The winter months have seen a range of significant measures in tax legislation, from tax incentives for foreign investment and various measures to promote the technology sector to building on earlier measures to increase tax collections. China reformed its individual income tax law and has extended, with adjustments, its policy on retail imports through e-commerce.
Hong Kong has gazetted proposals to enable private equity funds to be established in Hong Kong, in order to close in on Singapore’s regulations in this regard. Indonesia amended, for the second time in the space of two years, its anti-treaty shopping rules, tightening them compared with the previous edition. Japan has announced the framework of its 2019 tax reform plan, which includes changes to its CFC rules, transfer pricing and earnings stripping rules. Korea has seen the passage of the tax reform bill covered in the previous issue of this Bulletin, albeit with some amendments to the proposed changes. It also saw an interesting supreme court case dealing with beneficial ownership which was favourable for the taxpayer. Malaysia has seen a raft of tax changes as part of its Budget 2019, as well as rulings from the IRBM on income from and taxation of real estate. Singapore has approved the passage of its Variable Capital Companies Bill, designed to make Singapore a suitable alternative to the Cayman Islands as the preferred choice of jurisdiction for fund vehicles. Thailand has reformed its International Business Centre tax regime, replacing three prior tax incentive regimes, and has implemented changes to the taxation of technology transfers. Vietnam has issued a decree on social insurance for foreign employees in Vietnam.