Alphalink Accounting, Audit and Tax Compliance in Asia Pacific (For inbound investment)

Transcription

1 Australia Company (limited liability) AASB Standards and AASs (Note 1) Yes (Note 2) Yes Fringe benefits tax (FBT) Superannuation Guarantee - Public company As above Yes Yes Goods and services tax (GST) (Note 4) Employer: 9% of employee's salary and wages (Quarterly contributions) - Proprietary company As above Yes (Note 2) Yes Custom duty Quarterly payment made by:- Partnership As above No Yes Payroll tax 28 October ( 1st Quarter - 1 July to 30 Sept) Joint venture As above No Yes (Note 3) Stamp duties 28 January ( 2nd Quarter - 1 Oct to 31 Dec) Trust As above No Yes Land tax 28 April (3rd Quarter - 1 Jan to 31 Mar) Branch As above 28 July (4th Quarter - 1 Apr to 30 June) 1) Australian Accounting Standards Board ("AASB") Standards applies to all companies that are reporting entities. Reporting entities are defined under Companies Act 2001; including disclosing entities, public companies and large proprietary and registered schemes. Australian Accounting Standards (AAS) applies to all reporting entities in the private or public sectors to which AASB Standards do not apply. 2) Small proprietary companies are exempted from submission of annual audit report. A proprietary company is a small proprietary company if it satisfies at least two of the following conditions: (i) consolidate gross operating revenue of less than A$25million; (ii) consolidated gross assets of less than A$12.5million; (iii) less than 50 employees. However, a small proprietary company has to appoint an auditor if it: (i) is controlled by foreign company, and its results are not covered in financial statements lodged with ASIC by the foreign company; (ii) is requested to do so by 50% or more of the shareholders; or (iii) is requested to do so by ASIC. 3) If a joint venture is not a partnership, it is not required to file income tax returns. 4) (i) Entities that are required to pay GST and/ or claim input tax credits are required to have an ABN and register for GST. (ii) Entities with an annual turnover of $20 million or more must lodge their GST returns monthly. (iii) Entities with annual turnover of less than $20 million must lodge quarterly GST returns. They may opt to lodge monthly. 5) If a foreign company wishes to carry on business in Australia or if it wishes to issue or sign negotiable instruments, it must apply for an Australian Business Number (ABN) and register as a foreign company with ASIC. A registered foreign company must also appoint a local agent who is: - (i) a resident of Australia; and (ii) authorised to accept, on behalf of the foreign company, service of notices. China Wholly foreign owned enterprise New PRC Accounting Standards for Business Enterprises (Note 1 & 2) Yes Yes Turnover taxes Social Security Insurances Equity joint venture As above Yes Yes i) Value added tax (VAT) (Note 4) (i) Pension Insurance Cooperative joint venture As above Yes Yes ii) Consumption tax (Note 5) - Employer: 11%; Employee: 8% Representative office (RO) As above Yes NA (Note 3) iii) Business tax (Note 6) (ii) Medical Insurance Partnership As above Yes Yes taxes - Employer: 4.5%; Employee: 2% Branch As above Yes Yes i) Individual income tax (iii) Unemployment Insurance ii) Enterprise income tax - Employer: 0.4% iii) tax on enterprise with foreign (iv) Injury Insurance investment and foreign enterprises - Employer: % Resource taxes (v) Pregnancy Insurance i) Resource tax (Note 7) - Employer: 0.5% (Note 8) ii) Urban and township land use tax (vi) Housing Fund Taxes for special purposes - Employer: 13% i) City maintenance and construction tax (Note 8) The rates of contributions for item (i) - (vi) are vary from city to city. The above rates are using Shenzhen ii) Land appreciation tax as an example. (Note 8) iii) Farmland Occupation tax Property taxes i) House property tax ii) Urban real estate tax Behaviour taxes i) Vehicle and vessel usage tax ii) Vehicle and vessel usage license plate tax iii) Stamp tax iv) Deed tax v) Slaughter tax vi) Banquet tax vii) Tobacco leaf tax (Note 9) Customs duties 1) The new PRC Accounting Standards, comprising the Basic Standard and the 38 Specific Standards as well as application Guidance, became operative for enterprises listed in the PRC as from 1 January ) If an enterprise's operating income and expenses are primarily denominated in currencies other than RMB, the enterprise may choose any one of the currencies as its book currency. However, the enterprise's financial statements must be translated into RMB. 3) Not applicable because RO not permitted to engage in sales activities. 