End of Batch J Posts

Shanghai-Hong Kong Stock Connect-Security regulation and its effectiveness

By Yu Shun Yin Elsie

Through Shanghai-Hong Kong Stock Connect, both issuers and investors are subjected to the listing rules and regulations of the market in which they are listed i.e. A-shares will be listed according to the Shanghai Stock Exchange (SSE) trading rules, while H-shares will be listed according to the Hong Kong Stock Exchange (HKSE) trading rules. Investors trading on the SSE (northbound) will follow the China local market and clearing rules and vice versa for southbound transactions.

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Transfer pricing – is tax reform necessary to tackle the problem?

By Li Ka Wing Karen

Background:

The 2012 G20 leaders’ summit in Mexico which was held in June, leaders explicitly referred to ‘the need to prevent base erosion and profit shifting’ in its final declaration. US President Obama also raised similar concerns in 2012 in the President’s Framework for Business Tax Reform, he said ‘Empirical evidence suggest that income shifting behavior multinational corporations is a significant concern that should be addressed by tax reform.’

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Billing scheme: a common criminal use of Shell Company

By Leung Kwan Yat

Shell company is ideal for concealing beneficiary owners’ identity and interests involved. Some people, however, may misuse Shell companies to organize various fraudulent business activities. One of such activities, billing scheme, is the blog’s focus.

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Is it a false notion when corporate social responsibility is required by law?

By Lam Chung Him

The Hong Kong government has been actively promoting the concept of Corporate Social Responsibility (CSR) by introducing the guidelines and organizing workshops to corporations, small and medium enterprises (SMEs), urging large corporations and SMEs to get started in implementing CSR. There is also a foreseeable future that government will follow the international trend to include CSR in HK Company Law.

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Tax Ambiguity of Court-less Amalgamation in the New Companies Ordinance

By Chu Yik Ting

Background

 

Hong Kong’s New Companies Ordinance (Cap. 622) came into effect in March this year, one of the measures designed to facilitate business restructuring is the new concept of court-free amalgamation for wholly-owned companies (Section 685(3)). The procedure of court-less amalgamation is simpler and less reliant on the court, hence it is expected that intra-group mergers can be carried out in a cost and time efficient manner, as compared to the traditional court-sanctioned procedure. However, there are several drawbacks due to the uncertain tax consequences of amalgamation that is yet to be clarified by the Inland Revenue Department (IRD).

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Possible limitations on ‘Earnings Stripping’ in the U.S. to further combat Corporate Inversions

By Choi Hei Tung

Background

 

After the previous round of new tax rules imposition in the U.S. which targeted at combating corporate inversions in the late September, the Treasury Department has been collecting opinions in closing the possible tax-avoidance loopholes created by ‘earnings stripping’.

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