案例分析题TAX RATES AND ALLOWANCES The following tax rates and allowances are to be used in answering the questions. Enterprise income tax Deduction limits on certain expenses Individual income tax Entrepreneurs who receive production or operation income derived from private industrial or commercial enterprises Monthly personal allowance for a China local RMB 3,500 Additional allowance for expatriate employees RMB 1,300 Individual service income​​​​​​​ Allowance each time for individual service income, income from manuscripts, royalties and rental of property​​​​​​​ RMB 4,000 and below RMB 800 Over RMB 4,000 20% Income from:​​​​​​​ Manuscripts, royalties, interest, dividends, rental of property, transfer of property， incidental income and other income 20% Donations of individuals​​​​​​​ Limited to: 30% of the taxable income; or 100% if the donation is made to certain funds approved by the government VAT pilot programme for transportation and modern services Note: The above rates are based on the pilot rules effective from 1 August 2013. The new rules effective from 1 January 2014 are not examinable in the 2014 exams.​​​​​​​ Exchange rate ​​​​​​​USD1 = RMB

案例分析题(b) With respect to the three turnover taxes in China, namely, value added tax (VAT), business tax (BT) and consumption tax (CT):

案例分析题(a) Chops Ltd produces one-off wooden chopsticks

案例分析题TAX RATES AND ALLOWANCES The following tax rates and allowances are to be used in answering the questions. Enterprise income tax Rate Income tax for resident (domestic) and non-resident (foreign) enterprises 25% Individual income tax Entrepreneurs who receive production or operation income derived from private industrial or commercial enterprises Monthly personal allowance for a China local is RMB 3,500. Note: VAT reforms in certain cities in China need not be considered. Exchange rate USD1 = RMB 7

案例分析题(b)Manu Ltd

案例分析题(a) Mr Wang operates a sole proprietorship

案例分析题(a) Prop Ltd is a property developer

案例分析题(a) GH Ltd is a construction company set up in Shanghai and pays enterprise income tax (EIT) at 25%. XY Ltd is its holding company and is based in the Cayman Islands. The average amount of net equity of GH Ltd was RMB4,000,000 in 2017. The manager of GH Ltd proposes that XY Ltd provides a loan of RMB10,000,000 to GH Ltd, on which GH Ltd pays interest to XY Ltd at a rate of 20% per annum (inclusive of all China taxes). Hence, the interest will reduce the taxable profit of GH Ltd. Required: (i) Calculate the value added tax (VAT) and enterprise income tax (EIT) (withholding tax) on the annual interest income payable to XY Ltd. Note: You should ignore surtaxes on VAT. (ii) Calculate the interest deductible by GH Ltd in 2017 according to the thin capitalisation rules if the market interest rate is 7% per annum. (b) Lont Pte Ltd is a Singapore company which carried out the following transactions in 2017: (1) Sold goods to its Chinese customers for RMB5,500,000 and earned a profit of RMB520,000. (2) Received a royalty from a Chinese company, Tstar Ltd, of RMB700,000. (3) Sold shares held in a Beijing company for RMB8,000,000 and made a gain of RMB4,800,000. (4) Received a fee of RMB260,000 (tax inclusive) on the provision of services in China. Lont Pte Ltd has created a permanent establishment in China for the provision of these services. The China tax authorities assessed a deemed profit rate of 30% on the service fee. (5) Leased an aircraft, without a crew, to an airlines company in China at a rent of RMB3,300,000. The depreciation of the aircraft amounts to RMB2,700,000. Note: Each of the above items is an isolated transaction. Required: Calculate the enterprise income tax (EIT) for each of the above items of income (1) to (5) received by Lont Pte Ltd in 2017. Indicate by the use of a zero (0) any item which is not subject to EIT. Note: You should ignore value added tax (VAT) and ignore tax treaty reduction.

案例分析题(a) In January 2013, BVI Co-XX

案例分析题TAX RATES AND ALLOWANCES The following tax rates and allowances are to be used in answering the questions. Enterprise income tax Deduction limits on certain expenses Individual income tax Entrepreneurs who receive production or operations income derived from private industrial or commercial operations Allowance per annum RMB42,000 Monthly personal allowance for a China local RMB3,500 Additional allowance for expatriate employees RMB1,300 Allowance each time for individual service income, income from manuscripts, royalties and rental of property RMB4,000 and below RMB800 Over RMB4,000 20% Income from: Manuscripts, royalties, interest, dividends, rental of property, transfer of property, incidental income and other income 20% Donations of individuals Limited to: 30% of the taxable income; or 100% if the donation is made to certain funds approved by the government VAT pilot programme​​​​​​​ Note: The above rates are based on the pilot rules published by 30 September 2015. The new rules issued from 1 October 2015 onwards are not examinable in the 2016 exams.​​​​​​​ Exchange rate USD1 = RMB6​​​​​​​

案例分析题Mr Lin, a China tax resident

案例分析题Mable is a serial entrepreneur

案例分析题TAX RATES AND ALLOWANCES The following tax rates and allowances are to be used in answering the questions. Enterprise income tax Individual income tax Entrepreneurs who receive production or operation income derived from private industrial or commercial enterprises​​​​​​​ Monthly personal allowance for a China local RMB 3,500 Additional allowance for expatriate employees RMB 1,300​​​​​​​ Allowance each time for individual service income, income from manuscripts, royalties and rental of property: Note: VAT reforms in China since 1 August 2013 need not be considered.​​​​​​​ Exchange rate USD1 = RMB

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