George Osborne presented Vice-Premier Ma Kai with a white paper on China’s free trade zones, produced by Grant Thornton in conjunction with TheCityUK and China-Britain Business Council.
* The role of free trade zones
* The role of corporate data collection and transparency
* Data collection, sharing and transparency in China: practice and pilot developments
* The UK approach to corporate data and transparency
* Corporate information collection and transparency The United States of America
* Corporate reporting in Canada
* Successful data collection, utilisation and transparency * Conclusion: Benefits and discussion points
Act to Transform the Tax System of the Commonwealth of Puerto Rico [P de la C...Alex Baulf
Summary of P de la C 2329 “Act to Transform the Tax System of the Commonwealth of Puerto Rico”
- Income Tax
- Sales and Use Tax – Value Added Tax
For transactions after 12/31/15
General rate is 16% on taxable transactions, except for the following which have a 0% rate:
- goods and services for export
- certain imports by manufacturers (Manufacturing Plant Certificate)
For transactions before 1/1/16, taxable items pursuant to 2011 Code will be subject to 16% (instead of 7%).
- Municipalities may not collect
- Treasury will make the payment to the eligible consumer
Grant Thornton Japan tax bulletin - October 2014Alex Baulf
This edition of our newsletter contains details of changes to the taxation of Permanent Establishments in Japan under the AOA (Authorised OECD Approach) and details of new measures being planned by the government to correct an imbalance in the consumption tax treatment on electronics sales for domestic and overseas companies.
Grant Thornton Hungary Tax News - November 2014 en (2)Alex Baulf
Tax Service News from Grant Thornton Hungary:
Grant Thornton Hungary would like to call your attention to the most important tax law changes. Most of the changes will enter into force by 1 January 2015. We indicate separately, if legislation enters into force at a different date.
The information provided herein is of general nature and is based on facts subject to change. Such information may not be regarded and therefore in no way interpreted as accountancy, legal or taxation advice provided to the reader by Grant Thornton Hungary. These materials are not aimed at complying with particular scenarios and to be suitable for application in certain situations, therefore the consideration of certain taxation law and other factors not
discussed herein may be necessary. With regard to this – should you resolve upon any action whatsoever based on the information provided herein – it is recommended to establish contact with Grant Thornton Hungary or other taxation specialists. Amendments of the taxation laws and other factors may influence the contents communicated herein – in certain cases even with retroactive effect. Grant Thornton Hungary assumes no responsibility of informing the readers of these changes.
USA: State & Local Tax Top Stories of 2015Alex Baulf
2015 was notable in large part due to a series of decisions issued by state and federal courts which could pave the way for future resolution of several gray areas in state and local taxation. For example, the U.S. Supreme Court issued several major decisions impacting state and local taxes, including Obergefell v. Hodges and Comptroller of the Treasury v. Wynne. In Obergefell, the Court held that same-sex couples had the right to marry. States that did not recognize same-sex marriage prior to the decision issued guidance on filing returns after Obergefell. In Wynne, the Court determined that the failure of Maryland law to allow a credit against county personal income tax for Maryland residents for their pass-through income from an S corporation’s out-of-state activities that was taxed by other states was unconstitutional.
SYNERGY Global VAT/GST update – Overview of recent changes & what’s on the ho...Alex Baulf
Slides from Thomson Reuters' SYNERGY conference London, 2013 session with Grant Thornton discussing recent topical VAT/GST reform from around the globe. Topics discussed include the China VAT reform, the US Marketplace Fairness Act, GST in India, and the EU VAT changes in 2015.
US SALT Alert: IL Amends Click-Through Nexus Statutes to Address Internet Tax...Alex Baulf
On August 26, Illinois Governor Pat Quinn approved legislation that amends the state’s sales and use tax click-through nexus statutes. In 2013, the Illinois Supreme Court held in Performance Marketing Association, Inc. v. Hamer that the state’s click-through nexus statutes were void and unenforceable due to the federal prohibition against discriminatory state taxes on electronic commerce contained in the Internet Tax Freedom Act (ITFA).The legislation addresses this decision by expanding the nexus provisions to include situations where potential customers are referred to out-of-state retailers by a promotional code or other mechanism beyond an Internet link that allows the retailer to track purchases. Also, the legislation adds provisions that permit the retailer to rebut the presumption of nexus. This legislation is effective January 1, 2015.
Act to Transform the Tax System of the Commonwealth of Puerto Rico [P de la C...Alex Baulf
Summary of P de la C 2329 “Act to Transform the Tax System of the Commonwealth of Puerto Rico”
- Income Tax
- Sales and Use Tax – Value Added Tax
For transactions after 12/31/15
General rate is 16% on taxable transactions, except for the following which have a 0% rate:
- goods and services for export
- certain imports by manufacturers (Manufacturing Plant Certificate)
For transactions before 1/1/16, taxable items pursuant to 2011 Code will be subject to 16% (instead of 7%).
- Municipalities may not collect
- Treasury will make the payment to the eligible consumer
Grant Thornton Japan tax bulletin - October 2014Alex Baulf
This edition of our newsletter contains details of changes to the taxation of Permanent Establishments in Japan under the AOA (Authorised OECD Approach) and details of new measures being planned by the government to correct an imbalance in the consumption tax treatment on electronics sales for domestic and overseas companies.
Grant Thornton Hungary Tax News - November 2014 en (2)Alex Baulf
Tax Service News from Grant Thornton Hungary:
Grant Thornton Hungary would like to call your attention to the most important tax law changes. Most of the changes will enter into force by 1 January 2015. We indicate separately, if legislation enters into force at a different date.
The information provided herein is of general nature and is based on facts subject to change. Such information may not be regarded and therefore in no way interpreted as accountancy, legal or taxation advice provided to the reader by Grant Thornton Hungary. These materials are not aimed at complying with particular scenarios and to be suitable for application in certain situations, therefore the consideration of certain taxation law and other factors not
discussed herein may be necessary. With regard to this – should you resolve upon any action whatsoever based on the information provided herein – it is recommended to establish contact with Grant Thornton Hungary or other taxation specialists. Amendments of the taxation laws and other factors may influence the contents communicated herein – in certain cases even with retroactive effect. Grant Thornton Hungary assumes no responsibility of informing the readers of these changes.
USA: State & Local Tax Top Stories of 2015Alex Baulf
2015 was notable in large part due to a series of decisions issued by state and federal courts which could pave the way for future resolution of several gray areas in state and local taxation. For example, the U.S. Supreme Court issued several major decisions impacting state and local taxes, including Obergefell v. Hodges and Comptroller of the Treasury v. Wynne. In Obergefell, the Court held that same-sex couples had the right to marry. States that did not recognize same-sex marriage prior to the decision issued guidance on filing returns after Obergefell. In Wynne, the Court determined that the failure of Maryland law to allow a credit against county personal income tax for Maryland residents for their pass-through income from an S corporation’s out-of-state activities that was taxed by other states was unconstitutional.
SYNERGY Global VAT/GST update – Overview of recent changes & what’s on the ho...Alex Baulf
Slides from Thomson Reuters' SYNERGY conference London, 2013 session with Grant Thornton discussing recent topical VAT/GST reform from around the globe. Topics discussed include the China VAT reform, the US Marketplace Fairness Act, GST in India, and the EU VAT changes in 2015.
US SALT Alert: IL Amends Click-Through Nexus Statutes to Address Internet Tax...Alex Baulf
On August 26, Illinois Governor Pat Quinn approved legislation that amends the state’s sales and use tax click-through nexus statutes. In 2013, the Illinois Supreme Court held in Performance Marketing Association, Inc. v. Hamer that the state’s click-through nexus statutes were void and unenforceable due to the federal prohibition against discriminatory state taxes on electronic commerce contained in the Internet Tax Freedom Act (ITFA).The legislation addresses this decision by expanding the nexus provisions to include situations where potential customers are referred to out-of-state retailers by a promotional code or other mechanism beyond an Internet link that allows the retailer to track purchases. Also, the legislation adds provisions that permit the retailer to rebut the presumption of nexus. This legislation is effective January 1, 2015.
Mexico - Electronic Accounting Records for Tax purposesAlex Baulf
The Mexican Congress has passed a series of amendments to the Federal Tax Code for the purpose of modernizing and facilitating the compliance and enforcement of tax obligations. With effect July 2014, the Tax Administration Service (SAT) will require tax payers to submit electronic accounting records - in essence, a standard audit file for tax purposes (SAF-T). This alert (translated from the original tax alert in Spanish) provides a high level commentary of the new requirements.
ONESOURCE Workflow Manager - Grant ThorntonAlex Baulf
As a Certified Implementer, Grant Thornton receives
the required training to help multinational companies
with their implementation of ONESOURCE WorkFlow
Manager and ONESOURCE Indirect Tax. Grant
Thornton's international team brings both the technical
skillsets and well as the tax technical experience to a
single project team for implementations
Email Grant Thornton: taxautomation@uk.gt.com
Circular Letter n. 1/2014
Deadlines timesheet 2014
Milan, 08/01/2014
We are sending you the deadline timesheet for the tax fulfilments for 2014. The deadlines indicated in the chart below mainly refer to those taxpayers whose fiscal year is coincident with the solar year.
We will take care of pointing out possible modifications of these deadlines due to amending measures that might be approved on a future date.
