Asia Pacific Holding Company Analysis 2018 - ICLC

 
Asia Pacific Holding Company Analysis 2018 - ICLC
Asia Pacific Holding
Company Analysis
2018
Dear Nexia member,

Following the success of the 2017 Asia Pacific Holding Company Analysis, we are pleased to present the Asia Pacific Holding Company Analysis, as at August, 2018.

We gratefully acknowledge the contributions made by the following Nexia members (in alphabetical order per country):

   Australia: Nexia Sydney (SRogers@nexiasydney.com.au)                                     Myanmar: Nexia TS Pte. Ltd. (edwinleow@nexiats.com.sg)
   Cambodia: Nexia TS Pte. Ltd. (edwinleow@nexiats.com.sg)                                  Nepal: BRS Neupane & Co. (anup@brs.com.np)
   China: Nexia TS Shanghai Co., Ltd (scott@nexiats.com.cn)                                 New Zealand: Nexia New Zealand (rcullen@nexiachch.co.nz,
   Hong Kong: Nexia Charles Mar Fan & Co. (brenda@charles-marfan.com)                        mmedlicott@nexiachch.co.nz)
   India: SKP Group (maulik.doshi@skparekh.com)                                             Philippines: Maceda Valencia & Co (ftagao@mvco.com.ph)
   Indonesia: KAP Kanaka Puradiredja Suhartono (rochmat@kanaka.co.id)                       Singapore: Nexia TS Pte. Ltd. (edwinleow@nexiats.com.sg)
   Japan: Gyosei & Co (m-muramatsu@gyosei-grp.or.jp)                                        Taiwan: Trans-Asia & Co., CPAs (service@tacpa.com.tw)
   Korea: Nexia Samduk (vitalset@hotmail.com)                                               Thailand: Thai Advisory Office Co. Ltd (khanitk@thaiadvisory.com)
   Malaysia: Nexia SSY (jasonsia@nexiassy.com)                                              Vietnam: NEXIA STT (phi.le@nexia.vn)

Every effort has been taken to ensure that the information provided in this Asia Pacific Holding Company Analysis is up to date. In order to expand the reach of the
analysis in the said edition, we have invited and followed up with various other countries from AP Region whose updates were not there in previous edition. Now, we
have updated version of AP Holding Company Analysis from Philippines, Taiwan and Nepal.

Please note, this analysis is meant as a practical tool for an initial comparison of relevant tax aspects of some holding company regimes. It should not be used as a
substitute for obtaining professional tax advice.

Neither the authors, Chaturvedi & Shah nor Nexia International can accept any responsibility for any loss sustained by any person relying on the information
provided and failing to seek appropriate tax advice.

28 August 2018

Krupal Kanakia
Partner – Taxation, Chaturvedi & Shah, Chartered Accountants, India

© Nexia International 2018                                                                                Asia Pacific Holding Company Analysis - 2018 | 1
Country (notes code)                         Singapore (SG)        Myanmar (MM)          Cambodia(KH)          Malaysia (MY)        Thailand (TH)        Taiwan (TW)
  Relevant criteria / Date last update                2018                 2018                  2018                 2018                 2018                   2018

  1 Treatment of Dividend Income

  How is Dividend Income treated for tax      (a) Local-sourced      Myanmar operates     (a) Local-sourced     Foreign-sourced     Foreign-sourced      (a) Local-sourced
  purposes – in particular, is the dividend       dividend is not    a one-tier               dividend is not   dividend income     dividend income          dividend is
  income either                                   taxable.           corporate tax            taxable1.         received in         received in              taxable at 21%
                                                                     system, under            Foreign-          Malaysia is not     Thailand is not          tax rate
  (a) exempt from tax under a                                        which dividends          sourced           taxable.            taxable under
  “participation exemption” or                                       received from a          dividend                              certain
                                                                     Company or other         income                                circumstances1
                                                                     association of           received in
                                                                     persons are exempt       Cambodia is
  (b) taxable with credit for foreign tax     (b) Foreign-sourced    from income tax in       subject to tax                                             (b) Foreign-
  credits                                         dividend income    the hands of             on profit.                                                     sourced
                                                  received in        shareholders.            Foreign tax                                                    dividend
                                                  Singapore is not                            credit is                                                      income
                                                  taxable under                               allowed for                                                    received is
                                                  certain                                     deduction from                                                 subject to tax
                                                  circumstances 1                             the tax on                                                     on profit.
                                                                                              profit.                                                        Foreign tax
                                                                                                                                                             credit is
                                                                                                                                                             allowed for
                                                                                                                                                             deduction from
                                                                                                                                                             the tax on
                                                                                                                                                             profits.