4) All units and individuals within the territory of the People's Repulic of China who are engaged in the sales of goods, provision of processing, repair and replacement services and the import of goods are liable to VAT. 5) All units and individuals engaged in the production, subcontracting for processing or the importation of consumer goods within the borders of the People's Repiblic of China shall pay Consumption Tax. 6) Within the borders of the People's Republic of China, individuals and organizations that supply services, transfer intangible assets or sell immovable properties shall be liable to Business Tax. 7) All units and individuals engaged in the exploitation of mineral resources or production of salt prescribed in the resource tax are liable to resource tax. 8) Enterprises with foreign investment, foreign enterprises and foreigner are exempted. 9) The payers of customs duties include consignees who import goods permitted by China and consignors who export goods permitted by China. 1

2 Hong Kong Subsidiary (limited company) HK Financial Reporting Standards Yes Yes Property tax Mandatory Provident Fund (MPF) Branch As above (Note 1) No Yes Stamp duty (Note 3) - Employer: 5% (Contribution cap at HK$1,000) Partnership As above (Note 1) No Yes Salaries tax - Employee: 5% (Contribution cap at HK$1,000) Representative office (RO) As above (Note 1) No NA (Note 2) Property tax Employee with monthly relevant income less than HKD5,000 is exempted from making mandatory contribution Sole proprietorship As above (Note 1) No Yes but employer is still required to contribute an amount equal to 5% of the employee relevant income. 1) Entities that qualify for reporting under the SME Financial Reporting Framework (SME-FRF) and preparing financial statements in accordance with the Financial Reporting Standard (SME-FRS) include: Hong Kong companies: Companies applying section 141D of the Companies Ordinance. Overseas companies: (i) No public accountability; (ii) Meet size test (any two of the following: annual revenue HK$50 million, total assets HK$50 million, 50 employees); and (iii) All owners agree to apply the SME-FRS. 2) Not applicable because RO not permitted to engage in sales activities 3) Stamp duty applies to the following categories and transactions: i) Contract notes on the transfer of Hong Kong shares and marketable securities ii) Assignments of immovable property; iii) Leases and assignment of leases of Hong Kong property; and iv) Issuance of bearer instrument. (Monthly payment made by 10th of the calendar day of the following month) India Sole Proprietorship Accounting standard issued by ICAC of India No (Note 5) Yes Value added tax return (Note 7) Provident Fund & Pension Scheme Traditional Partnership As above No (Note 5) Yes Fringe Benefit Tax (along with income tax return) - Employee: 12% Limited liability Partnership As above Yes (Note 5 and 6) Yes Annual return against salary paid - Employer: 12% (8.33% to the Provident fund and 3.67% to the Pension scheme ) As above No NA (Note 4) Central sales tax return Contribute 12% of "covered salary" up to a limit of INR6,500 per month Branch (Note1) As above Yes (Note 5) Yes Service tax return (Monthly payment made by 25th of the calendar day of the following month) As above Yes (Note 5) Yes Commodity transaction tax ( Return of Employees qualifying for membership to the Employees' Provident Fund for the first time As above Yes (Note 5) Yes Custom duty during every month. Within 15 days of the following month) Joint venture As above Yes (Note 5) Yes Excise duty Public listed/ limited company As above Yes (Note 5) Yes Property tax Private limited company As above Yes (Note 5) Yes Securities transaction tax Wealth tax 1) Foreign Companies are not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. 2) Would be restricted to the Special Economic Zone (SEZ) alone and no business activity / transaction will be allowed outside the SEZs in India which include branches / subsidiaries of its parent offices in India. 3) Cannot undertake or carry on any activity other than the activity relating and incidental to execution of the project. 4) Not applicable because liaison office cannot undertake any commercial activity directly or indirectly. 5) a) Tax Audit or tax audit in addition of statutory audit is required if: - Carrying on a business, total sales, turnover or gross reciept exceed Rs4m. - Carrying on profession, gross receipts exceed Rs1m. b) Cost Audit - Central Government may order cost audit for the companies engaged in production, processing, manufacture and mining activities. c) Internal Audit - Companies having a paid up equity capital exceeding Rs5m at the beginning of the concerned financial year or having an annual turnover exceeding Rs50m for the last 3 consecutive financial years need to have an internal audit system in place. 