Before you is the Summer 2023 edition of the Asia Tax Bulletin with a diverse range of tax matters that have changed.
Family offices: Hong Kong passed the new tax incentive rules for qualifying family offices, which will give Singapore a run for its money to stay competitive.
Share issuance: India’s parliament passed the government’s proposed tax changes announced in February, but made a few changes. India also introduced new law which makes the issuance of shares above their real value taxable.
Benefits in-kind: Indonesia issued the new tax circular dealing with the taxation of benefits in-kind, which marks a change with the previous treatment, where they used to be non-taxable. It is still possible for certain types of benefits to be tax exempt but that will depend on their nature and the amount involved.
Transfer pricing: Malaysia replaced its previous transfer pricing rules by a new set of rules which also address the process and possibility of obtaining an APA (Advance Pricing Agreement) including a bilateral or multilateral pricing agreement.
Tax gains from sale of foreign assets: Interestingly, like Hong Kong, Singapore proposes, in response to a request from the European Union to amend its taxation rules for offshore gains of companies which are part of an international group with effect from 1 January 2024. The current safe harbour exemption in the income tax law will not apply to such situations anymore and care must be given that either the Singapore company who made the gain can treat the gain as not brought into Singapore (not remitted to Singapore nor deemed remitted) or that the company has sufficient economic substance. We will expect more news about this in the course of the year and similarly, Hong Kong will be announcing details about its tax changes on this subject in the coming months.