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【香港】Hong Kong Government Signs New Automatic Exchange of Information Agreements with South Africa and Portugal and Proposes Significant Further Expansion
The Hong Kong Government has recently signed agreements for the implementation of automatic exchange of financial account information (“AEOI”) with two more countries, bringing its number of AEOI partners to nine. In addition, the Hong Kong Government has recently introduced draft legislation that adds 72 jurisdictions (including Mainland China) to Hong Kong’s list of “reportable jurisdictions”. The draft legislation proposes that Hong Kong financial institutions (“HK FIs”) will be required to report to the Inland Revenue Department (“IRD”) by May 2018 the information collected from 1 July 2017 to 31 December 2017 in respect of accounts held by tax residents of these 72 jurisdictions. Reporting in subsequent years will cover the full calendar year. This information will be kept by the IRD and exchanged with the relevant jurisdiction after an AEOI agreement has been concluded with that jurisdiction. Therefore, when an AEOI agreement is entered into with one of the prospective AEOI partners, the relevant AEOI partner will receive information from the IRD dating back to 1 July 2017.
【香港】Proposed Concessionary Tax Regime for Aircraft Leasing in Hong Kong
The Government introduced in March this year tax concessions for the aircraft leasing industry to foster the proposed development of Hong Kong as an aircraft leasing centre.
At present, the current tax rules in Hong Kong are a major impediment to attracting aircraft lessors to set up in Hong Kong. Aircraft owners in Hong Kong are taxed on rental income for offshore leasing activities whilst deductions for aircraft depreciation are denied. The tax treaty network of Hong Kong is also relatively limited.
【中国】China Completes the Revamping of Its Transfer Pricing Regime
On 17 March 2017, the State Administration of Taxation (SAT) issued the Bulletin on the Administrative Measures for Special Tax Investigation and Adjustments and Mutual Agreement Procedures1 ("Bulletin 6"). Bulletin 6 is the third and final bulletin in a series through which the SAT has comprehensively revised the transfer pricing regime under the former Circular 2².
【香港】Proposed Profits Tax Exemption for Privately Offered Hong Kong Open-ended Fund Companies
The Financial Services and Treasury Bureau ("FSTB") has introduced proposals ("Proposals") to extend the profits tax exemption currently enjoyed by publicly offered funds and certain offshore funds, to onshore privately offered open-ended fund companies ("Subject OFCs").
【中国】New China Cybersecurity Guidelines for Registration of Networked Medical Devices
The China Food and Drug Administration ("CFDA") has issued guidelines aimed to implement China's new Cybersecurity Law ("CSL") in the administration of medical devices in China. This development is a clear signal that Chinese regulators intend to enhance cybersecurity protection in the healthcare sector.
【香港】Hong Kong Adding Six Partner Countries to Automatic Exchange of Information
On 16 March 2017, Hong Kong signed agreements with six jurisdictions,namely Belgium, Canada, Guernsey, Italy, Mexico and the Netherlands, for conducting automatic exchange of financial account information in tax matters (AEOI). Confirmation of the date on which Hong Kong will commence exchanging information with these six jurisdictions has yet to be released.
【香港】SFC Consults on Proposals to Facilitate Classification of Professional Investors: Good News for Financial Services Industry
Hong Kong's Securities and Futures Commission ("SFC") has published a Consultation Paper on proposed amendments to the Securities and Futures (Professional Investor) Rules ("PI Rules") ("Consultation"). The Consultation includes proposals to expand the categories of persons who may qualify as a professional investor, permit aggregation of certain assets and introduce alternative forms of evidence to satisfy the asset or portfolio thresholds under the PI Rules.
【香港】Hong Kong Government Considers Expanding Its List of "Reportable Jurisdictions" for Automatic Exchange of Information
Under increasing international pressure, the Hong Kong government is considering expanding its Automatic Exchange of Information ("AEOI") implementation by imposing broader information collection obligations, entering into more bilateral AEOI agreements at a faster pace, and possibly joining the multilateral AEOI agreement.
【中国】China’s New Two-Invoice System in Pharma Distribution Aims to Reduce Drug Prices and Compliance Risk
China has launched the “two-invoice” system in drug distribution on a trial basis, aiming to improve transparency in drug prices and eliminate excessive profit margins associated with multi-tier distribution models. This is the first time Chinese regulators have officially launched the two-invoice system, which had been debated for over a decade. The system is expected to be fully implemented in public hospitals across the country by the end of 2018.
【中国】International Commercial & Trade Newsletter
1. Customs new rules for supervision on outward processing
On 28 November 2016, the General Administration of Customs ("GAC") introduced new rules for regulating outward processing by issuing the GAC Announcement  No. 69 ("Announcement 69") which took effect on 30 November 2016.
【中国】China Climbs Four Places in Transparency International’s 2016 Corruption Perception Index
Transparency International has launched its latest 2016 Corruption Perception Index (“CPI”). China’s ranking continues to improve, moving up by four places from last year’s rank of 83 to a rank this year of 79. Our alert discusses some of the highlights of the 2016 CPI.
