Insights

In this article, we explain how taxpayers could leverage on Advance Pricing Agreements (“APAs”) to guard against the uncertainties of tax compliance in an era of increasingly complex tax rules.

In an ever-increasing integrated global economy, businesses have been establishing their footprints in various locations across the continents. These so-called “multi-national corporations” or “MNCs” have sophisticated supply chains and business platforms comprising of dozens, if not, hundreds of entities, all of which are directly or indirectly related to one another. Under this corporate umbrella, the affiliates would trade and transact with one another.

In July 2018, the trade war between the United States and China went live. The war of words which saw threats, posturing, and “nudges” to impose tariffs on goods traded between the United States and China became a reality.

The Chinese authorities have released proposed changes to tax law that may significantly impact how international assignees and long-term expats in the People’s Republic of China (PRC) are taxed. From changes to residency, personal taxation, payroll withholding and tax efficient benefits for assignees, the potential changes are far reaching.

Since its inception, the digital realm has been an economic “wild west.” Laws and regulations written in the “brick and mortar” world often do not apply or are, for all practical purposes, unenforceable in the digital counterpart.

Indirect taxation is still evolving, and an arguable simple tax is growing in its complexity and application as a traditional goods and services model is replaced with digital content; virtual consumption and seamless international trade flows. But how can you stay ahead?

The lack of international consensus on taxing the digital economy is creating a vacuum of uncertainty. So, what’s coming up on the horizon and how can your business deal with the implications?

Global businesses today use a wide variety of tools in their communications strategy to stay connected – intranets, emails, mobile phones, Skype, texts and instant messaging among them. Revolutionary as they may be for transforming how business is conducted globally, they still provide no substitute for sending a trusted, capable employee on an overseas assignment to solve a problem or lead an initiative in person.

Thailand may soon join several countries in taxing digital services and products that are provided by foreign e-commerce operators. In July 2018, the Thai Cabinet approved of a draft law that, if enacted, will see Thailand imposing value added tax (“VAT”) on foreign operators that provide services and content through the internet or electronic media to Thai consumers.

For many businesses, international expansion and growth brings new opportunities across new markets. However, managing an internationally mobile workforce can pose significant challenges in effectively tracking where employees are working. In turn, these challenges complicate the tax and reporting obligations that arise across a diverse employee population working across borders.

In the final part of this article, we continue our examination of how customs rules for free trade agreements (“FTAs”) should be modernised to meet the needs of a digital economy.

The growth of the digital economy has broken down traditional commercial and geographical boundaries. Goods and services are being delivered and consumed across borders in ways that were unforeseen and at a pace that was unprecedented just decades ago.

Much has been made of the Thai government’s commitment to developing a modern industrial base. In large part, the praise from the business community has been deserved. Concerted efforts include a range of initiatives, from a detailed program of BOI incentives, to the fast-tracking of business permits across industries, to the ambitious upgrades in infrastructure and government support that are making the Eastern Economic Corridor a highly promising region for manufacturing.

International taxation is undergoing the biggest shake-up for a generation and the chief driver of this change is the global roll-out of the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan.

China’s One Belt, One Road outbound investment strategy presents a wealth of opportunity along major global land and maritime trade routes. But how can business owners outside China take advantage?

The government’s recent high-profile solicitation of China’s leading e-commerce operator, Alibaba, to collaborate in developing the nation’s digital economy made front page news. Equally newsworthy were the government’s current attempts to revise existing tax laws to ensure that digital transactions are subject to VAT, and that capital gains from disposal of digital assets are subject to withholding tax.