6) Statutory audit is required if contribution exceeds Rs25 lakhs or turnover exeeds Rs40 lakhs. 7) Supplying designed goods and annual "taxable turnover" is more than Rs5 lakh is required to register for VAT. Indonesia Limited liability company Indonesian Financial Accounting Standard (Note 1 & 2) Yes (Note 3) Yes Value added tax return (Note5) (Note 7) Provident Fund (Jamsostek): Sole Proprietorship As above Yes (Note 3) Yes Sales tax on luxury goods (Note 6) - Employees: 2% of gross monthly earnings Partnership As above Yes (Note 3) Yes Periodic employee income tax return - Employers: 3.7% of monthly payroll Branch As above Yes (Note 3) Yes Annual employee income tax return Contribution: Representative office As above N/A (Note 4) Yes Withholding tax return - Employers: 0.3% of monthly payroll Property tax return Fringe benefist tax Excise duties 1) All entities will fully adopt IFRS by Stamp duty 2) Financial Accounting Standards (SAK ETAP) is designed for small and medium sized entities to adopt. Land tax 3) All entities are subject to statutory audit except for those with assets less than Rp25billion. 4) Not applicable because RO is not permitted to engage in sales activities. 5) Indonesia operates a VAT system which taxes the supply goods and provision of services at a standard rate of 10%. Certain Goods and services are exempt. Insurance & banking are not subject to VAT. 6) A luxury good tax is levied on variety goods at a rate ranging from 10% to 75%. The tax is levied upon importation. 7) Provident fund is compulsory for companies with more than 10 employees or a payroll exceeding Rp1m per month. 2

3 Japan Limited/ Unlimited partnership Japanese GAAP Yes (Note 1) Yes Fixed property tax return National Pension Programme Limited liability company As above Yes (Note 1) Yes City planning tax return - Employer: 14% of annual pay Joint stock company As above Yes (Note 1) Yes Inheritance tax return - Employee: 13% of annual pay Special purpose company As above Yes (Note 2) Yes Gift tax return All employers in Japan are required by law to participate in unemployment and worker disaster Branch As above Yes (Note 1) Yes Consumption tax return insurance programmes. Insurance premiums vary by industry. Public interest corporation As above Yes (Note 1) No (Note 3) Capital gains tax Public corporation As above Yes (Note 1) No enterprise tax Cooperatives As above Yes (Note 1) Yes inhabitant tax Trust As above Yes (Note 1) Yes Representative office (RO) As above Yes (Note 1) (Note 4) NA 1) Large corporation with JPY500 million of share capital or more or whose liabilities are JPY 20 billion or more at the fiscal year end are required to engage external CPA to conduct the statutory audit. 2) Other statutory audit is required 3) Exempt from corporation tax but profits accruing to them from profit-making business are subject to corporation tax at a reduced rate of 22%. 4) Not applicable because RO not permitted to engage in sales activities. Malaysia Company (Public) FRS Yes (Note 4) Yes Sales tax return (Note 5) Employees Provident Fund (EPF) Company (limited liability) FRS / PERS (Note 2 & 3) Yes (Note 4) Yes Service tax return (Note 6) - Employers: 12% Company (private limited) As above Yes (Note 4) Yes Employer return - Employees: 8% Trust As above No Yes Stamp duty (Monthly payment made by 15th of the calendar day of the following month) Sole proprietorships (Note 1) As above No Yes Social Security Contributions to the Social Security Organisation (SOSCO) Partnership/joint venture (Note 1) As above No Yes (Establishments with employees earning less than RM3,000 per month are required to insure them with the SOCSO) Branch As above No Yes - Employers: 1% % - Employees: 8% 1) Applicable to only citizens/pr of Malaysia. 2) Private entities are to adopt with Private Entity Reporting Standards (PERS). The definition of private entity is per section 15(1) of Companies Act By 2012, All approved accounting standards applicable to entities other than private entities will converge fully with IFRS. 3) Entities other than private entities are to adopt Financial Reporting Standards (FRS). 4) Entities under Companies Act 1965 are required to performed annual audit. 5) Companies with licensed manufacturing warehouse status and companies with a sales turnover of less than RM100,000 are exempted. 