tax burden could solve it through tax incentives, such as VAT refund.
II. Tax service demand
1、tax disputes resolution
VAT invoice supervision is stricter than ordinary invoice. Hence, there might be many irregular invoice using situations at the beginning of the reform, which might cause tax disputes. “Crime of falsely making out special invoices for value-added tax” cases will increase, and the condemned rules will make amendments correspondingly.
2、tax coordination across districts
Business tax paid for service could be deducted in VAT sale item. Hence, relevant department outside pilot districts will issue rules to reduce the influence of taxpayers. Due to different rules in different areas, professional coordination is demanded in across district transactions.
3、international tax planning
Due to the turnover tax for service will not display on accounts, the account revenue might reduce. Even the tax burden no change, it will reduce 5% or more. Hence, with the same profits, the profits margin will be higher, which might cause tax risks. Foreign investment enterprises should pay special attention to it.
4、high tech tax service
Precious business tax incentives will be managed in VAT system, which includes technology transfer and exploration. Some enterprises with higher tax burden needs those tax incentives to reduce the reform influence, which might bring tax service market to intermediaries.
Posted by liwei on under China Tax, High Tech Enterprises |
The general distinction between additional deduction of RD expense and accounting RD expense
There are two conceptions for RD expense, one is additional deduction RD expense, and the other is accounting RD expense.
I. The accounting RD expense
1、personnel
Enterprises’ RD staffs’ salary, bonus, subsidy, social security, housing fund and such expense, and external RD staffs’ labor cost.
2、direct input
Material, fuel, and power expenses consumed by RD activities; molds, technological equipment exploration and production cost used by intermediate tests and trial production; equipment adjustment and test cost, samples and sampling machines purchasing fees, and the test expenses of trial productions.
3、depreciation and amortization
The depreciation or leasing fees of instrument, equipment, housing and such fixed assets, and relevant operation maintenance and repairing expenses of fixed assets.
4、design fees
The design fees of new production, the new process regulation fees, and technology books material fees, material translation fees directly related with RD activities.
5、amortization of intangible assets
The amortization expenses of software, patent rights, non-patent technology and such intangible assets.
6、other expenses
Demonstration, review, check, evaluation of developed achievements, application fee, registration fee, and agency fee of intellectual property rights; other expenses directly related with RD activities, such as technology books material fees, translation fees, conference fees, business trip fees, office expense, training fees, consultation fees and so on.
II. Additional deduction RD expense
1、personnel
The salary, bonus, subsidy and allowance of enterprises’ staffs engaged in RD activities.
2、indirect input
Material, fuel, and power expenses consumed by RD activities; field test fee of exploring technology; molds, technological equipment exploration and production cost used by intermediate tests and trial production.
3、depreciation and amortization
The depreciation or leasing fees of RD instruments and equipments
4、design fees
The design fees of new production, the new process regulation fees, and technology books material fees, material translation fees directly related with RD activities.
5、amortization of intangible assets
The amortization expenses of software, patent rights, non-patent technology and such intangible assets specially used for RD activities.
6、other expenses
Developed achievements’ demonstration fees, review fees and check fees.
All in all, the key distinction between additional deduction RD expense and accounting RD expense lies in “grant”, merely granted additional deduction RD expense is fit with tax policies. Hence, accounting staffs should enhance the communication with RD department, grasp the content and stage of RD projects, and make clear distinction between different RD expense conception to enjoy relevant tax incentives policies sufficiently.
Posted by zhangluping on under China Tax, Tax Incentives |
Currently, the high tech SMEs have been the new force of independent innovation and industrialization in BinHai new area. During the eleventh five year plan period, the number of the high tech SME innovative fund projects of the whole area were 823, which took 44.8% of the whole city, and the fund were up 100.55 million Yuan. The high tech SMEs have made breakthrough in the high performance computer, large database software, and large tire production equipments fields, which provided a strong support for new area’s high tech development.
However, compared with developed districts such as Zhongguancun, Pudong, and Shenzhen, the independent innovative level is still much lower, especially in NG wireless communication, high performance calculation, integrate circuit, first floor software, new energy vehicles, biotechnological pharmaceutics, energy saving and environment protection, and aerospace fields.
Hence, technology little giant program mainly support independent innovative enterprises. Firstly, district government strives for the support from state science and technology ministries, positively participate in state technology key projects, promote key technology achievements industrialization, and give relevant support to the industrialization projects.
Secondly, support enterprises to strengthen competiveness through technology innovation. Set “high growth enterprises supportive plan” program, to specially support enterprises to strengthen innovation capability; enhance high tech enterprises recognition, and give special fund support to recognized high tech enterprises; support enterprises to set IP strategies, obtain core patents, and increase IP creation, application, protestation and management ability; positively promote the high tech intermediary system construction, such as innovation agent, IP transaction stocks and such, to promote technology transfer and collaboration.
The above measures include all aspects of technology innovation development, in the future, there will be more and more supportive policies to those aspects, enterprises should apply those policies reasonably for faster better development.
Posted by xiaoweiming on under China Tax, Transactional Taxes |
Currently, government brought forward the key tasks of economic work of next year, which included promoting VAT reform and property reform pilot, adjusting consumption tax scope and ratio reasonably, comprehensively resource tax reform, and promoting environment protection tax reform. As predicted, the property tax pilot next year will be deepened.
People pay much attention to the property tax scope and whether property tax could reach regulate and control prediction of property-purchasing limitation circular. Currently, 7 of 8 property-purchasing limitation circulars will be expired at the end of 2011. However, local government still faced financial difficulties. In the first 11 months this year, Chinese land transferring fees reduced 30%. No matter Chongqing or Shanghai, the property tax pilot both merely applied to parts of owners who owned too many properties or mansions. But compared with land financial revenue, that is just a small number. Hence, somebody think that the property tax collection scope will be enlarged after replacing the property-purchasing limitation circulars.
We hold the opinion that the market price is determined by supply and demand. High domestic property price is due to vicious circle of insufficient supply. Currently, the property-purchasing limitation circular is just regulated measure. The final approach is to accelerate the commercial housing construction to increase the supply. The property tax collection will suppress consumers’ consumption desire, which is inconsistent with macro economic development goals. Hence, the property tax shouldn’t replace the property-purchasing limitation circulars.
Seen from the pilot in Chongqing and Shanghai, the government didn’t aim to remedy the loss of land finance through collecting the property tax. Accelerate the building construction and increase the housing supply will speed up the land transfer and recover the land finance. The property tax reform pilot, together with VAT reform aims both at consummating tax system.
This month, Beijing issued some policies and widened the ordinary housing standard. Hereafter, more housing transactions could enjoy tax incentives. Hence, the government encourages the ordinary housing, and the property tax will still focus on mansions in the future.
Posted by admin on December 22, 2011 under Hwuason News |
As shown by the industry blue book issued by Beijing Lawyers Association dated 30th, November, Number of Beijing Lawyers has reached 22937 till the end of 2010, which is 1/8 of the total national amount, 9 times of the average level and 2 times of Shanghai. About this, Liu Tianyong said that the amount of Beijing Lawyers is the biggest in China, and so is of the Beijing tax lawyers. The amount of tax lawyer is still growing. With the deeper implementation of “tax management by law” principle, the gradual raise of legislate level of tax laws, and the enhancing of legal consciousness of taxpayers , tax lawyers will become a new strength of the tax service intermediary organizations.
See: http://www.ctaxnews.net.cn/html/2011-12/05/nbs.D340100zgswb_01.htm
