Tax Administration for Non-Tax Resident Enterprises in China
April 23, 2009
China Administration of Taxation recently promulgated a Circular (Guoshuifa 2009 No 3) (“hereinafter referred to as “The Circular”) to strengthen the control of Non-TRE Income Tax Resourcing Deduction. The below mentioned enterprises shall be regarded as Chinese Tax Resident Enterprise (TRE):
a. An enterprise which is established and registered in China, or
b. An enterprise which has in actual fact a management institution in China.
Correspondingly, Article 2 of the Circular indicates that so called Non-TRE which shall be set up in accordance with the law of the foreign country (region) whose actual administration institution is outside China; could have incomes originating from China without setting up institutions or establishments in China or they have already set up institutions or establishments in China but the income is not effectively connected with the institutions or establishments that were set up in China.
If a non-tax resident enterprise (”Non-TRE”) derives passive income, interest, dividend, rental, royalties and capital gains, etcetera from China, the payer of the income in China, a so-called Withholding Agent, is obligated to withhold and settle the withholding income tax (”WHT”), if any, on the passive income to the Chinese tax authorities at the time when the payment of the passive income is made or due.
Aforementioned income shall be divided into two categories. The first category is service income, since there is some specialty while determining tax liability considering the limit in respect of the length of time by the contact, shall be regarded as one category; besides, the income listed above shall fall into the second category of income. The tax treatment against these two categories of incomes is different. For service income, the tax bureau will ratify relevant margin align with the industry to which the service belong. For the second category of income, the taxation rate is normally ten percent.
The Circular sets out the detailed requirements for the Withholding Agents in relation to the WHT withholding obligations. It is generally considered that Circular 3 provides more strict collection measures than previous regulations. It will have significant impact on both non-TRE taxpayers and the Chinese Withholding Agents.
Source: By Teresa Zhang
http://www.crowehorwathinternational.com
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The Steel Revitalization Plans in China
January 29, 2009
It is reported that the State Council has worked out the steel revitalization plans, which focus on controlling the whole volume, washing out the obsolete capacity and encouraging technical innovation and merger & acquisition to bail out the slumping domestic steel industry.
Mr Wang Yifang Board chairman of Hebei Steel Group said even though the released plan has not cover detailed regulations, it will provides timely help for the development of the steel enterprises in Hebei province, the largest steel production base in China. To the large-sized steel mills, the plan means low cost expansion.
As one of the largest steel complexes in China, Hebei Steel Group has enhanced its place in steel industry since it was founded, and became the national major supportive enterprise.
As per local steel assistance plan, total crude steel capacity would be controlled within 80 million tons by 2020. In order to realize the goal, the province has to concentrate the quality steel resources by promoting the progress of M&As. Most experts believe that the steel revitalization policy will lay a solid floor for the further development of Hebei steel industry.
According to the plan special funds will be allocated from the central budget to encourage technological advancement of the sector, readjustment of products mix and improvements of product quality
As one of the pillar industries in Hebei province, the steel industry contributes more than 25% of the provincial total industrial profits in recent years. However, it still lacks of competitiveness since most local produced products are primary one, with few high value-added and high-tech contained products.
The local government should draw some supportive policies in line with the steel revitalization plan to encourage the technologic innovation. Only in this way, can Hebei province form high quality vanadium and titanium, construction steel and slabs production lines with high value added products, and end the extensive develop pattern in local steel industry.
Source: China Steel net.com
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Number Plate Recognition Technology
October 13, 2008
Recent advances in Automatic Number Plate Recognition (ANPR) technologies have lead to a greater acceptance of the technology by car-park operators. The new digital ANPR technologies present greater read rates than traditional CCTV/PC based technologies and offer far greater flexibility in deployment and customization than previously available. By attaching a unique signature to every vehicle entering and exiting a car park the potential of a car-park management system is greatly enhanced. The signature widely used by vehicle identification technologies is usually the registration number displayed on the front and rear of the vehicle. To robustly read this plate in all weather conditions, day and night and to increase the ability of a system to read dirty plates, Alpha Vision Design has developed a stand alone digital ANPR station that can extract the registration number and automatically present the number for processing. The applications of ANPR technologies can be used for tolling, police enforcement, journey time analysis, average speed violation and access control. Within the car parking domain, most car park operators use ANPR technology as a medium to locate lost vehicles, to calculate occupancy times and to dramatically decrease the revenue loss associated with ticket fraud. ANPR is also finding favour within non-supervised car parks as a means to control access via a white list. This white list contains a list of vehicles with known access rights. Suitable for hotel, apartment and company car parks, this negates the use of disposable paper tickets and wireless FOBs. Companies with large fleets are introducing ANPR as a cost effective method of tracking their vehicles throughout their depots. Large supermarkets and chains are also beginning to utilize the information obtained from their car-parks as a way of highlighting demographic patterns with a view to maximizing profits. For any traffic management system to be a success, the read rate must exceed 99%. Traditionally most operators shied away from ANPR when they discovered that their true read rates were rarely above 60%. In real world applications, this was the limit, not due to poor software but the result of using conventional CCTV systems