ONESOURCE Indirect Tax Compliance - Grant ThorntonAlex Baulf
As a Certified Implementer, Grant Thornton receives
the required training to help multinational companies
with their implementation of ONESOURCE WorkFlow
Manager and ONESOURCE Indirect Tax. Grant
Thornton's international team brings both the technical
skillsets and well as the tax technical experience to a
single project team for implementations
Email Grant Thornton: taxautomation@uk.gt.com
Slovak Republic: Grant Thornton Tax Newsletter - September 2016Alex Baulf
1. The New Union Customs Code
2. Amendment of the Act on Administration of Taxes Amendment of the Income Tax Act
3. Prepared amendment of the Act on Value Added Tax
4. Obligatory activation of electronic mailboxes from 1 August 2016
5. Simple Joint-Stock Company, Breakthrough for venture capital in Slovakia
This Memorandum summarizes an overview of economy for the year 2015-2016 and the important changes proposed through the Finance Bill 2016. It contains comments on the budget and on the Finance Bill 2016, including highlights of the changes brought through the Income Tax Ordinance, 2001, the Sales Tax Act, 1990, the Federal Excise Act, 2005, the Customs Act, 1969, the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 and Fiscal Responsibility and Debt Limitation Act, 2005. The amendments proposed through the Income Tax Ordinance, 2001 and through other laws are intended to be effective once the parliament has accorded its assent and thereafter, would be effective from July 01, 2016 i.e. tax year 2017 unless otherwise indicated.
This Memorandum is intended to provide general guidance to the readers on the important changes brought through the Bill and should not be considered as a substitute for specific advice relating to a particular enactment. For considering the precise effect of a proposed change, reference should be made to the appropriate wordings in the relevant statutes and the notifications issued where relevant.
Brexit: The customs impact on UK businessesAlex Baulf
Following the referendum vote on 23 June 2016, the UK has voted to leave the EU. Exactly when this will happen and how is not yet known. In the coming months, the UK will be expected to submit its withdrawal notice to the EU Council -under Article 50 of the Treaty on European Union (TEU) -to formally notify the EU of its withdrawal. The notification will trigger a two-year notice period and negotiations on the terms of a UK exit will begin. Until then, UK businesses should continue to comply with and trade under the existing Union Customs Code (UCC) that entered into force on 1 May 2016.
Assuming that 'Brexit' does eventually happen, businesses need to:
• assess the risks and opportunities that this poses for their supply chain
• where possible, put in place plans to manage these changes, to ensure their activities run smoothly and mitigate the potential impact, and
• take appropriate steps to prepare for the ‘unknown’.
Unless there is a dramatic 'U' turn, it seems clear that, at some point in the future, the UK will leave the EU. From a UK business perspective such a move will not only present many challenges, but will also provide opportunities.
The vote to leave will continue to create considerable uncertainty until the details of any agreement(s) are known. Businesses affected by Brexit will need to plan for that uncertainty and will need to understand the potential impacts. For this reason, a supply chain impact assessment is prudent and should help to provide some clarity in relation to a business’s exposure.
Tax management within multinational enterprises (MNEs) has never been more challenging. 'Getting to grips with the BEPS Action Plan' is the latest Grant Thornton report exploring the OECD’s planned overhaul of the international tax system, what it means for businesses and how they can prepare.
Introduction. The Whitlock Company is public accounting firm t.docxnormanibarber20063
Introduction.
The Whitlock Company is public accounting firm that I have been working with for the past six years. In the six years I have ensured that I have worked hard and provide my worth through accomplishing the various tasks assigned to me and in the process sharpening my skills and potential. It is for this reason the top management promoted me to the position of head of legal advisor to our clients on matters pertaining the client aspirations to venture into international business. My responsibilities will therefore be advising the clients on the pros and cons of the international business and how to go about.
Whitlock Company where I have been given a promotion.
My hard work , show of skills and potential led to me been promoted.
My responsibility on promotion will entail advising clients on international business.
1
Cont.
The company has made much progress since I joined three years later after its establishment and during those years, it has made remarkable milestones which has made it be recognized worldwide. The company is located in Netherlands where its main office is and has several branches all over the world. Some of the service that it offer include; Auditing, Public Accounting, Taxation Accounting, Forensic Accounting and Book keeping.
Environmental issues affecting accounting diversity
The rule and regulations of accounting are affected by different factors which include:
Economic environment
This provide the structure and information that need to be reported and hence a major influence of the financial reporting framework which comprises of:
Economic openness: this is a good environment for investors since it give the notch of good reporting of accounts. With improved reporting of accounts, there is a high interest in investing in such as country.
Privatization: this lead to the availability if finances publicly and have been adopted by various countries such as Pakistan and Iran. It is through privatization that there was need to adopt the International Financial Reporting Standards. (IFRS) in many countries.
Economic development stage: this is possible through raising of more capital and adopt different accounting practices that will ensure development. Hence the framework of the accounting practice have a lot in economic development.
International trade: the method of approach of international trade affect the framework of accounting that have been used national wise. Hence adoption of the IFRS is not easy for many countries but it paramount for all.
Economic environment entails:
Economic openness
Privatization
Economic development stage
International trade
3
Political environment
There is a major link between the economic system and the political environment in the determination of the practices to be carried out for rules and regulations. A country political system is very important in the determination of its financial reporting. Developed countries whose democracy if highly rated they .
Mexico - Electronic Accounting Records for Tax purposesAlex Baulf
The Mexican Congress has passed a series of amendments to the Federal Tax Code for the purpose of modernizing and facilitating the compliance and enforcement of tax obligations. With effect July 2014, the Tax Administration Service (SAT) will require tax payers to submit electronic accounting records - in essence, a standard audit file for tax purposes (SAF-T). This alert (translated from the original tax alert in Spanish) provides a high level commentary of the new requirements.
ONESOURCE Workflow Manager - Grant ThorntonAlex Baulf
As a Certified Implementer, Grant Thornton receives
the required training to help multinational companies
with their implementation of ONESOURCE WorkFlow
Manager and ONESOURCE Indirect Tax. Grant
Thornton's international team brings both the technical
skillsets and well as the tax technical experience to a
single project team for implementations
Email Grant Thornton: taxautomation@uk.gt.com
Circular Letter n. 1/2014
Deadlines timesheet 2014
Milan, 08/01/2014
We are sending you the deadline timesheet for the tax fulfilments for 2014. The deadlines indicated in the chart below mainly refer to those taxpayers whose fiscal year is coincident with the solar year.
We will take care of pointing out possible modifications of these deadlines due to amending measures that might be approved on a future date.
ONESOURCE Indirect Tax Compliance - Grant ThorntonAlex Baulf
As a Certified Implementer, Grant Thornton receives
the required training to help multinational companies
with their implementation of ONESOURCE WorkFlow
Manager and ONESOURCE Indirect Tax. Grant
Thornton's international team brings both the technical
skillsets and well as the tax technical experience to a
single project team for implementations
Email Grant Thornton: taxautomation@uk.gt.com
Slovak Republic: Grant Thornton Tax Newsletter - September 2016Alex Baulf
1. The New Union Customs Code
2. Amendment of the Act on Administration of Taxes Amendment of the Income Tax Act
3. Prepared amendment of the Act on Value Added Tax
4. Obligatory activation of electronic mailboxes from 1 August 2016
5. Simple Joint-Stock Company, Breakthrough for venture capital in Slovakia
This Memorandum summarizes an overview of economy for the year 2015-2016 and the important changes proposed through the Finance Bill 2016. It contains comments on the budget and on the Finance Bill 2016, including highlights of the changes brought through the Income Tax Ordinance, 2001, the Sales Tax Act, 1990, the Federal Excise Act, 2005, the Customs Act, 1969, the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 and Fiscal Responsibility and Debt Limitation Act, 2005. The amendments proposed through the Income Tax Ordinance, 2001 and through other laws are intended to be effective once the parliament has accorded its assent and thereafter, would be effective from July 01, 2016 i.e. tax year 2017 unless otherwise indicated.
This Memorandum is intended to provide general guidance to the readers on the important changes brought through the Bill and should not be considered as a substitute for specific advice relating to a particular enactment. For considering the precise effect of a proposed change, reference should be made to the appropriate wordings in the relevant statutes and the notifications issued where relevant.
Brexit: The customs impact on UK businessesAlex Baulf
Following the referendum vote on 23 June 2016, the UK has voted to leave the EU. Exactly when this will happen and how is not yet known. In the coming months, the UK will be expected to submit its withdrawal notice to the EU Council -under Article 50 of the Treaty on European Union (TEU) -to formally notify the EU of its withdrawal. The notification will trigger a two-year notice period and negotiations on the terms of a UK exit will begin. Until then, UK businesses should continue to comply with and trade under the existing Union Customs Code (UCC) that entered into force on 1 May 2016.
Assuming that 'Brexit' does eventually happen, businesses need to:
• assess the risks and opportunities that this poses for their supply chain
• where possible, put in place plans to manage these changes, to ensure their activities run smoothly and mitigate the potential impact, and
• take appropriate steps to prepare for the ‘unknown’.
Unless there is a dramatic 'U' turn, it seems clear that, at some point in the future, the UK will leave the EU. From a UK business perspective such a move will not only present many challenges, but will also provide opportunities.
The vote to leave will continue to create considerable uncertainty until the details of any agreement(s) are known. Businesses affected by Brexit will need to plan for that uncertainty and will need to understand the potential impacts. For this reason, a supply chain impact assessment is prudent and should help to provide some clarity in relation to a business’s exposure.
Tax management within multinational enterprises (MNEs) has never been more challenging. 'Getting to grips with the BEPS Action Plan' is the latest Grant Thornton report exploring the OECD’s planned overhaul of the international tax system, what it means for businesses and how they can prepare.
Introduction. The Whitlock Company is public accounting firm t.docxnormanibarber20063
Introduction.
The Whitlock Company is public accounting firm that I have been working with for the past six years. In the six years I have ensured that I have worked hard and provide my worth through accomplishing the various tasks assigned to me and in the process sharpening my skills and potential. It is for this reason the top management promoted me to the position of head of legal advisor to our clients on matters pertaining the client aspirations to venture into international business. My responsibilities will therefore be advising the clients on the pros and cons of the international business and how to go about.
Whitlock Company where I have been given a promotion.
My hard work , show of skills and potential led to me been promoted.
My responsibility on promotion will entail advising clients on international business.
1
Cont.