6) The imposition of service tax is subject to a specific threshold based on an annual turnover ranging from RM150,000 to RM500,000. ( No later than last day of the following month) New Zealand Company (unlimited and limited) NZ International Financial Reporting Standards (NZ IFRSs) (Note 1) Yes (Note 2) Yes Goods & services tax return (GST) (Note 5) Social Security (i.e. KiwiSaver Superannuation Scheme) Sole proprietorship As above No Yes Fringe benefit tax return (FBT) - Employer: either 2%, 4% or 8% of gross salary, with compulsory employer Trust As above No (Note 3) Yes Gift duty contributions of 2% from 1 April 2009 Joint venture As above No (Note 3) Yes (Note 4) - Employee: either 4% or 8% of gross salary and can be opt out. Branch As above Yes (Note 2) Yes Accident Compensation Corporation Scheme General partnership As above No (Note 3) Yes - Employer: 5% % on gross salary (varies according to industry class) Limited partnership As above No (Note 3) Yes - Employee: 1.4% 1) Certain small entities (i.e. not issuer, not large entity, not required to file financial statements with Registrar Companies) are permitted to continue applying New Zealand FRSs & SSAPs, and are not required to adopt New Zealand equivalents to NZ IFRSs. 2) Listed Companies, overseas companies and overseas branches require an audit. A privately held company 25% or more owned by non residents, must be audited. 3) Other than an overseas company, entities (bottom tier) with turnover less than $1,000,000 and assets less than $450,000 are not subject to statutory audit. 4) Does not apply to unincorporated joint venture. 5) The supply of financial service and the supply of residential rental accommodation are the principal exemptions from GST. Pakistan Sole Proprietorship IAS and Companies Ordinance 1984 (Note 1) No Yes Value added tax return (VAT) Old Age Disability and Survivor Partnership As above Yes (Note 2) Yes Capital value tax - Employer: 5% of minimum wages Branch / Liaison Office As above Yes (Note 2) Yes - Employee: 1% of minimum wages Companies: Private/Public (The minimum wage is 6,000 rupees a month) - A company limited by shares As above Yes (Note 2) Yes Sickness and Maternity - A company limited by guarantee As above Yes (Note 2) Yes - Employer: 6% of monthly payroll - An unlimited company As above Yes (Note 2) Yes - Employee: 20 rupees a month 1) Medium-Sized Entities and Small-sized entities have their own accounting and financial reporting standards. 2) Financial statements must be filed annually by all public and private liability companies with paid-up capital of PKR 7.5 million or more. Social Security - Employer: 6% of gross salaries 3

4 Philippines Company (stock) Philippines Financial Reporting Standards (Note 1) Yes (Note 2) Yes VAT return Social Security System (SSS) Partnership As above Yes (Note 2) Yes Percentage tax return - Employee: 3.33% (Contribution cap at PHP500) Sole proprietorship As above Yes (Note 2) Yes Fringe benefit tax - Employer: 7.07% (Contribution cap at PHP1,060) Branch As above Yes (Note 2) Yes (Monthly payment made by 10th of the calendar day of the following month) Representative office (RO) As above NA (Note 3) NA Joint venture As above Yes (Note 2) Yes 1) Small & Medium-Sized Entities have their own accounting and financial reporting standards called Philippines Accounting Standard ) A statutory audit is required for all corporations with authorized capital stock or paid up capital exceeding P50,000, including branches of foreign corporation. It is also required for any corporation whose gross sales or earning exceed P150,000 in any quarter. 3) Not applicable because RO cannot generate income. Singapore General partnership Singapore Financial Reporting Standards No (Note 2) Yes Good and services tax return (GST) Central Provident Fund Contributions (CPF) Limited partnership As above No (Note 2) Yes Employee's remuneration return - Employee: 5%-20% Limited liability partnership As above No (Note 2) Yes - Employer: 5%-14.5% Sole Proprietorship As above (Note 1) No Yes (Monthly payment made by the 14th of the following month) Subsidiary (Public and Private Limited Company) As above Yes (Note 3) Yes Branch As above Yes Yes Representative office (RO) As above No (Note 4) No Trust Recommended Accounting Practice 7 Yes Yes 1) An exposure draft on SMEs has been proposed which allows simplified reporting requirements for entities with no public accountability. 2) Under Section 25(1) of the LLP Act, LLP is required to keep accounting and other records detailing its financial position, as well as, profit and loss account and balance sheets. However, these documents need not be lodged with ACRA. 3) Audited financial statement is not required, if: - the turnover for the financial year is less than S$5m; - the Company does not have more than 20 shareholders; - the Company does not have, directly or indirectly, a corporation as a beneficial shareholder. It's important to note that all companies (regardless of exempt or not) are required to submit a Form C, tax computation and the audited/unaudited accounts annually. 