Ernst & Young: BEPS project implementation will affect multinational investment patterns

Updated: October 19, 2015  Views: 30

Recently, for the State Administration of Taxation [microblogging] published OECD / G20 tax base erosion and profit transfer project (referred BEPS2015年最终报告中文版, partner at Ernst & Young Tax Services noted that the anti-avoidance project ground will affect multinationals investment process investment choices, according to the anti-avoidance project related initiatives in multinational companies in tax planning, BVI, Cayman Islands and other tax havens as a traditional charm will diminish, Singapore, United Kingdom, Hong Kong, China, as a new 'low-tax Attractive harbor 'will increase.

In accordance with past practice, a number of multinational companies will be registered in the country BVI, the Cayman Islands and other low tax rates, in order to reduce tax expenditures, while 15 of the proposed action plan BEPS profit to hook with the actual business activities, therefore BVI Cayman Islands shell company will be subject to numerous constraints. For Chinese enterprises, and their actual business association, and the tax rate is relatively low in Singapore, the UK, Hong Kong and other Chinese places are better to invest it.

Ernst & Young Tax Services partner Mai Hao voice suggested that multinational companies should give more consideration to tax planning means of compliance. Use of national tax incentives is one of the means, such as doing research and development in China, as a high-tech enterprise, you can enjoy low tax rate (15% reduced rate of corporate income tax levy. In addition, multinational companies need to adjust the holding structure, management structure, pay attention to some institutions originally belonging ancillary activities will in future be regarded as a permanent establishment are taxed in.

Ernst & Young Tax Services partner Li Yan are reminded domestic enterprises to invest in setting up a company in a foreign country, do not think investment losses in foreign countries do not tax planning because the country can be very profitable company, the money in foreign losses can not be offset by domestic tax, actually pulled down the company's profitability. In addition, if four or five years of consecutive losses in foreign words, foreign tax authorities will close the company's attention and examination, prone to operational problems.

Li Yan pointed out that although BEPS action plan have been disclosed, but the project still needs to implement fully the floor and a longer period of time. Get Top News, Latest News and Current News from Latest Current News: U.S., China, World, Entertainment, Health, Finance, Business, echnology, Travel, Politics, Sports.