With the increasing internationalisation of RMB, there will be more opportunities for foreign investors to invest or reinvest in China using RMB rather foreign currency. However, the approval procedure can be complicated, and there can be tax costs that are not obvious at first glance. Recently, the relevant authorities have issued circulars in relation to RMB investment and reinvestment including Yin Fa [2011]No. 145(Circular 145), Peoples' Bank of China (PBOC) Announcement [2011]No.1(Circular 1) and Hui Zi Han [2011] No. 7(Circular 7).
Susanne Rademacher will highlight the general legal framework for such (re-)investments which have been issued during the recent years and analyze what foreign investors need to bear in mind in connection with the newly published announcements and circulars when (re-)investing RMB in China.
"Tax Consideration for Indirect Equity Transfer"
At the end of 2009, the State Administration of Taxation (SAT) issued Circular Guo Sui Han, Circular 698. This addresses the tax issues for equity transfer by non-China Tax Resident Enterprises. Circular 698 is one of the steps taken by the Chinese tax authorities in tackling various tax avoidance arrangements and transactions. Circular 698 has had a significant impact on many foreign investors that use offshore holding companies to invest in China.
Tracy Zhang will highlight the recent updates on indirect equity transfer, looking at the recent issue of SAT Announcement 24, which clarifies Circular 698 notification and taxation requirements of indirect disposal of equity interests. The update also discusses whether the offshore indirect disposal rules will be extended to include disposals by non-residents. Tracy will also look at the legal framework of indirect equity transfer transactions as well as giving examples of real life cases.
Speakers
Susanne Rademacher(bio)
Susanne Rademacher is an equity partner and head of office of Beiten Burkhardt's Beijing office and has been resident in China since 2001. Her areas of activity comprise corporate as well as foreign direct investment in China. She particularly advises clients from the automotive, chemical, machinery, renewable energy and hotel/hospitality industries.
Tracy Zhang (bio)
Tracy joined KPMG Beijing office in 1996. She was seconded to KPMG Qingdao office and functioned as the head of the local tax practice in 2006. From April 2007 till July 2008, she worked with International Corporate Tax practice in KPMG New York and Financial Service practice in KPMG London respectively.
Agenda:
08:00 - 08:30 Registration
08:30 - 10:00 Breakfast, Presentation and Q&A