Russell Bedford Hua-Ander - Tax Planning and Advisory

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Tax Planning and Advisory

Tax planning is a process of looking at various tax options in order to determine when, whether, and how to conduct business and personal transactions so that taxes are eliminated or reduced. As business management, and as an individual taxpayer, you will often have the option of completing a taxable transaction by more than one method. Choosing right tax planning strategies will reduce or avoid tax burden in the legal framework.

Russell Bedford Hua-Ander tax experts can provide valuable tax planning and advices during different phases of your business in China:

- Establishment of a foreign investment enterprise (FIE)
As part of the policy of encouraging foreign investment in China, the government offers a variety of tax incentives to foreign investors. These incentives may change in the post-WTO era and when the new Law of Enterprise Income Tax becomes effective, it is likely that certain incentives will remain and new incentives will be introduced, especially to certain industries and special regions. We can help foreign investors to plan their location and type of new business and gain tax incentives when available, for example:

Tax holidays for manufacturing enterprises, for export-oriented enterprises, and for hi-tech enterprises
Tax incentives for companies located in special economic and technical development zones
Tax incentives for purchasing locally-manufactured equipment
Tax bonus for research and development activities
Tax incentives for certified software companies

- During the normal operation
There are a number of tax regulations in respect to transactions of FIEs. The following are some of the circumstances in which FIEs need to carefully consider the tax implications and we can provide assistance and advice:

Tax reductions/refund for re-investment and increasing registered capital using the retained earnings
Distributing profit to overseas investors
Paying royalties, management fee, loan interest, and service fees to overseas company
Cost-sharing or revenue division with overseas company
Corporate restructuring such as change of shares, merger and acquisition, equity transfer or asset transfer, buy-out of joint venture partners
Designing the transfer pricing policy

- Exit
One of the most problematic issues one faces during the closure of a foreign investment enterprise or a representative office is tax clearance and de-registration with tax bureaus. We offer tax assistance in liquidation or closure of the enterprise or office:

Advising on tax implications of different treatments of equity and assets
Performing liquidation/closure tax audit
Filing the tax clearance report to tax bureaus
Performing de-registration procedures with tax bureaus

We can also assist FIEs in dealing with tax authorities in a number of tax issues, such as tax audit or inspection and penalties or/and surcharges due to tax non-compliance or tax evasion. We can provide daily on-going tax advice to enable clients to take advantages of any new tax laws and regulations and provisions and circulars from tax authorities and to avoid any tax risks during the daily operation of business.