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About KPMG
Events
Foreign Exchange Control in China 2009
Funds Repatriation, Pitfalls and Opportunities in Utilisation of RMB
in China
| Date: |
Thursday, 4 June 2009 |
| Time: |
8:30 am - 9:00 am (registration)
9:00 am - 12:30 pm (seminar)
2:00 pm - 5:00 pm (workshop) |
| Venue: |
Grand Hyatt Hong Kong
1 Harbour Road
Wan Chai, Hong Kong |
| Organiser: |
CCH |
| Language: |
English |
| Speakers: |
Bolivia Cheung
Partner
KPMG China |
Barry Cheung
Manager
KPMG China |
The global financial crisis has greatly affected the foreign exchange control policy of China. In 2008, the focus was on restricting hot money flowing into China and controlling investment in real estate. Although curbing speculative inflows is still a priority, the new controls have shifted to tax administration and include greatly increased scrutiny of such areas as transfer pricing.
2009 is a year of change. A number of detailed implementation of the 2008 Corporate Income Tax law were announced in 2009. The Value Added Tax and Business Tax reforms come into effect as of 1 January 2009. New transfer pricing rules severely tighten the regulation of inter-company charges. Companies may face difficulty in remittance of cross-border payments. Under the new Business Tax Rules, fees for services performed outside the PRC are taxable. The State Administration of Taxation has issued a series of notices governing the tax registration and declaration of foreign companies with operations in China, including the provision of services. Overseas companies charging service fees to their Chinese related companies can be caught under the new rules.
Our speakers will focus on the following issues:
- What are the developments and changes of the new Foreign Exchange Regulations and how these changes affect companies operating in China;
- What are the differences between controls over 'capital account' and 'current account' items and how such differences affect conversion of foreign currency into RMB and vice versa;
- What is the maximum amount of foreign currency loan that an foreign investment enterprise can borrow and the differences between short-term, medium-term and long-term loans;
- What is meant by 'cash trap', and how is it reduced? Are there other means of using RMB kept in China? Is it possible to make inter-company loans in RMB? If so, what are the tax and business risks;
- What types of funds can be repatriated from the PRC and what are the PRC tax implications of each item;
- What registrations and procedures are required for remittance of payments overseas; how Business Tax changes affect the overall tax efficiency in cross-border charges and recharges; what are the administrative controls over remittance, and the new controls of the remittances; and whether overseas charges are deductible for tax purpose without a PRC tax invoice;
- What are the major controls over trade-related items? Is it possible to receive advanced payments for exports? Is it possible to pay deposit to overseas suppliers before importation of goods and to pay commissions to agents overseas?
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