The company has made much progress since I joined three years later after its establishment and during those years, it has made remarkable milestones which has made it be recognized worldwide. The company is located in Netherlands where its main office is and has several branches all over the world. Some of the service that it offer include; Auditing, Public Accounting, Taxation Accounting, Forensic Accounting and Book keeping.
Environmental issues affecting accounting diversity
The rule and regulations of accounting are affected by different factors which include:
Economic environment
This provide the structure and information that need to be reported and hence a major influence of the financial reporting framework which comprises of:
Economic openness: this is a good environment for investors since it give the notch of good reporting of accounts. With improved reporting of accounts, there is a high interest in investing in such as country.
Privatization: this lead to the availability if finances publicly and have been adopted by various countries such as Pakistan and Iran. It is through privatization that there was need to adopt the International Financial Reporting Standards. (IFRS) in many countries.
Economic development stage: this is possible through raising of more capital and adopt different accounting practices that will ensure development. Hence the framework of the accounting practice have a lot in economic development.
International trade: the method of approach of international trade affect the framework of accounting that have been used national wise. Hence adoption of the IFRS is not easy for many countries but it paramount for all.
Economic environment entails:
Economic openness
Privatization
Economic development stage
International trade
3
Political environment
There is a major link between the economic system and the political environment in the determination of the practices to be carried out for rules and regulations. A country political system is very important in the determination of its financial reporting. Developed countries whose democracy if highly rated they .
A Brave New World and Tax Transparency Bruce Zagaris
This paper discusses the pressure imposed on selected U.S. gatekeepers by international organization initiatives. It focuses on U.S. lawyers engaged in gatekeeping activities, and then considers the accounting profession insofar as it is engaged in tax and financial planning and independent audits. Finally, it looks at auctioneers., Tax Management Int'l J.
Bahrain: Phased roll out of VAT in BahrainAlex Baulf
The National Bureau of Taxation, operating under the Ministry of Finance, conducted their first VAT briefing session on 3rd December 2018 which was attended by several accounting firms. MOF presented the way forward on VAT implementation and addressed several concerns raised during the meeting. In light of this discussion, Grant Thornton Bahrain's VAT team has set out the key takeaways in the attached Alert.
UK: VAT alert - Government publicises VAT changes if there is “no-deal” on B...Alex Baulf
Not that it is expecting a ‘no-deal’ scenario – the UK Government has specifically emphasised that it fully expects the opposite - but, just in case, it has announced a number of measures relating to UK VAT should agreement between the EU and the UK not materialise.
The Government considers that it is progressing well in its negotiations with the EU on the terms of Britain’s exit. However, rightly, it recognises that it is always possible that agreement will not be reached. As a consequence, it has made announcements in relation to VAT in the event of a so-called Brexit ‘no-deal’.
UK businesses – especially those that trade with businesses in other Member States of the EU have had concerns on a number of fronts, not least how the UK VAT system will work after Brexit and what changes will be needed in relation to import and export procedures.
The announcements made by the Government should help businesses to prepare for a ‘no-deal’ Brexit with a little more certainty. In line with the Government, businesses should not assume that an agreement will be reached. Businesses should be prepared for a ‘no-deal’ scenario even though that may not come to fruition.
The Court of Appeal has released its judgment in Adecco UK Ltd & Ors (Adecco). In dismissing Adecco’s appeal the Court confirmed the decisions of the First Tier Tribunal (FTT) and Upper Tribunal (UT) that Adecco’s supplies of temporary staff under its ‘non-employment’ contract arrangements were liable to VAT on the full value of the supply by Adecco to the client. Adecco contended that it was liable to VAT only to the extent of its administrative and ancillary charges to the client. In its view, any charges relating directly to the costs of paying temps were not liable to VAT.
Adecco’s supplies of the services of ‘employed’ temps and ‘selfemployed’ temps were not in question. The dispute centred around ‘non-employed’ temps. In the case of ‘non-employed’ temps, the Court determined that the extent of control exerted by Adecco, the fact that Adecco met the temp’s PAYE/NIC and similar obligations was significant. Further, the Court found that there were no material differences in contracts with clients whether Adecco were placing employed or non-employed temps, such that the client would be unaware of any distinction. Adecco supplied the services of temps to clients. Adecco’s appeal dismissed.
The First Tier Tribunal (FTT) has released its decision in the case of The Rank Group plc (Rank). Rank operated 3 types of automated gambling machine: Fixed Odds Betting Terminals (FOBT), section 16/21 and section 31/34 machines. The issue for the FTT to consider was whether the machines were ‘similar’. If so, treating them differently for VAT purposes would offend the principle of neutrality. The CJEU had previously held that the machines in question fell within the same category (broadly referred to as slot machines). However, it was for the UK court to decide whether the machines in question were ‘similar’. If so, treating the income from such machines differently for VAT purposes would be considered to offend the principle of fiscal neutrality. The FTT determined that the correct test was to examine the betting experience from the perspective of the user. Would the user’s needs be equally met whichever machine was selected? In examining the evidence, the FTT concluded that the user experience was substantially similar and that users would select machines for a variety of reasons, often playing machines interchangeably. On the basis that such factors as machine location, atmosphere, opening hours and availability were specifically stated by the CJEU to be disregarded in this context, the FTT concluded that the machines were similar. Accordingly, the principle of fiscal neutrality was offended. Rank’s appeal allowed.
The Court of Appeal has issued a unanimous judgment in the appeal by Zipvit Ltd (Zipvit) against the judgment of the Upper Tribunal. Zipvit, like many other businesses, contracted with Royal Mail to supply delivery services. At the relevant time, these services were treated by Royal Mail, Zipvit and HMRC as being exempt from VAT under the UK’s implementation of the ‘postal services’ exemption.
However, following the Court of Justice judgment in the ‘TNT’ case in 2009 (which ruled that VAT exemption only applied to universal postal services), it became clear to all parties (including HMRC) that the mailmedia service provided by Royal Mail should have been liable to VAT at the standard rate.
On that basis, Zipvit submitted a claim for a refund of the input VAT purportedly included in the price it had paid to Royal Mail. HMRC rejected that claim and Zipvit appealed to the First-tier Tax Tribunal (FTT). The FTT dismissed the appeal as did the Upper Tribunal.
Now, the Court of Appeal has dismissed Zipvit’s appeal. The judgment issued on 30 June 2018 dismisses the appeal on the basis that Zipvit had no valid VAT invoice to support its claim. A fact regarded as a fatal flaw.
This case - a referral to the Court of Justice by the French court - delivers the judgment of the European Court with regard to the recovery of input VAT on expenditure incurred by Marle Participations SARL (‘Marle’). The company sought to recover input VAT on expenditure incurred on expenses relating to a corporate restructure. The tax authorities denied input VAT recovery on the grounds that the expenditure related to activities that were capital in nature and so fell outside the scope of VAT (thereby precluding VAT recovery). Marle argued that the letting of property by the holding company to a subsidiary amounted to ‘involvement in the management’ of the subsidiary. This involvement constituted an ‘economic activity’ so enabling VAT to be recovered on the restructuring costs.
The Court has ruled that the letting of property to its subsidiary amounted to ‘involvement in the management’ of that subsidiary. As such it constituted an ‘economic activity’ carrying the right, in principle, to input VAT recovery. Such input VAT recovery was to be regarded as general expenditure of Marle (and therefore subject to the normal rules governing VAT recovery). Providing the letting services were supplied by Marle on a continuing basis, for consideration, the services were taxable and Marl could demonstrate a direct link between those services to its subsidiary and the consideration it received, input VAT could be deducted in full.
International Indirect Tax - Global VAT/GST update (June 2018)Alex Baulf
High level slides from Grant Thornton's VAT Club seminar in London held in June 2018.
Topics covered include:
ECJ decision - C-580/16 Hans Bühler - Triangulation
Netherlands - VAT rate change
Russia - VAT rate change
Bahamas - VAT rate change
Angola - New VAT system
Liberia - New VAT system
Costa Rica - New VAT system
Costa Rica - e-invoicing requirements
Hungary - Electronic Invoicing
Italy - Mandatory e-invoicing
Australia - GST on hotel accommodation
Poland - VAT split payments
Spain - First penalties in relation to SII
Greece - SAF-T & E-Invoicing?
Argentina - VAT on digital services
Columbia VAT on digital services
Canada - Quebec: New QST obligations for non-resident suppliers of digital services
USA: Wayfair – the Decision
India - “Happy Birthday GST" - what's next
New Zealand - Low value consignment relief
Malaysia - GST to 0% and transition to SST
United Arab Emirates - Exchange Rates for VAT purposes
Kuwait - VAT postponed until 2021?
GCC - Bahrain, Oman, Qatar VAT implementation latest
The Spanish Tax Authorities have announced that they start to impose penalties for the non-compliance with the Immediate Supply of Information on VAT (ISI). The ISI entered into force last 1 July 2017, but the appropriate regulation of certain specific penalties did not come into effect until 1 January 2018.
On May 3, 2018, Georgia Governor Nathan Deal signed H.B. 61 enacting significant changes to sales and use tax laws, including imposing a bright-line nexus rule on certain sellers of tangible personal property. Effective January 1, 2019, any seller that conducts 200 or more separate retail sales of tangible personal property for Georgia delivery or obtains more than $250,000 in gross revenue from such sales is considered a dealer that must either register to collect and remit sales tax or notify customers of use tax obligations and report to the state that such requirements have been fulfilled.
U.S. Supreme Court Holds Hearing in South Dakota v. WayfairAlex Baulf
On April 17, 2018, the U.S. Supreme Court considered oral arguments in South Dakota v. Wayfair, a case that may have groundbreaking implications with respect to sales and use tax nexus standards. Last year, the South Dakota Supreme Court unanimously affirmed a circuit court’s decision that a law requiring certain remote sellers that do not have a physical presence in South Dakota to collect sales tax on sales made in the state is unconstitutional. In affirming the circuit court, the South Dakota Supreme Court agreed that the law violates the physical presence requirement for sales and use taxes under Quill v. North Dakota and its application of the Commerce Clause. The U.S. Supreme Court decided to consider the case and recently heard oral arguments. Mark Arrigo, Matthew Melinson, Jamie Yesnowitz and Jeremy Jester from Grant Thornton LLP attended the hearing and provide their observations in this Alert.
