repatriation of cash and profit in China如何有效将中国投资的.pdfVIP

Asia Pacific Tax Presents: China Spotlight. Repatriation of Cash and Profit Generated in China: Finding a Smooth Path Home Leonard Khaw / Daisy Kwun / Vicky Wang 5 August 2009 Agenda • “Trapped cash” in China: why the issue arises • Analytical framework for cash / profit repatriation • Recent developments: regulatory, foreign exchange and tax • Cash / profit repatriation strategies: update and reminder of issues • Common strategies for avoiding “trapped cash” in China and best practice • Questions and Answers 2 ©2009 Deloitte Touche Tohmatsu. “Trapped cash” in China: why the issue arises • Regulatory restrictions on particular economic activities ‒ Outbound investment ‒ Outbound lending ‒ Dividend distribution limitation (i.e. accounting profit requirement) • Foreign exchange control ‒ Only permitted categories of payments are remittable ‒ Various document requirements ‒ Change of rules / policy in accordance with the macro economic environment • Tax ‒ Failure to obtain tax clearance certificate, e.g. because of the inability to reach agreement on tax treatment 3 ©2009 Deloitte Touche Tohmatsu. Analytical framework for cash / profit repatriation Strategy / technique Reduces Cash taxable profit Interest √ √ Royalties √ √ Service fees √ √ Pre-tax Purchase of depreciable assets √ √ (e.g. intang