  2 Minimum Participation for Dividend
    income

  Minimum participation holding level (%)              N/A                  N/A                  N/A                   N/A                 25%                    N/A
  required to be satisfied

© Nexia International 2018                                                                                         Asia Pacific Holding Company Analysis 2018 |    2
Country (notes code)                        Singapore (SG)         Myanmar (MM)            Cambodia(KH)           Malaysia (MY)          Thailand (TH)       Taiwan (TW)
  Relevant criteria / Date last update               2018                  2018                    2018                   2018                  2018                 2018

  3 Treatment of Capital Gains Income         Gains derived         Capital gains are       There is no            Capital Gains from     Gains derived      (a) The capital
                                              from disposal of      taxable at 10% for      separate capital       disposal of share is   from disposal of   gain results from
  How is Capital Gains Income treated for     ordinary shares       both resident and       gains tax. Any gain    not subject to tax     shares shall be    investing in local
  tax purposes – in particular, is the        made during the       non-resident tax        on the sale of fixed   except gains from      subject to         currency is tax
  capital gain either                         period 1 June         payers. Capital         assets/shares is       disposal of            corporate income   exempt.
                                              2012 to 31 May        gains for tax           subject to the tax     property or shares     tax in Thailand.
    (a) exempt from tax under a               2022 are not          payers in certain       on profits at a rate   in real property
       “participation exemption” or           taxable if the        specifi industries      of 20% on the          companies will be
                                              company has held      may be subject to       higher of the          subject to Real
    (b) taxable with credit for foreign tax   at least 20% of the   capital gains tax at    contract price or      Property Gains                            (b) Foreign tax
       credits                                ordinary shares       higher rates. No        the market value.      Tax (“RPGT”)                              credit may be
                                              for at least 24       capital gains tax       The proceeds also      based on specific                         claimed if
                                              months                will be levied if the   are subject to         rates and tenure                          supporting
                                              continuously just     total value of the      alternative            of property                               documents are
                                              prior to the          sale, exchange or       minimum tax of         ownership.                                available
                                              disposal. All other   transfer of capital     1% of total
                                              gains are to be       assets within a         turnover.
                                              subjected to          year does not
                                              determination of      exceed 10 million       Foreign tax credit
                                              whether such          MMK.                    may be claimed if
                                              gains are of a                                supporting
                                              capital or income     Where foreign           documents are
                                              nature. Gains         taxes are suffered,     available
                                              determined to be      foreign tax credits
                                              of an income          may be available
                                              nature are            under a tax treaty.
                                              taxable.Where
                                              foreign taxes are
                                              suffered, foreign
                                              tax credits may be
                                              available under a
                                              tax treaty.

© Nexia International 2018                                                                                            Asia Pacific Holding Company Analysis 2018 |    3
Country (notes code)                       Singapore (SG)        Myanmar (MM)   Cambodia(KH)    Malaysia (MY)        Thailand (TH)       Taiwan (TW)
  Relevant criteria / Date last update              2018               2018           2018             2018                 2018                  2018

  4 Minimum Participation for Capital
  Gains
                                                    N/A                N/A             N/A             N/A                  N/A                   N/A
  Minimum participation holding level (%)
  required to be satisfied

  5 Minimum “ownership” period
  requirements

  What are the minimum “ownership”           For certainty of          N/A            N/A        (a) N/A             (a) Refer to item 1          N/A
  period                                     non-taxation of                                                             above
                                             capital gains to be
  Requirements in respect of:                applicable, the
                                             minimum 20%
    (a) Dividend income                      ordinary
                                             shareholdings
    (b) Capital gains derived from the       must beheld for at                                  (b) Refer to Note          N/A                   N/A
        participating holding?               least 24 months                                         MY1 for RPGT
                                             continuously just                                       rates.
                                             prior to the
                                             disposal.

  6 “Active Business” Test on
  underlying participation

  Does the underlying subsidiary require            N/A                N/A            N/A               No                   No                   N/A
  to be an active operating company or
  can the subsidiary be, itself, a passive
  holding company?