to obtain the images. CCTV technology is 50 years old and does not lend itself well to computer recognition systems. The common processing core for CCTV based ANPR systems is a PC. CCTV/PC based systems are not robust and are unacceptably high maintenance. To counter this, Alpha Vision Design has developed a self-contained ANPR system designed specifically for the car parking industry. This system includes an integrated illuminator, high resolution digital camera, digital analyser and on-board relays, all contained in one standard security housing. Only mounting and a power cable is required – an industry first! A high resolution camera obtains images that are over sixteen times larger in area size than CCTV images. Combined with a wider field of view, now only one camera is required to capture both the registration plate and an overview of the vehicle, and vehicle placement within a lane is no longer an issue which leads to greater capture rates. The camera /computer unit can in real time adjust the exposure, gain, and the integrated on-board IR lighting to maximise the contrast and readability of the registration plate, including dirty plates, variations in plate reflectivity, strong headlamps and adverse weather conditions. This cannot be done with CCTV/PC based ANPR systems. The setup is easy and is only required once per site, with no re-configuration necessary even after a power outage as the system will reboot automatically. On a typical 800 bay car-park, the system can also store up to five years of data, capturing and time stamping an image of every vehicle entering and exiting the facility. The system is true Plug & Play and can directly control a parking barrier via its on-board database and integrated relays. For configuration, simply use any standard web browser to manage the ANPR station – no third party software is required to manage the entire ANPR network. Our standard systems are shipped in three versions. We have an ANPR station designed for operating at a 10 meter and 25 meter range, and a system for high speed traffic applications. All systems are pre configured and only mounting is required. The ANPR stations can act stand alone or integrate with an existing parking entry ticket/gate system. For remote applications, the ANPR station can also be configured to run over GPRS, TCP/IP and WIFI Networks.
http://www.parkingireland.ie/showart6.htm
Alpha Vision Design
Website: www.ait-traffic.com
Phone+353-1-4640332
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China Tightening Foreign Investment Restrictions
September 7, 2008
Under pressure from nationlists, China’s government is expected to continue blocking approval of foreign investments in key sectors. In particular, any involving “national strategic industries,” a definition which now specifically includes the bearing industry. And while rejecting more foreign investors outright, it is also consolidating many sectors under state control.
The China Industrial Security Center, part of the State Economic and Trade Commission, said its studies now show foreign merger and acquisition activity in China has reached the point where it has led to essential monopolies in some industries, threatening domestically owned and controlled businesses.
In addition, foreign investment is seen as potentially weakening China’s control over its own destiny in developing infrastructure and supplying defense-related needs.
CISC holds that foreign investments have not produced the often-promised results — access to new technology, international synergies, productivity gains — or delivered operating advantages, or any special improvement in the business at all.
Instead, CISC says allowing foreign direct investment has many risks :
• Market manipulation. It now claims foreign investors use the Chinese companies as tools to control specific domestic Chinese markets, earn outsized profits, then ship those profits out of China and overseas to the parent company.
• Impact on local economies. CISC said China’s economic safety is at risk in allowing foreign financing and ownership of raw materials supplied to domestic energy, transportation, and similar infrastructure dependencies. Similarly, autonomy is at risk when foreigners own key support businesses in the finance and publication sectors.
• Hindering local industry. When they come to relying on foreign funding, input and control, the Chinese businesses become too passive in developing their own skills, products and technologies. This threatens the future of business and may ultimately threaten China’s defense security.
The bearing manufacturing industry was specifically cited as an example of one where foreign involvement should be limited. In the bearing industry, foreign ownership should spark concern — because reliance on foreign resources hinders organic domestic development of skills and resources, and also because it creates the potential for China to rely on foreign-owned bearing manufacturers for the availability of key components needed for domestic security.
• Foreign ownership of large businesses in China, with no government controls, is a threat to the traditional economic system, which relies on many small-scale manufacturers. CISC said foreign-owned multinationals have unfair advantages over local businesses which can be short of technology savvy, and/or do not have much export sales built up.
In China, small and medium enterprises (SMEs) account for as much as 70% of domestic manufacturing output. Their access to capital has been hurt by recent government reforms aimed at tightening inflation and throttling back overheated growth.
Recent statistics issued by the State indicate manufacturing businesses are involved in nearly a quarter of all foreign-funded M&A activity in China. Overall, there were 169 M&A deals in China during second quarter 2008 — up 225% from first quarter.
Despite the central government’s stance on majority foreign ownership, locally-solicited foreign investment has been accelerating in manufacturing-heavy provinces. For example, FDI in Sichuan Province this year is up 108% to USD $1.8 billion, despite May’s devastating earthquake. Over 180 new foreign-funded businesses were given approval to begin operations in Sichuan, down 13 percent from 2007. But those businesses have agreed to invest more than $4.2 billion, up 208% from 2007.
Arcelor Mittal was recently rebuffed in its efforts to become more deeply involved in the highly fragmented Chinese steel industry. The Chinese government is consolidating steel producers; it wants the 10 largest, currently at 35% market share, to be at 50% by 2010, and 70% by 2020. Lakshmi Mittal said; “I do not see that in a year or so, the Chinese government will change their strategy where they do not want foreign companies to have a majority control.”
Source: bearings-china.com.cn
Tags: control, small and medium enterprises, steelRelated Posts:
