Tax service

With the global tax landscape changing quickly, the tax function is increasingly expected to contribute to a business’s success and drive growth. Throughout these past few years, RTF global tax team has assisted a plethora of companies to navigate the complex tax landscape of different jurisdictions, amongst others, US, China, Hong Kong and Singapore and has helped these companies to better manage their tax functions and achieve their tax and business objectives. To better understand how we help our clients globally, we illustrate the below 2 cases:

Case No 1

A Chinese government-owned pharmaceutical company would like to purchase the assets of a well-known international pharmaceutical company.

1. We helped to analyse the relevant Chinese overseas investment policies and made sure all the processes of foreign currency remittance and purchase of overseas assets are in compliance, thereby minimizing costs and time.

2. We analysed the relevant European country’s tax and transfer pricing policies making sure that the proportion of capital and borrowing in the process of foreign investment is in line with the local tax regulatory requirements.

3. We designed the most suitable investment structure in deciding the right jurisdiction for the holding company and whether or not a middle subsidiary company was necessary. The purpose was to make sure to reduce the complex China administration processes and minimize unnecessary costs.

4. We also attended the business negotiations with the aim to help analyzing the pros and cons of the different solutions brought forward

Case No 2

A US medical equipment company would like to sell medical equipment to Chinese clients.

1. At the pre-investment stage, RTF helped to check whether the company’s specific product catalogue meets with the Chinese regulations and helped to confirm the relevant medical device licenses that have to be applied for. We also guided the client on their China company structure, from a tax and import and export perspective. And we also provided a complete process introduction from obtaining the business license to the injection of the registered capital.

2. During the investment process, RTF applied for all the required licenses and coordinated with the relevant Chinese and foreign government agencies to ensure a smooth and fast investment.

3. After the company’s establishment, RTF not only provided the corresponding accounting and tax return services to the client, but we also introduced the fiscal and taxation policies, the tax arrangements in terms of funds repatriation and the different tax exemptions and holidays available.

The above two cases are just a brief introduction of the tax services that we provide at RTF. Below we also introduce some useful tax information in different jurisdictions.

A. China

Tax	Small tax payer tax	General tax payer tax
Value Added Tax (VAT)	＊ 3%	* 6% for services companies, including finance and insurance companies * 10% for transport companies * 16% for trading companies
Corporate Income Tax (CIT)	＊ 10% or 25%	* 25% for non-high tech companies * 15% for high tech companies * 0%-10% for software companies
Withholding Tax (WCIT, WVAT)	＊ 10% for WCIT ＊ 6% for WVAT	＊ 10% for WCIT ＊ 6% for WVAT

Note: Taxpayers in China are categorized as small taxpayers and general taxpayers. General taxpayers are normally companies with revenue over 5 million RMB and they can issue special VAT invoices, which allows them for VAT deduction.

B. Hong Kong

Value Added Tax (VAT)

＊Not applicable

Corporate Income Tax

＊0% for overseas income

＊8.25 or 16.5% for local income (8.25% is for net Income less than 2 million)

Withholding Tax

＊No withholding tax on dividends and interest

＊2.475% or 4.95% on royalties

C. Singapore

Goods and Services Tax (GST)

＊7%, applicable to GST registered

companies (over 1 million SGD

revenue or voluntarily registered

companies)

Income Tax

＊17%

＊Tax exemption and partial exemption

for new start-up companies

Withholding Tax

＊0%-22% depending on the nature of

income

D. United States

Sales Tax

＊0%-7.25% depending on the states

Corporate Income Tax

＊21%

Withholding Tax

* Wage withholding taxes are based on the

amount of wages less an amount for

declared withholding allowances

* Payments to foreign persons: 30% of the

gross amount of the payment

* Dividends and interest:28% Federal

income tax

For more information or queries, please email us at info@rtfcpa.com

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