© Nexia International 2018                                                                         Asia Pacific Holding Company Analysis 2018 |    4
Country (notes code)                         Singapore (SG)   Myanmar (MM)   Cambodia(KH)    Malaysia (MY)       Thailand (TH)        Taiwan (TW)
  Relevant criteria / Date last update             2018             2018           2018             2018                2018
  7 “Subject to tax” Test on underlying
    participation

  Does the subsidiary require to be
  subject to taxation in its jurisdiction of
  registration?                                     N/A             N/A            N/A              No                   Yes                   N/A

  If so, what is the minimum acceptable
  level of taxation (% rate) in the
  jurisdiction of the holding company for
  the purposes of this test?
  8 Corporate Rate of Taxation

                                                   17% 2            25%            20%2       Year of
  Corporate tax rate in jurisdiction                                                          Assessment                20%           20% since 2018
                                                                                              (“YA”) 2009 to                          (before 2017 is
                                                                                              2015 – 25%2                             17%)
                                                                                              YA 2016 and
                                                                                              onwards – 24%2

  9 Withholding Tax - Dividend
  (Outgoing)
                                                    NIL             NIL            14%           (a) Nil                10%                    21%
  (a) Non-Treaty rate on Dividends
                                                    N/A             N/A            10%           (b) N/A                10%               5% - 15%
  (b) Treaty – range of withholding taxes

  10 Withholding Tax - Dividends
  (Incoming)
                                                  0% -15%         0% -10%        0% -10%        Tax Exempt           10% - 20%        No withholding
  General range of withholding taxes on                                                                                               tax
  dividends in the foreign source
  jurisdiction in terms of treaty network.

© Nexia International 2018                                                                      Asia Pacific Holding Company Analysis 2018 |    5
Country (notes code)                        Singapore (SG)   Myanmar (MM)    Cambodia(KH)         Malaysia (MY)       Thailand (TH)        Taiwan (TW)
  Relevant criteria / Date last update            2018             2018              2018               2018                 2018                   2018

  11 Withholding Tax - Liquidation of
  Holding Co.                                                                 A 14% withholding                       Generally, no         If the distributed
                                                                              tax may be                              withholding tax for   assets amount ≦
                                                                              imposed on a
  Is a withholding tax imposed on the final                                                                           distribution of       Original Investing
                                                                              dividend
  distribution of assets of the holding                                       distribution or a                       assets.               amount: Tax
  company in liquidation?                                                     transfer of shares                                            exempted.
                                                                              to a non-resident                       Withholding tax
                                                                              during liquidation,                     may be applied to     If the distributed
                                                   No              No         where the                               the shareholders      assets amount >
                                                                                                         No
                                                                              distribution/transf                     of the holding        Original Investing
                                                                              er arises from an                       company if there      amount:Treated
                                                                              equity or a capital                     are gains arising     as dividend and is
                                                                              conversion from
                                                                                                                      from the              subject to
                                                                              retained earnings,
                                                                              which was not                           liquidation.          witholding tax
                                                                              subject to                                                    (refer to Q9)
                                                                              withholding tax on
                                                                              dividend
                                                                              distributions.

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Country (notes code)                        Singapore (SG)       Myanmar (MM)           Cambodia(KH)          Malaysia (MY)          Thailand (TH)        Taiwan (TW)
  Relevant criteria / Date last update              2018                 2018                   2018                  2018                   2018                2018

