Chinese whose homes are to be demolished for redevelopment should be paid with market prices and can sue over disputes before any demolition, according to a draft regulation. Compensations should be offered to owners before expropriation of their houses built on state-owned land. The existing demolition regulation took effect in 2001, granting the forced demolition. The draft regulation used "expropriation" instead of "demolition" in its title. According to the draft regulation, no violence, coercion, or other illegal means, should be employed in the demolition procedures. (Source: Xinhua)

China issued new regulations telling banks to set lending quotas after "prudent calculation" of borrowers' "actual demand". The new rules also ask lenders to give funds directly to the end user declared by the borrower. Researchers said that large amounts of the borrowed funds went into property and stock market speculation, further pushing up soaring house prices and further inflating asset bubbles. According to official data, some regions reported two to three percent of funds were misappropriated. The government is aiming to restrict credit supply to 7.5 trillion yuan in 2010. (Source: Xinhua)

Australia's draft legislation aimed at boosting the tax integrity of trusts could provide a $150 million boost to revenue. The proposed changes extend tax file number withholding arrangements to closely held trusts, including family trusts. Trustee beneficiaries where the parent trust is subject to the trustee beneficiary reporting rules will be excluded from the measure. The quarterly requirements for trustees to report and remit amounts withheld will be removed, and will be replaced with a simpler annual reporting and remittance. (Source: Money Management)

Patents filed by Chinese companies rose 29.7% last year as the global economic crisis saw total international patent filings fall by 4.5%, according to WIPO. China was the source of 7,946 international applications, trailing only the US, Japan, Germany and South Korea. Chinese telecom equipment producer Huawei, which was the leading patent applicant among companies in 2008, had to settle for second place in 2009 with 1,847 filings to Panasonic's 1,891. (Source: China Economic Review)

A recent decision of the Tax Court of Canada in the Garron case should put taxpayers with offshore trusts on high alert. A Canadian resident trust is taxable on its worldwide income, regardless where it earns the income. The new rule is that a trust with multiple trustees resides where a majority of the trustees reside if the trust instrument permits majority decisions on all matters within the discretion of the trustees and the trustees actually discharge their fiduciary duties. Small details can trip up even the most sophisticated plans when courts move the goal posts. (Source: Ottawa Citizen)

Investment funds across the EU can expect refunds of millions of euros from taxes levied on dividends following a ruling in Norway. The Norwegian government decided to refund withholding taxes to a Luxembourg SICAV. The ruling led the way for other cases where withholding tax on dividends has been levied. Other European countries including France, Germany, Italy, Spain and Belgium apply withholding tax on dividends paid to funds, while exempting their domestic funds from such taxes. (Source: International Investment)

Nina Wang, the chairwoman of chemical company Chinachem, died in 2007, leaving behind a fortune estimated by Forbes to be $4.2 billion. Within days of her death, Tony Chan, a practitioner of feng shui, claimed Wang had left him everything in a 2006 will, contradicting a 2002 will in which Wang had left everything to a charitable foundation. In the decision, the Judge said he did not "believe that their relationship was such that she was prepared to give him her entire estate irrespective of her other commitments and responsibilities." The Judge also expressed skepticism about Wang, putting a neophyte like Chan in charge of her business empire. (Source: Law.com)

Parents are increasingly using equity-release plans to help their children get on the property ladder and ease a potential inheritance tax (IHT) burden. Equity-release plans enable asset rich, but cash poor, borrowers aged 55 and over to unlock cash from a family home without having to sell up and move out. By using equity release to unlock cash but take on new mortgage debt, the value of a property for IHT purposes is also reduced, which can be a useful, and legal, way to avoid tax. The maximum equity that can be released from a property is 45 per cent. (Source: Financial Times)

For employees chargeable to tax and intending to leave Hong Kong for more than a month, the Inland Revenue Department (IRD) requires at least 1 month notification before departure to settle all tax liabilities. This applies to cases when a taxpayer intends to migrate to another country or to study or work overseas. The employer must also need to temporarily withhold payments of salaries to the employee until the IRD issues a letter of release. The requirement does not apply to employees who travel frequently for work and will just need to file returns and pay taxes annually. (Source: China Briefing)