As a supplement to Grant Thornton China's China Tax Alert, China Tax Bulletin aims to provide you with a prompt and high level overview on the latest tax rules released by various authorities, especially those by China SAT and local tax authorities. Implications for your business are also presented for the tax rules.
The latest issue of China Tax Bulletin covers the following topics:
* New Rules Issued on Deferral of Withholding Tax on Dividends Paid to Foreign Investors and Reinvested in China
* SAT Releases 2017 Enterprise Income Tax Return Forms Clarifications on the filing of tax exemption for cross-border taxable activities and other VAT-related issues
* Government Issues More Guidance Clarifying Issues Arising from VAT Reform
State Administration of Taxation Further Clear the Determination of “Beneficial Owner”
We hope you can like our sharing and find it beneficial to your daily business. At the same time, please feel free to contact us for any further clarification on any of the covered tax issues.
International Indirect Tax - Global VAT/GST update (March 2018)Alex Baulf
These are the slides from the International Indirect Tax - Global VAT/GST update presented at Grant Thornton's VAT Club held in London on 9th March 2018.
The topics discussed include:
EU
• Bulgarian Presidency
• VAT Action Plan – proposal for a Definitive VAT System based on destination principle
• Customs: Binding Valuation Information (BVI)
• Considerations for using TP for Customs value
• Hungary: Electronic Invoicing
• Spain: SII 1.1 new version
• Italy: Simplifications to “Communications of data of invoices issued and received”
• Italy: Mandatory e-invoicing?
EMEA
• South Africa: VAT rate increase
• GCC – where are we?
• UAE: What's been released ? What's missing? Designated Zones
NOAM
• USA: Landmark sales tax nexus case to be heard in Supreme Court
APAC
• India: GST update
• China: Further VAT reform
• Malaysia: GST Compliance Assurance Program (MyGCAP)
• Singapore: Future GST rate increase / reverse charge
• Australia: Final guidance published for online retailers - GST on low value imported goods
This publication has been prepared only as a high level guide. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material in this publication.
China: Tax Bulletin-Latest update on VAT RegulationsAlex Baulf
Subsequent to Grant Thornton China's last update in July 2017, this VAT Alert summarizes some of the further significant changes on VAT regulations for your reference.
- Revision of the “Provisional Regulations of the People's Republic of China on Value-added Tax” (Referred to as “VAT regulation revision 2017“)
- Clarification on Input VAT Issues
- VAT regulations on specified financial products
- Changes on VAT invoices
- Simplified tax administration on registration of general VAT payers
India: Recommendations from GST Council in 25th meeting Alex Baulf
The GST council in its 25th council meeting held on 18 January 2018 in New Delhi, recommended various changes to the GST law. The changes, inter alia, include revision of rates applicable to certain goods/services, introduction of exemptions, and rationalisation of various existing exemptions etc.
Serbia: Tax Alert - Amendments of Serbian Tax Laws (Dec 2017)Alex Baulf
On 14 December 2017, the Serbian Parliament adopted amendments to the VAT Law, which were published in the Official Gazette of the Republic of Serbia No.113/2017.
The adopted amendments will go into force on January 1 2018, with exception of certain provisions for which it is particularly emphasized.
On 14 December 2017, the Serbian Parliament adopted amendments to the Corporate Income Tax Law, which were published in the Official Gazette of the Republic of Serbia No.113/2017.
The adopted amendments will go into force on January 1 2018, with exception of provisions regulating withholding taxation. The majority of provisions shall be applied starting from the filing of tax return for 2018.
Please see a high level overview of these changes in the Tax Alert from Grant Thornton Serbia.
USA: NY - New York Appellate Division Holds Certain Data Information Services...Alex Baulf
The New York Supreme Court, Appellate Division has held that the competitive price reports purchased by a supermarket retailer were considered to be information services that qualified for a statutory exclusion from sales tax. The Court concluded that the information services were excluded from sales tax because the information was personal or individual in nature and was not substantially incorporated into reports of others.
UK: Briefing Paper - Are you ready for Making Tax Digital? Alex Baulf
The UK government is going ahead with its Making Tax Digital (“MTD”) programme, starting with VAT-registered taxpayers. From 1 April 2019, businesses with a turnover above the VAT registration threshold will be required to keep specified minimum records in the VAT account and to submit the current nine- box VAT return to HMRC via Application Program Interface (“API”) software (linking either the accounting system or excel spreadsheets to the HMRC system).
As a supplement to Grant Thornton China's China Tax Alert, China Tax Bulletin aims to provide you with a prompt and high level overview on the latest tax rules released by various authorities, especially those by China SAT and local tax authorities. Implications for your business are also presented for the tax rules.
The latest issue of China Tax Bulletin covers the following topics:
Preferential tax deduction regarding R&D expenses extended to small and medium sized technology enterprises;
New value-added tax rules applicable to assets management products;
Clarifications on the filing of tax exemption for cross-border taxable activities and other VAT-related issues;
Key updates relating to the issuance of VAT invoices;
Widened scope of income tax incentives for small low profit enterprises;
New issued catalogue of industries for guiding foreign investment;
New administration guidance on China withholding tax; and
Detailed guidance on scope of concentration of super pre-tax deduction for R&D costs.
Cyprus: VAT Alert - VAT on building land, leasing of commercial immovable pro...Alex Baulf
Following much anticipation and speculation the Cyprus Parliament has enacted far reaching amendments to the Cyprus VAT Law on 3/11/2017 which impact transactions related to immovable property. The amending legislation (N157(1) of 2017) was published in the Official Gazette of the Republic of Cyprus on 13/11/2017.
• A significant part of the aforementioned changes involve the imposition of VAT on the supply of land. These amendments to the Cyprus VAT Law were a condition of Cyprus’ accession to the EU in 1/5/2004 for which a derogation was secured until 31/12/2007. Their enactment brings Cyprus in line with the obligations undertaken within this scope.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
Monthly Economic Monitoring of Ukraine No. 232, May 2024
China Free Trade Zones discussion paper: Regulating a Free Trade Zone – Simplifying data collection and improving transparency
1. China Free Trade Zones discussion paper
Regulating a Free Trade Zone –
Simplifying data collection and
improving transparency
SEPTEMBER 2014
2. contents
1. Executive Summary 4
2. Introduction: The role of free trade zones 5
3. The role of corporate data collection and transparency 6
4. Data collection, sharing and transparency in China:
practice and pilot developments 8
5. The UK approach to corporate data and transparency 11
6. Corporate information collection and transparency in
The United States of America 14
7. Corporate reporting in Canada 15
8. Successful data collection, utilisation and transparency 16
9. Conclusion: Benefits and discussion points 18
3. FOREword 3
Regulating a Free Trade Zone – Simplifying data collection and improving transparency | 2014
Foreword
I am honoured to chair the International Experts Consultation Group which has been
established to assist Chinese policymakers in their key task of developing Free Trade
Zones. The Group brings together experienced practitioners from a wide variety of
backgrounds and nationalities. It provides an extensive knowledge bank which China
can use and adapt as the Free Trade Zones evolve.
This Discussion Paper is one of a series that is being produced in response to specific
requests from Chinese policymakers. We hope that it will provide practical support to
the development of the Free Trade Zones policy to the benefit of China and its people.
Successful Free Trade Zones will be an important catalyst for economic reform and will
greatly enhance international trade and investment flows. This will have a direct and
positive impact on increasing global prosperity.
I am very grateful to those who have contributed their insights to this paper and who
have given their time so generously to the work of our Group. We look forward to
discussing it in detail and to participating in an ongoing dialogue with Chinese experts
in future seminars and workshops.
Sir Gerry Grimstone
Chairman, TheCityUK
4. 4 1. Executive Summary
1 Executive Summary
This paper looks at developments in corporate data
collection and transparency in the China (Shanghai) Free
Trade Pilot Zone (Shanghai FTZ) and current practices in
the United Kingdom, the USA and Canada, based on
the work of Grant Thornton’s network of China Services
Groups across the world.
It is designed to provide insight into international
practices, consideration of the benefits of a well-balanced
policy in this regard, and a basis for discussion
regarding future developments in data collection,
utilisation and transparency within free trade zones
across China, and in turn, the possibility of expanding
these measures nationwide.
The benefits
Free trade zones are designed to help drive the economy,
attract investors, streamline government regulation,
promote administrative reform, and test and devise
a path for further economic development. Refining
data collection and transparency are relatively straight-forward
ways of furthering all these aims. A good data
collection and utilisation system increases efficiency
and productivity, improves competitiveness, fosters
innovation and encourages investment. In addition, the
right balance of transparency within a robust data policy,
improves policy formulation, informs decision making,
advances understanding of business partners and
counterparties, and reduces risk, while also protecting
sensitivities and commercial secrets as appropriate.
Good policy
A good policy is transparent in itself, and published data
policies clarify what is expected of both the companies
providing information, and the departments utilising it.
This also helps policy makers to identify exactly what
information they really require, why this is required
and how it will be used. In turn, this helps ensure that
unnecessary time is not wasted gathering and processing
data that is not needed.
A lighter touch approach to data collection is a theme
of developed markets. This includes clear regular
reporting requirements, which allows businesses to
plan and to devise systems to generate the necessary
information. It also includes more of an emphasis on
filing after the event, rather than before a transaction,
allowing companies to react more quickly to business
opportunities.
Information technology is playing an increasingly
important role in both the collection and processing of
data. Online ‘one-stop’ platforms help to simplify the
reporting process. This is combined with standardisation
and harmonisation, which increases familiarity with
systems, reduces the need to file similar data multiple
times to different agencies, and assists with the sharing
of data between government departments.
The free trade zone opportunity
The question of when to collect data, what to collect,
and how much, is a fine balance. Free trade zones
across China provide an excellent opportunity for
piloting more streamlined platforms and practices, and
to tweak levels of transparency to find the most suitable
solution for China’s circumstances. The Shanghai FTZ
has already begun the transition to a more efficient
system, and many of the elements of a good corporate
data policy are contained within the new platform
being implemented in Shanghai. This paper presents
an overview of these developments, and the systems in
the UK, USA and Canada for comparison and further
debate.
2014 | Regulating a Free Trade Zone – Simplifying data collection and improving transparency
5. 2. introduction: The role of free trade zones 5
2 Introduction:
The role of free trade zones
China stands at a cross roads. Having enjoyed
substantial and prolonged growth and economic
development since opening up its economy over the
past three decades, further reforms are now needed to
continue on this trajectory. Such structural adjustments
will undoubtedly bring risks as well as opportunities.
The Chinese Government is looking to manage these
risks through piloting new policies on a local level
before national implementation. These experiments
are being spearheaded through the use of free trade
zones, and in particular the Shanghai FTZ, which
was described by commerce minister Gao Hucheng
at the opening ceremony as “an experimental field
to conduct economic reform”. It is clear that free
trade zones will develop reforms that can, and will,
be applied more widely if they are successful. This
provides the opportunity to test some important new
policies in a more controllable environment, reducing
risks, before selecting the best and most applicable
reforms for the rest of the country, “crossing the river
by feeling for stones” in the famous words of Deng
Xiaoping.
The free trade zones are designed to encourage
innovation, promote international trade, attract
investment, and diversify and up-skill the economy. The
reforms being introduced to achieve this encompass
supply-side liberalisation, regulatory reform and
financial experimentation.
Market access is being improved for foreign invested
enterprises (FIE), removing and decreasing restrictions
in some sectors and making it easier to establish
companies and operate. For example, financial services
has been identified as a key sector for the region, and
the Shanghai FTZ is easing limitations on the activities
of international banks and financial institutions, as well
as developing a range of international commodities
exchanges.
There will also be a raft of financial reforms over the
three year period demarcated for the Shanghai FTZ.
This will include experimentation with the convertibility
and cross-border use of the RMB, and the People’s
Bank of China is already allowing companies registered
in the FTZ to open special bank accounts and to
convert RMB and transfer capital overseas more freely.
Outbound investment, particularly in foreign securities,
will also be easier for individuals within the zone.
In addition, there are moves towards a greater role
for market forces (rather than regulators) in setting
interest rates.
Piloting regulatory reform will be another pillar of the
Shanghai FTZ, and the authorities have expressed a
desire to establish an administrative environment and
system that is in line with international practices, and
a management system which fits with international
trade and investment standards, as well as enhancing
cooperation among authorities and implementing tax
policies which serve to promote trade.
This clearly requires the further development of data
collection and usage systems. Reforms have already
begun in this area, with new systems such as an online
filing platform, the move towards a ‘negative list’,
and changes to allow some goods into the FTZ before
completing the customs declaration formalities all
being positive steps.
The move by the Chinese government to boost growth
by reform rather than stimulus has received wide
spread acclaim from the international investment
community, and such developments are undoubtedly
important for the future of the free trade zones, and
the wider Chinese economy. However, it is imperative
to strike the right balance between liberalisation and
decreasing red tape, but still managing risk. Making
investment easier for companies is to be welcomed,
but it is also vital to ensure compliance with local laws
and regulations and encourage socially responsible
corporate behaviour, as well as the protection of the
Chinese economy and the maintenance of a robust
regulatory system. A positive policy for corporate data
collection and management will help find this balance.
Regulating a Free Trade Zone – Simplifying data collection and improving transparency | 2014
6. 6 3. The role of corporate data collection and transparency
3 The role of corporate data
collection and transparency
We understand that the aims of the Shanghai FTZ are
to explore new models for liberalising the economy,
streamlining government regulation, promoting
administrative reform and providing a path for further
economic development. The approach to data collection
and transparency are critical to achieving this.
Governments naturally need to collect data from
companies that operate within their borders. This has
many uses including regulation, taxation, monitoring,
planning, public policy, control, and risk management
to name but a few. The starting point for much
government work is to look at the relevant available
data, so having the right type of source material, of the
right quality, is imperative.
The use of data is becoming increasingly sophisticated
as technology allows it to be used in larger volumes
and in different ways, and the utilisation of ‘big data’
is becoming influential, and yielding better informed
decision making. This information is being used by
governments and businesses in new and innovative
ways to improve all kinds of activities, from identifying
tax evasion to public health and transport planning.
Transparency
Transparency is also aiding this process, as open source
and open access data means different government
departments can utilise and understand more
information, as well as allowing the private sector to
exploit it for the benefit of the economy.
Access to specific information about companies can help
investors, consumers, partners, financial institutions,
and many others, to make informed decisions about
them, and the ways to interact with them. However,
an important line must be drawn in terms of ensuring
that commercially sensitive information is protected, and
unregistered intellectual property and trade secrets are
not threatened.
As well as the public availability of the data itself,
a transparent data policy, published by relevant
government departments, is important so that those
affected know what data is required from them for
different bodies, why it is needed, and by when.
2014 | Regulating a Free Trade Zone – Simplifying data collection and improving transparency
7. 3. The role of corporate data collection and transparency 7
The compliance burden
More, and better, data, used in an increasingly
productive and sophisticated manner, can clearly be
an extremely positive force for economic and social
development. However, while there is a temptation to
collect an ever increasing volume of data, this needs to
be balanced with the burden it places on those required
to provide it, the risk of unnecessary information being
requested and processed, and the danger that sensitive
data could be misused.
For companies, the effect of this primarily comes in
the form of their compliance requirements, the regular
information they have to file to comply with relevant
laws and regulations. A heavier compliance burden
means increased costs, less management time to focus
on growth, and reduced efficiency. This means less
wealth is created, less value is added and less people are
ultimately employed.
Corporate data helps the government to manage risk,
ensure laws are followed, and understand business
trends, so reporting is a vital part of a healthy economy.
However, a fine balance needs to be found to ensure
that compliance achieves its goals, but does not
overburden the economic actors.
Encouraging investment
Red tape can skew corporate behaviour, and influence
investment decisions. In the World Bank’s annual ‘Doing
Business’ survey, 17 of the top 20 countries for ease of
doing business are also high income economies. Most of
these are open economies which enjoy a large amount
of foreign investment, creating wealth and employment
for the population, highlighting the link between an
attractive regulatory regime and investment decisions by
corporations.
Research from bodies such as the China-Britain Business
Council and the European Chamber of Commerce in
China, suggest that bureaucracy is a major barrier to
growth for international companies in China, deterring
investment. It goes without saying that international
investors like to operate in environments which are
similar to the international norms to which they are
accustomed. As such, the sort of lighter touch approach
to compliance seen in many developed economies can
help to attract such investment, which in turn can bring
benefits including more employment, technology, skills,
and wealth.
The most simple way of reducing bureaucracy and the
compliance burden, without significantly increasing
risk, is to maximise the simplicity and efficiency of data
collection, and to only collect data that has a clear
purpose. Online portals and data sharing platforms have
an important role to play in this process. The Shanghai
FTZ is clearly beginning to move in this direction.
Regulating a Free Trade Zone – Simplifying data collection and improving transparency | 2014
8. 8 4. Data collection, sharing and transparency in China: practice and pilot developments
4 Data collection, sharing and
transparency in China: practice
and pilot developments
Company formation
Overseas companies setting up businesses in
China have, for years, had to submit a wide variety
of documents to several different government
departments; as such company formation has been a
lengthy process and it can often take over 3 months,
and even longer in some circumstances, before a new
FIE is operational. This dramatically slows down the
speed at which companies can react to opportunities,
and disrupts business plans, deterring investment.
Typically, setting up a wholly foreign owned enterprise
in China requires separate registration with the State
Administration of Industry and Commerce, the Ministry
of Commerce, the Bureau of Quality and Technical
Supervision, the Statistics Bureau, State and Local
Tax Bureaux, and the State Administration of Foreign
Exchange. However, the pilot free trade zones across
China give the opportunity to streamline this process.
The company set-up process in the Shanghai FTZ is
being simplified, and a ‘one-window, one-stop’ online
platform was launched on 10 October 2013 to help
expedite the necessary registration procedures for
FIE. This system allows a company to be formed in
approximately 10 days, dramatically reducing the time
required to start a business in China.
The platform is expected to be developed further
to make company formation increasingly simple for
international investors, and this is an extremely welcome
step to address one of the most burdensome issues for
overseas companies looking at commencing business
operations with China. In addition, further functionality
is being developed for this system for new users, and
new processes.
The use of this platform ties into the introduction of the
‘Negative List’ in Shanghai FTZ. This pilot policy has the
potential to be extremely influential as it transitions from
the practice in the rest of the Mainland of relying on a
list of permitted activities for international companies,
to instead introducing a list of 18 industries in which
activities are restricted. On top of the registration
which can be undertaken through the online platform,
investments on this Negative List will still be subjected
to additional application and registration requirements.
So while the set up process for businesses not on the list
has been simplified, those operating in the 18 industries
on the list will still face a number of extra restrictions,
including rules regarding registered capital, equity ratios,
business performance requirements, and the business
scope that is permissible as per the business licence.
This platform also helps the authorities to collect
first hand data from newly registered companies in a
straight-forward and transparent way, without the need
for multiple filings by the business. This information
includes the holding company, registered capital,
company address, business scope and details of senior
management. The move to share this data appropriately
between government departments, reducing the need
for reporting the same information several times, is
very welcome. Consideration could also be given to
using the same platform for generating up-to-date
publicly available corporate data, providing any sensitive
information is not disclosed.