  12 Interest Deductions & Thin               Such interest        Interest expense      Interest expense is   Earning Stripping      Yes, it can be
  CapitalisationRules - Debt : Equity         expenses are         is generally          generally             Rules (“ESR”) is       expended of the            No
  Ratios                                      generally            deductible if it is   deductible.                                  company in
                                                                                                               introduced with
                                              deductible against   incurred in direct
                                                                                         However, it is        effect from 1          computation of
                                              dividend income,     relation to the
  (a) Interest Deductions                     as well as against   generation of any     limited to the        January 2019 to        net profit if it is
  Are Interest Expenses incurred on loans     any gains from the   taxable income.       amount of interest    replace Thin           expense for
  (received to finance the acquisition of     disposal of the      For local sourced     income plus 50%       Capitalisation         generating the
  the foreign participation) deductible       foreign              loans, interest       of the net profits    Rules that was         profit and related
  against dividend income: capital gains or   participation        expense is            (excuding interest    initially planned to   to the business of
  other income of the holding company?        which are            restricted to         income and            be implemented         the company in
                                              determined to be     maximum               expense). Also, the   on 31 December         Thailand.
                                              of an income         interest rate         interest rates for    2017. Under ESR,
                                              nature and           determined by
                                                                                         loans from third      the interest           There is no thin
                                              subjected to tax     Central Bank of
                                              accordingly          Myanmar. For          parties and related   deduction on           capitalisation rule
                                                                   foreign sourced       parties are           loans between          applied in
                                                                   loans the interest    restricted to 120%    related companies      Thailand.
                                                                   expense is            and 100% of the       within the same
                                                                   claimable only for    market interest       group will be
                                                                   loans approved by     rates respectively.   limited to a ratio
                                                                   the Myanmar                                 as determined by a
                                                                   Investment
                                                                                                               country’s tax
                                                                   Commission and
                                                                   Central Bank of                             authority ranging
                                                                   Myanmar.                                    from 10% to 30%
                                                                                                               of a company’s
                                                                                                               Earning Before
                                                                                                               Interest and Taxes
                                                                                                               (“EBIT”) or the
                                                                                                               Earning Before
                                                                                                               Interest, tax,
                                                                                                               Depreciation, and
                                                                                                               Amortisation
                                                                                                               (“EBITDA”).

© Nexia International 2018                                                                                        Asia Pacific Holding Company Analysis 2018 |    7
Country (notes code)                          Singapore (SG)     Myanmar (MM)   Cambodia(KH)    Malaysia (MY)        Thailand (TH)         Taiwan (TW)
  Relevant criteria / Date last update                2018             2018           2018             2018                 2018                   2018

  (b) Debt : Equity Ratios                                                                                                                         N/A
                                                       No               No             No               No                   No
  Are there restrictions on the level of
  non-equity capital financing of the
  holding company in the form of
  prescribed Debt: Equity ratios?

      Debt : Equity ratio:                             N/A             N/A            N/A               N/A                  N/A

  13 Controlled Foreign Corporation
  (“CFC”) &“anti-abuse” regulations

  (a) CFC Regulations                                  No              No             No                No                   No           a. On July 12,
  Are CFC regulations applied?                                                                                                              2016, the
                                                                                                                                            amendments
  Are the regulations applied only to a                                                                                                     were passed by
  prescribed “black list” of jurisdictions or                                                                                               the Legislative
  with reference to the effective rate of                                                                                                   Yuan, but the
  tax imposed in the overseas                                                                                                               effective date
  jurisdiction?                                                                                                                             has not yet been
                                                                                                                                            determined.

  (b) Other “anti-abuse” regulations            General anti-          No             No         General anti-       Arm’s length         b. About the
  Are “anti-abuse” provisions applied in        avoidance rules                                  avoidance rules     requirement for        General Anti-
  regard to the EU Parent-Subsidiary            and arm’s length                                 and arm’s length    related party          Avoidance Rules
                                                requirement for                                  requirement for     transactions           in Taiwan
                                                related party                                    related party
                                                transactions                                     transactions                               The Taiwan
                                                                                                                                            government
                                                                                                                                            amended Article
                                                                                                                                            43-3 & 4 of the
                                                                                                                                            Income Tax Act

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Country (notes code)                   Singapore (SG)   Myanmar (MM)   Cambodia(KH)   Malaysia (MY)       Thailand (TH)         Taiwan (TW)
  Relevant criteria / Date last update       2018             2018           2018           2018                 2018                  2018
                                                                                                                                 at July 12, 2016
                                                                                                                                 that,