The New Zealand Inland Revenue goes to the Court of Appeal in a bid to overturn the landmark "Penny & Hooper" tax case. The case, against two surgeons, was brought because the IRD alleged the two were paying themselves less than the going rate for their professional services, through a company and trust structure. How the case is determined will affect all providers of high-cost professional services who operate through company and trust structures. However, if the IRD loses the case it appears likely the government will legislative to change the rules. (Source: The National Business Review)

Israel Tax Authority plans to initiate a one-time measure allowing people to bring money into Israel without fear of criminal proceedings. However, while those bringing money into Israel will be free from criminal prosecution, the amount of tax paid will not be reduced although the Tax Authority will not impose fines or interest. (Source: Globes [online])

Ireland intends to use the Finance Bill to close a loophole that allows multinationals to maximise the profits they make from the low corporate tax rate. The Bill will include measures designed to regulate transfer pricing, a practice regularly used by multinationals to exploit the benefits of countries with low corporate taxes. Ireland does not tax the practice, which means it is out of line with key trade partners in the US and Europe, who fear that multinationals could use operations here to siphon revenue away from those jurisdictions. (Source: The Irish Times)

Qatar amends provisions in Law No. 13 of 2000, which determines limits to foreign investors' shareholdings in certain business activities. Under the new provisions, foreign investors will be able to be majority shareholders in many business activities that were previously exclusive to Qatari enterprises. Currently foreign investment is limited to 49% of capital for most activities in the state; however, upon special government approval, up to 100% ownership by non-Qatari investors may be allowed in certain sectors. (Source: Tax-News.com)

Malta signed a MoU with China, placing Malta's funds industry at the same level with the major fund domiciles particularly in the European Union. It will most importantly facilitate business for financial institutions doing business between the two countries. Chinese QDII will be able to invest on behalf of Chinese investors into Malta domiciled investment funds. Companies licensed by MFSA will also be able to access the Chinese QFII status and invest directly in China. (Source: LawAndTax-News.com)

Chinese regulators have imposed a partial ban on listed companies raising capital from equity markets to repay bank loans or replenish working capital. At least 34 companies, mostly in the industrial and real estate sectors, have cancelled or reduced plans to raise money through private placements or secondary offerings. The regulator has also moved to limit IPOs by real estate developers and some industrial companies. The flood of liquidity has led to fears of overheating in the Chinese economy and official warnings over the creation of asset bubbles and the risk of inflation. (Source: Financial Times)

Determined to bring a swift end to the era of banking secrecy, the EU has adopted a non-binding resolution. According to the text, the EU will endeavour to actively encourage improvements to the existing OECD standards. It highlights the fact that the ultimate aim is to make the automatic and multilateral exchange of information a global standard. The EU Parliament criticized the fact that "only" twelve agreements were necessary in order to remove countries from the OECD's infamous "grey list". (Source: Tax-News.com)

Philanthropy has become a new battleground for private banks as they line up to offer rich clients the slickest methods to mimic the charitable giving of the likes of Bill Gates and George Soros. UK donors wishing to emulate these examples can benefit from more than a sense of pride in their own altruism. If a rich benefactor makes a donation, they can take out a life insurance policy to cover the cost of the gift written in trust for their children so that when they die, the gift will not have eroded the value of their estate to their offspring. (Source: Reuters)

A new report from OECD says China has made progress in reducing the gap between rich and poor. On the Gini inequality index, China ranked 40.8 in 2007, down from 41 in 2005. The OECD pointed to increased welfare spending and major adjustments to the labor market for reducing disparities. Average urban incomes are approximately twice those in rural areas. Inequality levels in China remain higher than most developed countries, but are lower than South Africa, Brazil, Chile, Russia and Mexico. (Source: China Economic Review)

San Marino has approved legislation that relaxes strict bank secrecy. The new legislation reflects San Marino's commitment to the OECD standard of transparency and information exchange, having recently been promoted to the "white list" of the OECD. Under the new legislation, accusations of illegality, such as fraud or tax evasion will forfeit the anonymity of account holders and details of account holders may be given, on request, to a list of institutions which include magistrates, the central bank and the tax office. (Source: Offshore Investment)

China has released a new order on the registration of foreign-invested partnership enterprises effective March 1, 2010. It covers rules on registration of foreign-invested partnership enterprises, modifying and canceling registration, establishment of branches, plus details on annual inspections and administration of professional certification. The term "foreign-invested enterprise" shall refer to companies with a foreign investment partner and a Chinese citizen or organization. (Source: China Briefing)

【Chief Editors: Cynthia & Lillian 】

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