Annual reporting and public disclosure
A major compliance requirement in China, for both
foreign-invested and domestic-invested companies,
is the annual inspection. This involves several Chinese
government authorities and requires the preparation
and submission of various documents including an
annual audit report.
This practice is beginning to change, and not just in the
free trade zones. Shanghai began to roll out an online
annual reporting mechanism in 2014, which is designed
to replace the requirement for an annual on-site
inspection. However, the implementation of this new
practice varies for each administrative district, and some
districts within Shanghai still require the submission of
documents to the authorities on-site.
On 13 March 2014, trial measures were introduced that
effectively mean that all companies in the Shanghai FTZ
need only provide the annual online report, without the
need for on-site document submission, and also some
of this data is to be publicly available for the first time.
2014 | Regulating a Free Trade Zone – Simplifying data collection and improving transparency
9. 4. Data collection, sharing and transparency in China: practice and pilot developments 9
The online system allows companies in the Shanghai
FTZ to use their electronic identity authentication to
submit their annual report to the Administration of
Industry and Commerce. This is done by logging onto
the Enterprise Credit and Information Disclosure System,
contained within Shanghai Administration of Industry
and Commerce’s web portal. Online filing is required
between 1 March to 30 June each year and, after
submission, the relevant information will be disclosed
to the public. This will provide a major increase the
levels of transparency of corporate data, as every entity
and individual will potentially have online access to this
annual company information through the Enterprise
Credit Information Disclosure System.
Legal entities will need to submit information in
their annual reports including their business address,
registered business scope, any changes to the company’s
articles of association, changes of senior management,
paid-up and registered capital, assets, operational
status, number of employees and contact information.
In addition, annual audit reports, issued by a licensed
accounting firm, shall be required for many businesses,
including listed companies, wholly state-owned and
state-owned holding companies, companies with
subscribed registered capital over RMB 20million,
companies with annual turnover of over RMB 20million,
and enterprises engaging in certain financial services
activities.
Companies that fail to upload their annual report
within the designated period, or cannot be reached via
their business premises, shall be recorded through the
Enterprise Credit and Information Disclosure System on
a ‘black list’, which will be available to the public.
The introduction of online annual reporting and the
associated public disclosure system in the Shanghai FTZ
will greatly assist companies in the region with their
compliance burden, freeing them up to focus more
on their core business. Public disclosures should also
help manage risk and allow economic actors to better
understand the background of the parties they transact
with. We hope to see these reforms continued and
expanded, and these developments clearly demonstrate
the Chinese Government’s positive intention to
further transform the corporate reporting process,
and to promote increasing levels of transparency for
appropriate corporate information.
Tax data and reporting
The State Administration of Taxation has recently
released a notice that promises to support a range of
innovative tax services within the Shanghai FTZ. The
notice (Shui Zong Han [2014] No.298), introduces ten
tax-related services as a step to move the administration
of taxation online, an important step in simplifying data
collection, and one that will also allow more efficient
analysis by the relevant government departments.
The ten online services are: the generation of tax
registration numbers, self-service tax filing, electronic
invoicing, cross-regional tax services for the Shanghai
FTZ, general VAT taxpayer applications, administration
of non-resident taxation, record filing, quarterly return
filing, tax payment credit evaluation and a stated aim
to develop further innovative online services for the
zone. Following the successful implementation of these
somewhat ground-breaking reforms in the Shanghai
FTZ, the State Administration of Taxation has indicated
an interest in further reform and simplification of the
administration of the entire taxation system.
While in the past taxpayers have been required to
visit the tax bureau for the registration of a variety
of documents, and to seek approval from relevant
government departments before the related
transactions, there is a move within Shanghai FTZ
towards ‘post administration’ – shifting supervision and
approvals to later in the process. This has the potential
to reduce many of the delays associated with the
approval process seen in other regions, improving the
efficiency of administration for the government, and
saving time and cost for companies in Shanghai FTZ.
These online tax services are allowing enterprises to
handle an increasing number of issues from their own
offices, reducing the staff time needed for compliance,
and helping to reduce administration costs.
Among the additional improved services that are
being provided to companies in the Shanghai FTZ,
the administrative burden of tax compliance is also
Regulating a Free Trade Zone – Simplifying data collection and improving transparency | 2014
10. 10 4. Data collection, sharing and transparency in China: practice and pilot developments
being reduced through better sharing of data between
government departments. For example, information
sharing between the Science and Technology
Commission, the Shanghai Administration of Industry
and Commence, and the Bureau of Quality and
Technical Supervision has simplified the procedures for
approving tax deductions for research and development
expenses and non-trade payments.
Customs information
For China’s free trade zones to live up to their names,
perhaps the greatest reforms are needed with regard
to customs. The Shanghai FTZ has been experimenting
in this area with an innovative customs supervision
information system, which came into effect on 30 June
2014. This includes an extensive streamlining of the
customs system, reducing some of the documentation
required, standardising declaration procedures, and
automating certain clearance checkpoints.
The new system includes a move towards ‘declaration-after-
entry’, whereby eligible enterprises are now
allowed to bring goods into the zone by presenting the
manifests and then completing the declaration within
14 days.
The payment of duties is being revolutionised as well,
moving away from making sure payments have been
made before they are cleared to ensuring compliance
through auditing, allowing enterprises to pay the
relevant taxes centrally within a prescribed period
after the imports and exports have been released. An
additional reform allows qualifying enterprises, with
effective guarantees, to move some bonded goods
inside and outside the Shanghai FTZ for exhibition, only
paying taxes after any sale.
These moves will be invaluable for exporters and
importers, reducing the scope for delays, as well as
cutting the time and cost of dealing with customs
clearance.
Future plans to build a comprehensive data
collection and supervisory platform within the
Shanghai FTZ
The Shanghai FTZ authorities are planning to take
these reforms further by establishing an integrated
information sharing platform that will connect a
wide variety of authorities which have a bearing on
enterprises in the zone, including the Administration
of Industry and Commence, the Bureau of Quality and
Technical Supervision, Customs, the Tax Bureau, and the
Administration of Foreign Exchange. This platform will
allow the authorities to establish a database to record
operational information for the companies registered
within the pilot zone, and will help combine a range of
functions currently operated across departments, such
as registration and administrative management, daily
supervision, emergency management and credit ratings.
In addition, the intention is to devise a clear mechanism
for information sharing between government agencies
and clarify the responsibilities of each authority for
the purposes of information collection, processing,
transmission, application and feedback to further
improve the platform as it develops.
Along with this integrated platform, the authorities
will also develop a system to disclose appropriate
information to the public. Such transparency will help
to both advocate and ensure compliance, and will also
be a valuable tool for further evaluations of corporate
credibility by individual users.
The changes highlighted above clearly demonstrate
the commitment of the Shanghai FTZ to improve the
approach to data collection, and the usage of that
data, and further reform will broaden and deepen the
impact of this system. Once the system’s robustness
is adequately tested, this should prove a basis for
expansion to further pilot zones, and eventually to the
rest of China, so the whole economy can benefit from
the advantages these improvements will bring.
2014 | Regulating a Free Trade Zone – Simplifying data collection and improving transparency
11. 5. The UK approach to corporate data and transparency 11
5 The UK approach to corporate
data and transparency
The key body in the UK for corporate data collection
is Companies House, which is the national register
of companies. Companies House, which falls under
the Department of Business Innovation and Skills,
is responsible for the registration and provision of
company information. In particular, its stated main
functions are to: incorporate and dissolve limited
companies; examine and store company information
delivered under the Companies Act and related
legislation; and, make this information available to the
public.
As well as registering the formation or closure of a
company, there is also a requirement for UK companies
to file an annual return and also annual accounts with
Companies House. In addition to this, changes to
information such as directors or the registered address
should be made as they occur.
Companies House sees the key elements of an efficient
service as providing up to date information promptly
and accurately, keeping the costs of compliance
to a minimum, keeping down their own costs and
continually looking for ways to make it easier for
customers to send and receive data. Companies House
has used the internet and information technology
to provide a platform for an increasing range of its
services, and now most information can be filed, and
accessed, online.
Incorporation
Companies House offers an online incorporation
application service, whereby information can be
submitted to their web portal, and if the application
is accepted, an email is received within approximately
2 days that confirms the company number and
company name, and provides an electronic version of
the certificate of incorporation and memorandum of
association. Combined with the UK’s relatively relaxed
rules on company formation, this has made it easy
for domestic, and foreign, companies to register their
businesses and start trading in Britain.
Annual compliance
Companies should file an annual return and annual
accounts with Companies House. The annual
return provides a snapshot of a company’s general
information, such as its principal business activities,
directors, secretaries, registered office address,
shareholders and share capital. Annual accounts are
prepared according to UK GAAP or IFRS. These can
be filed online through the Companies House web
portal. To do this, a company must simply register for a
password, which is linked to an email address, and an
authentication code, which is posted to their registered
office.
Event driven filing
Some information must be reported when particular
changes occur within a company, such as the
appointment of a new director, or a change to share
capital. This information needs to be filed with
Companies House so they can update the public
record. The Companies House web filing service also
allows these changes to be updated online. This saves
costs, and increases the speed and efficiency with
which this information can be used and made publicly
available, so users can get an up-to-date picture of the
company.
The public availability of records
The open access of this information means that
Companies House data is utilised by a huge number of
different parties, including government departments,
academics, and private companies, and is used to
both better understand the background of specific
companies, and for wider statistics about UK business.
This transparency also means that the data can be
used in a variety of innovative and productive ways. As
an example, Companies House data forms the basis of
the Touying Tracker, an annual public piece of research
produced by Grant Thornton UK LLP in conjunction
with the China Daily which analyses the fastest
growing Chinese companies in Britain. This showed
that the top 25 UK subsidiaries of Chinese companies
had combined revenues of over £17 billion in 2012,
and employed more than 2,600 people.