                                                                                                                                 If a domestic
                                                                                                                                 profit-seeking
                                                                                                                                 enterprise and
                                                                                                                                 its affiliates hold
                                                                                                                                 more than 50%
                                                                                                                                 of the shares or
                                                                                                                                 capital of a CFC
                                                                                                                                 (Controlled
                                                                                                                                 Foreign
                                                                                                                                 Company) which
                                                                                                                                 is set up in low
                                                                                                                                 tax country
                                                                                                                                 (area), or have
                                                                                                                                 significant
                                                                                                                                 influence on the
                                                                                                                                 CFC, the
                                                                                                                                 shareholders of
                                                                                                                                 the domestic
                                                                                                                                 profit-seeking
                                                                                                                                 enterprises are
                                                                                                                                 required to
                                                                                                                                 report CFC
                                                                                                                                 profits based on
                                                                                                                                 their
                                                                                                                                 shareholding
                                                                                                                                 percentage &
                                                                                                                                 holding period in
                                                                                                                                 the CFC as
                                                                                                                                 investment
                                                                                                                                 income tax in
                                                                                                                                 their annual
© Nexia International 2018                                                               Asia Pacific Holding Company Analysis 2018 |   9
Country (notes code)                     Singapore (SG)   Myanmar (MM)    Cambodia(KH)          Malaysia (MY)       Thailand (TH)        Taiwan (TW)
  Relevant criteria / Date last update         2018               2018            2018                 2018                2018                  2018
                                                                                                                                           business income
                                                                                                                                           tax return.
                                                                                                                                           Tax loss can be
                                                                                                                                           deducted from
                                                                                                                                           its profit within
                                                                                                                                           10 years.

                                                                                                                                           A profit-seeking
                                                                                                                                           enterprise
                                                                                                                                           established
                                                                                                                                           under the laws
                                                                                                                                           of a foreign
                                                                                                                                           country, but
                                                                                                                                           having PEM
                                                                                                                                           (place of
                                                                                                                                           effective
                                                                                                                                           management)
                                                                                                                                           within the
                                                                                                                                           territory of
                                                                                                                                           Taiwan, is
                                                                                                                                           considered as
                                                                                                                                           domestic
                                                                                                                                           enterprise.
  14 Binding Advance Tax Rulings (pre-
  transaction)                                  Yes         There are no   There are no          Yes, the company
  Are Advance Tax Rulings available pre-                    specific       specific provisions   may apply for              Yes                 Yes
  transaction?                                              provisions     relating to advance   Advance Tax
                                                            relating to    tax rulings.          Rulings to the
                                                            advance tax                          Inland Revenue
                                                            rulings.                             Board of Malaysia.
  Are these rulings granted only in
  respect of specific situations?               Yes                                                     Yes                 Yes                 Yes

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Country (notes code)                     Singapore (SG)   Myanmar (MM)   Cambodia(KH)    Malaysia (MY)           Thailand (TH)       Taiwan (TW)
  Relevant criteria / Date last update           2018              2018           2018             2018                 2018               2018

  15 Other taxes

  (a) Capital Duty                         (a) 0%           (a)   0%       (a)   0%       (a) MYR1,000 –         (a)     No          (a)   N/A
                                                                                              MYR70,000 3
  (b) Transfer Tax on shares               (b) 0.2%         (b)   0.3%     (b)   0.1%     (b) MYR1 or            (b) Stamp duty at   (b)   3%
                                                                                              MYR3 for               0.1% of sale
                                                                                              every                  value or paid
                                                                                              MYR1,000 or            up capital
                                                                                              fraction part          whichever is
                                                                                              of MYR1,000 4          the greater
  (c) Annual Net Worth / Patrimonial Tax   (c) 0%           (c)   0%       (c)   0%       (c) N/A                (c) No              (c) Extra 5% tax
                                                                                                                                     on undistributed
                                                                                                                                     surplus earnings
  (d) Trade Tax                            (d) 7% 3         (d)   5%1      (d)   10%3     (d) 6% or 0%5          (d) No VAT for      (d) 5% VAT
                                                                                                                     transfer of
                                                                                                                     shares

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Country (notes code)                        Singapore (SG)     Myanmar (MM)         Cambodia(KH)        Malaysia (MY)         Thailand (TH)        Taiwan (TW)
  Relevant criteria / Date last update              2018                2018               2018                2018                  2018                2018

  16 Double Tax Treaty Network

  (a) Number of treaties in operation         (a) 84             (a)   8              (a) 2              (a) 72 signed          (a) 61 countries   (a) 32
                                                  (Comprehensi         (Comprehen         (Comprehens        Double                                Comprehensive &
                                                  ve), 8               sive), &2          ive),&2            Taxation                              13 Limited till end
                                                  (Limited) &5         (Signed, not       (Signed, not       Agreement, 2                          of 2017
                                                  (Signed, not         ratified)          ratified)          limited
                                                  ratified)                                                  agreements,
                                                                                                             1 Income Tax
                                                                                                             Exemption
                                                                                                             Order.
  (b) Is the holding company type             (b) Generally no   (b)   No             (b) No             (b) Generally no.    (b) Generally no     (b) No
  excluded from any of the treaties?