【中国】First Time PRC Court Recognizes a Foreign Judgment Based on Principle of Reciprocity
On 9 December 2016, the Nanjing Intermediate People’s Court (“Jiangsu Court”) handed down a decision recognizing and enforcing a civil judgment made by the Singapore High Court (“Nanjing IPC Decision”) based on the principle of reciprocity. This is a landmark development and is the first time that a Chinese court has recognized and enforced a Singapore commercial judgment.
More significantly, this is the first time that a Chinese court has recognized and enforced a foreign court judgment based on the principle of reciprocity in the absence of a bilateral treaty for mutual recognition and enforcement of judgments.
Our alert will discuss this development and its implications
【中国】New Restrictions on China Outbound Investments
China's foreign exchange reserves experienced a rapid, short-term drop during the second half of 2016. Several causes are suspected to have contributed to the drop, including people selling renminbi to avoid depreciation from the falling renminbi exchange rate and Chinese enterprises increasing their overseas M&A activities. The Chinese government is particularly concerned with the role played by irrational investment trends and other unusual conduct from Chinese enterprises going global in causing the drop.
【中国】Hong Kong’s Amended Winding-Up Legislation Enhances Protection for Creditors
The Secretary for Financial Services and the Treasury recently announced that the Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance (the “Amendment Ordinance”) will come into operation on 13 February 2017. The Amendment Ordinance introduces a more efficient administration of the winding-up process and streamlines the procedures in line with international developments. The new legislation also aims to further protect creditors against asset depletion of insolvent companies.
【香港】Retirement Schemes Regulatory Update January 2017
1. Update on automatic exchange of financial account information
Starting 1 January 2017, financial institutions in Hong Kong are required to comply with the recently enacted rules of automatic exchange of financial account information in tax matters (“AEOI”). The AEOI requirements include due diligence procedures to identify reportable account holders and controlling persons and report them to the IRD. On 13 January 2017, the Mandatory Provident Fund Schemes Authority (“MPFA”) published a letter that provided an update on the latest developments and highlighted the implications for Occupational Retirement Schemes Ordinance (“ORSO”)schemes.
【中国】Tax Developments in China
This paper summarizes the major tax developments in China during 2016.
Over the past year, multinational companies (MNCs) have experienced increasingly aggressive tax enforcement and collection from the Chinese tax authorities. According to the State Administration of Taxation (SAT), the Chinese tax authorities collected RMB58 billion in taxes from anti-avoidance investigations in 2015, representing an 11 percent increase over 2014. As illustrated in Sections 2 and 3 of this paper, the tax audits during the past year mainly focused on transfer pricing issues, outbound service fee or royalty payments, indirect share transfers, entitlement to treaty benefits and permanent establishments (PEs).
【中国】Court Confirms a Heightened Need for Disclosure in Disqualification Proceedings Against Directors
In Securities and Futures Commission v Wong Yuen Yee and others
(30/12/2016, HCMP241/2015), the Court of First Instance of the Hong Kong High Court ("CFI") ordered the Securities and Futures Commission ("SFC") to produce relevant documents obtained in its investigations to respondents of disqualification proceedings. In view of the SFC's extensive investigative powers, the CFI ruled that the SFC should disclose all materials available for potential use in trial, including documents which may undermine its case.
Our alert discusses this important development and its implications.
【シンガポール】Legal Advice Privilege: Risks for the Unwary
If a company's lawyers interview the company's employees as part of an internal investigation, can legal advice privilege protect the contents of the interview and any notes taken by the lawyers from later disclosure to a regulator or in subsequent court proceedings?
Following the recent decision of The RBS Rights Issue Litigation  EWHC 3161 (Ch) ("The RBS Rights Issue Litigation"), it appears that legal advice privilege may not protect such interviews under English law in most cases. This legal development will obviously be of concern to parties who are based or do business in the UK, but it could also impact Singapore companies, particularly in situations where they are subject to litigation in the English courts or regulatory investigations by UK authorities. The RBS Rights Issue Litigation could also affect the development of legal advice privilege under Singapore law.
【シンガポール】Data Privacy Enforcement Trends
Since the Personal Data Protection Act (the “Act”) came into force on 2 July 2014, the Personal Data Protection Commission (the “Commission”) has published a number of enforcement decisions taken against twenty two organisations for breaching various obligations under the Act. Enforcement actions have been taken against companies in a range of industries, including the food and beverage sector, insurance companies, societies and IT service providers. The Commission issued warnings and financial penalties ranging from S$500 to S$50,000, the highest of which was imposed on a karaoke chain for failing to implement sufficient security measures to protect the personal data of 317,000 members. This newsletter highlights key enforcement decisions of the Commission in 2016.
【香港】First Market Misconduct Tribunal Decision Against Listed Company and Its Officers for Breaches of Disclosure Obligations
On 29 November 2016, the Market Misconduct Tribunal (“MMT”) issued a report finding that AcrossAsia Limited (“AAL”), its former Chairman and Independent Non-Executive Director (“Cheok”), and its Chief Executive Officer and Executive Director (“Ang”) breached the disclosure obligations under the Securities and Futures Ordinance (the “SFO”) by failing to disclose inside information as soon as reasonably practicable.
This is the first concluded MMT case dealing with breaches of the disclosure obligations since it came into force on 1 January 2013. This alert discusses the implications of the MMT decision and suggests practical tips to listed companies and their officers for managing their disclosure obligations.