Tax data, compliance and filing
Her Majesty’s Revenue and Customs (HMRC) is
responsible for taxation in the UK, including customs
Regulating a Free Trade Zone – Simplifying data collection and improving transparency | 2014
12. 12 5. The UK approach to corporate data and transparency
duties. In general, UK companies have to file distinct
information for each different type of tax that
they are subject to. For corporation tax, the key
information is an annual tax return and computation.
The computation, which is prepared by the company
or their agent, discloses a breakdown of the annual
accounts, the expenditure incurred and the various tax
adjustments necessary to calculate the company’s tax
charge for the period. Separate information must be
filed for other taxes, such as regular VAT returns (often
every three months) and specific documentation for
payroll and employee taxes.
In general terms, almost all compliance documentation
is required after transactions occur, rather than
beforehand. This allows companies and individuals to
react more quickly to economic opportunities, but still
ensures that they comply with relevant regulations.
Almost all tax information is now filed electronically
in the UK. Commercially available tax software can
generate electronic computations and returns that are
compatible with HMRC’s systems, and these can be
filed through the HMRC web portal.
In addition, annual accounts (the same as those filed
with Companies House) must be electronically tagged
for submission to HMRC. This allows smart software to
then analyse accounts and computations to assist tax
inspectors in identifying irregularities.
Transparency and availability of data
Specific individual and corporate tax data remains
confidential. Although, there have recently been some
political moves to make certain information more
publicly available to address tax evasion and avoidance.
However, in addition to administering the UK’s tax
system, HMRC is one of the country’s largest providers
of statistics, publicly releasing over 100 different
statistical products based on the data they receive to
help politicians, academics, companies and individuals
better understand the UK’s economic and social
environment.
UK Customs Data and Trade Statistics
The major data collection tool for customs and trade
information in the UK is CHIEF (Customs Handling of
Import and Export Freight), a computerised system that
helps the UK authorities through three key functions:
the collection of revenue; the accurate collection of
international trade and transport statistics; and risk
assessments to identify which goods to physically
examine.
CHIEF allows customs entries to be completed
electronically, allowing quicker clearance (for goods
considered low risk) when they are imported from
non-EU countries or exported from the UK. The system
also helps to validate the accuracy of data, advising
the processor of any errors or necessary documentary
requirements. For imports it calculates the duties and
taxes incurred by individual importers.
Five independent trade systems connect with CHIEF,
enabling traders to record and track the movement
of goods within controlled border points, so they can
operate more efficiently and ultimately helping to
facilitate trade between businesses.
CHIEF is also used to feed data to Intrastat, the system
that collects statistics on the trade in goods within
the European Union. Changes to European Union
legislation under the Union Customs Code means the
CHIEF system will be unable to accommodate new
legislative requirements, and accordingly HMRC have
introduced a replacement programme that is due to be
fully implemented by 2020.
Customs data transparency
Under the Finance Act of 1988, the UK trade statistics
unit are able to disclose information on imported
goods and make this available to other persons. The
Importer Details database provides access to the
names of businesses importing to the UK from outside
the European Union. However, this information will
only list the business name and address, and the
commodity code imported by month. HMRC also
make ‘Management Support System’ data available
to businesses through four standard reports covering
import, entry, tax and export item data. HMRC can
supply information such as the entry date, commodity
code, Customs Procedure Code, value of goods, origin,
value for customs purposes, value for import VAT, tax
2014 | Regulating a Free Trade Zone – Simplifying data collection and improving transparency
13. 5. The UK approach to corporate data and transparency 13
paid as well as a range of other items of data. However
there is a limit on the release of data, and information
cannot be released to traders if it may compromise
HMRC’s control activities.
Trade statistics
Overseas trade statistics are collated from trade
declarations made using commodity codes (the
numeric system designed to identify specific products).
Businesses must provide details of the quantity and
statistical value of each commodity they export or
import.
Among the data that HMRC makes publicly available
are the UK’s trade statistics. These are largely based
on information generated by the CHIEF system, and
via Intrastat. This data is freely available online and
is used by government departments, international
organisations, academics and businesses, who regularly
utilise this data for market research and economic
analysis purposes. It is published online through the
Government’s main web portal, and is managed by a
specialist trade statistics unit within HMRC. This data
is also used as part of the UK’s balance of payments
calculations.
The Office for National Statistics
The ONS is the UK’s national statistical institute,
responsible for collecting and publishing a wide
variety of data related to the economy, population and
society, as well as conducting the census in England
and Wales every ten years. The ONS, and the UK
Statistics Authority that oversees it, are established
as independent bodies that operate at arm’s length
from government, but are directly accountable to
Parliament. This system is designed to safeguard the
neutrality and independence of the statistics they
produce.
The ONS uses a range of sources for its statistics,
including government departments, and specific
surveys. For its financial data ONS uses information
provided by HMRC and the Bank of England, but
also collects data from less well known organisations
such as the UK Debt Management Office, National
Savings and Investment, the Investment Management
Association and The Insolvency Service.
Financial Conduct Authority
The FCA is the UK’s financial services regulator, and
identifies three types of data that it needs to collect:
core data that is regularly reported to the FCA,
and generally collected via returns filed through an
electronic reporting system; ‘Risk and event’ data
which is collected from a range of companies for a
short period relating to specific risks identified by the
FCA; and, ‘Subject, firm or issue specific’ information,
which can be collected in a range of ways, such as part
of an investigation. This data is stored in a way that,
unless specifically market sensitive, is available across
FCA departments to allow a more cohesive approach.
However, due to the sensitivity of this material it is
generally not used for many wider purposes.
The FCA is in the process of improving its data policy,
and have established a new department to drive this.
They are establishing a system that is more clearly
specified, more regularised, and collected through
controlled channels to ensure consistency. A major
emphasis is being given to providing clear explanations
about why specific data is needed and how it was to
be used, and avoiding unreasonable timescales, which
divert resources and put unnecessary pressure on the
regulated companies. They are also increasing the use
of technology platforms in data collection.
Data policies
As well as the data itself, most UK government
departments also have publicly available data policies
to outline their approach to this issue, increasing
the transparency of how data is used and why it is
collected, improving understanding on the part of the
reporting entity as well as the relevant government
departments.
In addition, the Data Protection Act controls how
personal information is used by businesses and the
government to help ensure that private data is kept
securely and used fairly, lawfully, accurately, and not
excessively. On top of this, the Freedom of Information
Act, gives citizens the right to access recorded
information held by public sector organisations, and
there is a clear procedure to make requests to central
and local government bodies for such material.
Regulating a Free Trade Zone – Simplifying data collection and improving transparency | 2014
14. 14 6. Corporate information collection and transparency in The United States of America
6 Corporate information
collection and transparency
in The United States of America
Public and private corporations operating in the U.S.
are required to file a variety of information with a
range of relevant government departments depending
on the nature of the company and their activities.
These can include the Securities and Exchange
Commission (SEC), Internal Revenue Service (IRS),
Bureau of Labor Statistics, and the Departments of the
Environment to name but a few.
Financial information
Most public corporations are required to file their
quarterly and annual financial audit reports with the
SEC. If filed by domestic companies, these statements
are then available to the public. Unlisted entities, if
they have more than $10 million in assets and their
securities are held by more than 500 owners, must also
file annual and other periodic reports with the SEC,
and these reports are also available to the public. These
SEC reports contain both financial information and
tax disclosures, as well as more general information
including shareholders, board member information,
and the office address.
Electronic data collection began in 1984 with the
introduction of the Electronic Data Gathering, Analysis
and Retrieval System (EDGAR). Public companies,
both foreign and domestic, are required to file
their registration statements, periodic reports, and
other forms electronically through EDGAR, and this
information is then available to the public for free
through the SEC’s website.
In the U.S., private corporations do not need
annual statutory audits, although some require
them if stipulated by debt covenants or financing
arrangements. Private companies’ information is
thus confidential, and private companies have the
ownership of this data, so access to general legal
information regarding specific private companies
depends on whether the company in question has
chosen to share this material (often on their own
website).
Tax information
Both public and private corporations are generally
required to pay federal, state, and in some cases, local
taxes. Tax disclosures are required within the financial
statements filed with the SEC by public corporations,
in addition, the SEC requires tax disclosures for some
specific transactions. Any such disclosures reported
to the SEC are publicly accessible. However, with
very limited exceptions, all tax return information is
confidential and cannot be shared with the public, and
an unauthorised disclosure of tax return information
may result in civil or criminal penalties. Though, where
specifically authorised by a federal statute or tax treaty,
the IRS can (and do) share taxpayer and tax return
information with states and with tax treaty partners.
Statistics
Public and private corporations are also required
to file information regarding their employees and
location with the Bureau of Labor Statistics and other
state governments for statistical purposes, though
filing requirements can vary in different states and
industries. Generalised statistical results are open to
public, however, the governments and the staff who
receive the raw information from corporations have
the obligation of protecting privacy and commercial
secrets.
2014 | Regulating a Free Trade Zone – Simplifying data collection and improving transparency
15. 7. Corporate reporting in Canada 15
7 Corporate reporting in Canada
Starting a corporation
A corporation is set up in Canada by completing the
articles of incorporation, and filing them with the
appropriate provincial, territorial, or federal authorities.
If the business is incorporated federally, this can be
done online, and takes just one business day. The
information required to incorporate federally includes:
the corporation name; the registered office, the
description of classes of shares; restrictions on share
transfers (if any), number of directors, restrictions on
business activities (if any), other provisions (if any), and
the first board of directors.
Tax registration and maintaining a corporation
Companies in Canada generally need a Business
Number. The Canada Revenue Agency has an Auto
Create Arrangement with the federal authority,
and certain provincial authorities. As such, if a new
company is set up under these federal or provincial
authorities, certain incorporation information will be
communicated to the Canada Revenue Agency, who
will automatically generate the Business Number for
the corporation. If the Canada Revenue Agency has
no Auto Create Arrangement with the province or
territory where the company was incorporated, the
company can still register for a Business Number by
providing certain information to the Canada Revenue
Agency.
Almost all resident corporations have to file a
corporation income tax (T2) return every tax year, even
if there is no tax payable. If applicable, a Goods and
Services Tax (GST)/ Harmonized Sales Tax (HST) return
is also required either monthly, quarterly or annually.
Employers also need to deduct payroll taxes at source,
and employees’ income and deductions should be
reported through the appropriate tax forms. When a
business charges its customers or clients for HST, the
customers or clients can confirm with the Canada
Revenue Agency by phone or online whether an HST
number is valid and whether the name of an HST
registrant agrees to the name on the invoice.
Tax data filed with the Canada Revenue Agency is only
accessible by authorised persons, such as the owner,
the key employees and the external accountants and
attorneys (if authorised).
Annual return
Every corporation subject to the Canada Business
Corporations Act (CBCA) must file an annual return
with Corporations Canada every year if its legal
status is active (i.e., not dissolved, discontinued or
amalgamated with another corporation). The annual
return can be filed online via the Corporations Canada
Online Filing Centre or by mail.
The filing fee is also half the price if filed through
the Online Filing Centre, rather than hard copy. The
annual return helps keep the Corporations Canada’s
database of federal business corporations up to date.
This information is available to the public, and can
be utilised by a range of users (such as investors,
consumers, financial institutions and many others) to
make informed decisions about a specific corporation.
Regulating a Free Trade Zone – Simplifying data collection and improving transparency | 2014
16. 16 8. Successful data collection, utilisation and transparency
8 Successful data collection,
utilisation and transparency
The need for a clear and well-established data
framework
The more that companies understand what is required
of them, and why it is required, the easier it is to
comply. Clear communication between firms and
the relevant government departments is vital to this.
Published data policies by relevant agencies and
government departments are an invaluable tool to help
the companies that must supply their information to
understand the data that they need to prepare, and
the reasons for filing.
A transparent policy, with simple and clear instructions
for a limited, but highly relevant, amount of reporting
is vastly preferable to wide ranging requirements with
a lack of focus.
Collecting the right data
A clearly defined framework or policy can also help
departments to analyse what they need to collect
and why.
Reducing the reporting of unnecessary information
is beneficial for both government departments and
companies. More data can mean better informed
decisions, but the burden of supplying and processing
this information can easily outweigh the potential
advantages. The collection of data that has no clear or
defined use merely slows and complicates the system.
Agencies and government departments will find the
process of data collection and management is more
efficient if they focus on what purpose they need to
fulfil, and only request data absolutely necessary for
achieving this.
Simplifying filing and online platforms
The most straight forward way of reducing the
compliance burden, without increasing risk, is
to maximise the simplicity and efficiency of data
collection.
There is a clear movement across the world to
streamline data collection through the use of
information technology. Online portals make the act
of submitting information quicker and cheaper, and
this helps to speed up and simplify the filing process.
This technology can also improve the analysis and
treatment of this information by the government.
In addition, better data sharing platforms across
government departments and agencies can help
prevent the need for double filing of the same, or
similar, information more than once.
Harmonisation and standardisation
A convergence of the platforms and methods used for
different filing requirements with different agencies is
another major step forward. This reduces double filing
and facilitates more straightforward data sharing and
inter-governmental department transparency.
Many countries have now implemented a system
that can be used for company formation, on-going
reporting, and even for dissolving a business, all
through one, user-friendly platform. Nationwide
systems also make it easier for companies to operate in
more than one location.
Standardisation of forms, requests and systems leads
to increased familiarity, which makes it quicker and
easier to use, assisting in the efficiency of preparing
submissions. The provider can easily identify what is
required, and the processor can compile and analyse
the information with more ease. Standardisation of
submissions also assists with the use of online filing
and electronic data storage and analysis platforms.
2014 | Regulating a Free Trade Zone – Simplifying data collection and improving transparency
17. 8. Succefssul data collection, utilisation and transparency 17
Regular and predictable implementation
Along with standardisation, regular reporting periods
make it easier for companies to plan for compliance.
It also means that businesses can build systems to
efficiently collect the required figures.
Ad hoc information requests, unless absolutely
necessary, make resource planning difficult, and
also complicate the use of automated, or simplified,
generation of the necessary material, increasing the
burden of compliance.
A move to collect information regarding specific
transactions after the event can maintain the need
for companies to comply with laws and regulations,
but still allow them to react quickly to business
opportunities.
Data transparency, protection and availability
Easy access to reliable information, such as publicly
filed accounts and credit records, can help improve
corporate decision making and assist directors in
evaluating transactions with partners or counterparties
more accurately. This ultimately reduces risks within the
economic system. However, companies must naturally
provide sensitive information to the government, and it
is vital that the value of transparency is balanced with
the protection of commercially sensitive information.
As more data is collected, utilised and published, a
clear data protection policy, and regulations, helps
to establish and defend the balance of what is
beneficial to society, and what is sensitive for individual
companies.
Regulating a Free Trade Zone – Simplifying data collection and improving transparency | 2014
18. 18 9. Conclusion: Benefits and discussion points
9 Conclusion:
Benefits and discussion points
New pilot systems designed to improve the way data
is collected and treated in free trade zones across
China will bring considerable benefit to both Chinese
companies and international investors. The Shanghai
FTZ is clearly implementing a ground breaking new
approach to data collection in China, and is developing
a system that will put it on a par with international
best practice.
It will reduce the amount of time it takes to provide
the government with the information it needs, and
local companies operating in these areas will be able
to operate more efficiently, and competitively. It will
also prepare Chinese companies for more international
practices, helping them to adapt as they go global, and
increase their own activities overseas.
It will appeal to international companies, who will
be able to set up and run a business more easily,
using a system more familiar to them. This means
they can focus on bringing their technology and
skills to the Chinese market, rather than managing
red tape. A simplified business environment will also
attract more multinationals to relocate more of their
resources to Shanghai, and will begin to encourage a
growing number of companies to establish regional
headquarters in China rather than other locations
across Asia. Ultimately, this will bring more value to the
Chinese economy.
The key to success will be a transparent and
open approach to data through a clear policy,
standardisation, a simple interface, regularised
implementation and of course, the use of technology.
Publishing a transparent data policy will help this,
and is an important part of the process of carefully
considering what needs to be collected. Companies
are still required to supply the authorities in Shanghai
FTZ with a comparatively large amount of information,
and the nature of this information could be analysed to
ensure that all data collected has a clear use.
The new online ‘one-stop shop’ for company
formation is a very positive move as one application
saves time and money, compared to registering with
a range of different bureaus one after another. It is
also a positive step towards building a comprehensive
reporting platform and this same system can be
expanded for filing further necessary corporate
information throughout the life cycle of the business.
The expansion of this platform to other areas of
China will also be a major benefit to companies
operating across the country. Localised differences
in implementation in cities and provinces can be a
challenge to new market entrants, so a standardised
national platform, once tested in Shanghai FTZ, would
be extremely welcome.
Easier access to publicly available accounts and
company records will also be highly valuable, and the
Shanghai FTZ’s online platform could be extended to
allow more access to such information. Registration
records and financial statements prepared to
appropriate accepted accounting principles need
not divulge commercially sensitive material, but
would have a range of uses. In particular, gathering
information on potential business partners can be
a challenge, so easy access information will allow
more confidence and more informed decision making
for transactions. Once tested, the use of this same
platform to form a national database would make
working with counterparties simpler and quicker
throughout China.
The role of free trade zones is, at least in part, to help
experiment with liberalising the economy, streamlining
government regulation, promoting administrative
reform and providing a path for further economic
development. Formalising and defining the policy and
methodology for data collection and transparency is a
relatively straight-forward, low risk way of furthering
all these aims, and helping the economy to develop.
The measures already implemented in Shanghai are
an important step in the process of upgrading data
collection and utilisation, and we look forward to
seeing them implemented in other free trade zones as
well, and across the whole country, as soon as they are
fully tested.
2014 | Regulating a Free Trade Zone – Simplifying data collection and improving transparency
19. TheCityUK represents the UK-based financial and related professional services industry. We lobby on its behalf,
producing evidence of its importance to the wider national economy. At home in the UK, in the EU and
internationally, we seek to influence policy to drive competitiveness, creating jobs and lasting economic growth.
UK-based financial and related professional services contributed 12% of UK GDP in 2013. Over 2 million people
work in the industry across the country, two thirds of whom are outside London. Our industry employs 7% of
the population and the productivity of these jobs is 70% above the UK average. Foreign companies invested
around £100bn into UK financial companies since the start of 2007, more than in any other sector. The UK is
Europe’s financial centre and leads the way in international banking, fund management, international insurance,
private equity and derivatives trading. The UK also holds a leading position in the delivery of accounting services,
legal services and management consulting.
Financial and related professional services are the UK’s biggest exporting industries. We make a £55bn
contribution to the balance of trade, helping to offset the trade in goods deficit. TheCityUK creates market
access for its members through an extensive programme of work on trade and investment policy. To achieve
this, we work closely with governments and the European Commission to represent member views and help
deliver the best outcomes in international trade & investment negotiations. Allied to this, we have a country-focused
programme to build relationships and to help open markets where our members see significant
opportunities. We also have a strong focus on ways of influencing and delivering regulatory coherence through
dialogue with regulators, governments & industry bodies internationally.
The China-Britain Business Council (CBBC) is the leading organisation helping UK companies grow and
develop their business in China. We help UK companies of all sizes and sectors, whether new entrants or
established operations, access the full potential of the fastest growing market in the world. We offer practical
in-market assistance, services, industry initiatives and a membership programme delivering access, seminars
and networking.
Through 60 years of engagement, we have built up exceptional connections with government and business
across China. Our Board is made up of senior business people from companies with a strong China interest,
and our business advisers have extensive first-hand experience of doing business in China. We deliver our
services and advice through 10 UK offices and 13 offices across key locations in China. This in-country
network provides invaluable local insight, access, and knowledge. Find out more at www.cbbc.org