China's 14th Five-Year Plan emphasises the need to create new advantages in the digital economy: upgrading traditional industries, spawning new sectors and ways of operating, and strengthening economic development.
At the same time, the tax environment is changing – in Mainland China and globally – and companies will need to understand and be prepared for the new tax landscape.
Mainland China and Hong Kong are both members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), which is working towards global agreement on reform of the international taxation system relating to the digitalization of the economy.
On 8 October, the "Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy" was published by the Inclusive Framework on BEPS. According to this statement, under Pillar 1, the profits of certain multinational enterprises will be re-allocated to market jurisdictions, and under Pillar 2, the minimum tax rates for the GloBE rules and the Subject to Tax Rule are 15% and 9% respectively.
At this seminar, speakers will explore the issues including:
- Highlights of the digital economy in the 14th Five-Year Plan
- Latest developments in the two-pillar framework
- Approaches that companies carrying on business in Mainland China and Hong Kong can take to handle the changes to the tax environment
- Response of the Hong Kong Government