4) Not applicable because RO cannot generate income. South Korea Company - Limited/Unlimited Korea Financial Accounting Standards (Note 1) Yes (Note 2) Yes Value added tax return (VAT) National Pension Partnership As above Yes (Note 2) Yes Real estate tax return - Employer and employee: 4.5% (Salary max: Won3.6million) Joint venture As above Yes (Note 2) Yes Inheritance & Gift Tax Medical Insurance Premium Branch As above Yes (Note 2) Yes Security transaction tax (STT) - Employer and employee: 2.665% Representative or liaison office As above Yes (Note 2) No (Note 3) Special excise tax National Medical Insurance Sole proprietorships As above Yes (Note 2) Yes Liquor tax - Employer and employee: 6.55% of Medical Insurance Premium Stamp tax Long-term care security Transportation tax - Employer and employee: 4.78% of Medical Insurance Premium Education tax Employment Insurance 1) Adoption of IFRS from 2011 for all listed companies. Special tax for rural development - Employer: 0.7% (Salary max:won1.78million) 2) The following entities are required to file audited financial statements: Capital gains tax - Employee: 0.45% (Salary max:won1.78million) (i) Joint stock companies with total assets of 7 billion Korean Won or more (annually); Workers' Accident Compensation Insurance Premium (ii) Joint stock company with more than one subsidiary must prepare audited consolidated financial statement in addition to parent-only financial statements; and - Employer: 1.04% (Salary max:won1.78million) (iii) Business groups (referred to as chaebol) with total assets of 2 trillion Korean Won or more. Industrial Accident Compensation Insurance 3) Not applicable because RO cannot generate income. - Employer: 0.6% to 52.2% of monthly salary Taiwan Branch Taiwan GAAP (Note 2) Yes (Note 3) Yes Value added tax return (VAT) (Note 6) Labor Insurance (Applicable to 5 employees) Company (Note 1) As above Yes (Note 3) Yes Withholding tax return - Employer: 70% of 6.5% (of salary: max NT$43,900) Representative Office As above Yes (Note3) No (Note 4) Employment income tax return - Employee: 20% of 6.5% (of salary: max NT$43,900) Sole proprietorship As above No Yes National Health Insurance Foreign Investment Approval Companies (FIA) As above Yes (Note 3) Yes (Note 5) - Employer: 60% of 4.55% times 1.7 (of salary: max NT$131,700) - Employee: 30% of 4.55% (of salary: max NT$131,700) Labor Pension Act Scheme 1) There are 4 different kinds of companies in Taiwan: unlimited company, unlimited company with limited liability shareholders, limited company and company limited by shares. - Employer: at least 6% (of salary: max NT$150,000) 2) IFRS will be fully adopted, possibly by Year Employee: optional up to 6% (of salary: max NT$150,000) 3) Audited requirements depends on amount of capital, sales and bank borrowings. 4) tax compliance is not applicable however it is still required to file withholding tax statement (ie. Withholding tax on salaries, rental income, professional s fees and etc). 5) tax is withheld at sources at a rate 20% for income derived from investment in a FIA company. 6) Export sales and export related services, however are subject to zero tax rates. 4

5 Thailand Sole Proprietorship (Note 1) Thai Accounting Standards (Note 5) No Yes Value added tax return (VAT) Social Security Partnership (Note 1) As above Yes Yes Specific business tax return (SBT) - Employer: 5% Company (Private and Public limited) (Note 2) As above Yes Yes - Employee: 5% Branch (Note 3) As above Yes Yes (Monthly contribution cap is THB750) Joint Venture As above Yes Yes Labor Skill Development Fund Representative Office (RO) (Note 3) As above Yes No (Note 6) - Applicable to 100 employees Foreign Company Consortium Office (Note 3) As above Yes Yes - At least 50% of its total no. of employees to be arranged yearly labor skill training Regional Operating Headquarters (ROH) (Note 3 & 4) As above Yes Yes - Otherwise, 1% x THB4,500 x 12 x # of employees who have not been trained 1) Generally foreigners are not able to establish in these forms due to the ownership restrictions. 2) Private limited company must issue at least 51% of its issued share capital to Thai individuals or other Thai Companies. 3) For Branch, RO & Foreign Company Consortium Office in Thailand, the min. capital requirement is determined at 25% of the estimated average annual operating expenses of the operation calculated over three years. Such calculated amount of capital shall not be less than THB3million. For ROH, the min. capital requirement is THB10million. 4) A foreign company conducting business operations in at least three other countries (besides Thailand) in the SEA region is able to establish a ROH in Thailand. 5) For areas unaddressed, IAS, IFRS and US GAAP may be consulted. 6) A RO which complies with the rules & regulations for its non-revenue-earning activities, is not subject to income tax on Thailand. 5