  (c) Do any of the treaties include “anti-   (c) Yes            (c)   Yes            (c) No             (c) There are no     (c) Yes (some        (c) No
  treaty shopping” provisions and/or                                                                         specific anti-   countries e.g. USA
  detailed “beneficial ownership” tests?                                                                     treaty           –Thailand Tax
                                                                                                             shopping         Treaty)
                                                                                                             provisions.
                                                                                                             However, the
                                                                                                             general anti-
                                                                                                             avoidance
                                                                                                             provisions can
                                                                                                             be used.

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Country (notes code)                   Singapore (SG)   Myanmar (MM)         Cambodia(KH)         Malaysia (MY)         Thailand (TH)      Taiwan (TW)
  Relevant criteria / Date last update       2018               2018                 2018                 2018                 2018               2018

  17 Exchange Controls
                                              No          Citizens,            Payments for        Generally no – a      Exchange control          No
  Are Exchange Controls restrictions                      foreigners           commercial          resident is freely    is applied in
  applied in respect of the holding                       and companies in     transactions may    permitted to make     general pursuant
  company type?                                           Myanmar must         be made freely      payments to a         to the Exchange
                                                          obtain permission    between residents   non-resident for      Control Act
                                                          from the Foreign     and non-            the settlement of
                                                          Exchange             residents,          domestic and
                                                          Management           provided they are   international trade
                                                          Department in all    made through an     in goods and
                                                          of their practical   authorized bank.    services.
                                                          dealings with        Funds transfer
                                                          foreign exchange     exceeding USD
                                                          in connection with   10,000 must be
                                                          borrowing foreign    declared to the
                                                          exchange from        National Nank of
                                                          abroad and           Cambodia before
                                                          repaying the         the transfer.
                                                          principal and
                                                          interest thereof,
                                                          making any
                                                          payment to
                                                          persons abroad,
                                                          opening accounts
                                                          in foreign banks
                                                          abroad and the
                                                          remittance of
                                                          profits.

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Country (notes code)                   Singapore (SG)       Myanmar (MM)           Cambodia(KH)          Malaysia (MY)         Thailand (TH)       Taiwan (TW)
  Relevant criteria / Date last update          2018                 2018                  2018                  2018                 2018                2018

  18 Base Erosion Profit Shifting

  What kind of tests have been           Introduction of :    There are no          There are no          (a) Income Tax        Introduction of    1.Transfer Pricing
  introduced as a result of BEPS?                             specific provisions   specific provisions   (Transfer Pricing)    transfer pricing
                                         (a)                  relating to BEPS.     relating to BEPS.     Rules 2012 and        documentation      2. Country by
                                         Contemporaneou                                                   Section 140A of       requirements for   Country report
                                         s transfer pricing                                               the Income Tax        related party
                                         documentation                                                    Act 1967 are          transactions       3. Master File
                                         requirements for                                                 applicable on
                                         related party                                                    controlled
                                         transactions                                                     transactions.
                                         exceeding
                                         specified                                                        (b) Income Tax
                                         thresholds;                                                      (Country-by-
                                         (b) Prescribed                                                   Country
                                         reporting                                                        Reporting) Rules
                                         requirements for                                                 2016 came into
                                         such transactions                                                operation on 1
                                         which exceed the                                                 January 2017. The
                                         threshold; and                                                   Rules appy to a
                                         (c) Country by                                                   multinational
                                         Country Reporting                                                corporation group
                                         (CbCR) for certain                                               which meet with
                                         Singapore-based                                                  certain conditions.
                                         multinationals
                                         meeting certain
                                         conditions.
                                         (d) To adopt the
                                         Principal Purpose
                                         Test in
                                         Singapore’s tax
                                         treaties.

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Country (notes code)                   Singapore (SG)        Myanmar (MM)   Cambodia(KH)   Malaysia (MY)      Thailand (TH)        Taiwan (TW)
  Relevant criteria / Date last update           2018              2018           2018           2018                2018                 2018
                                         Asymmetrical
                                         application of
                                         simplified
                                         limitation of
                                         benefits rules will
                                         not be allowed.

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Country (notes code)                            Australia (AUS)              Indonesia (ID)         Hong Kong (HK)            Japan (JN)              China (CN)
  Relevant criteria / Date last update                   2018                       2018                   2018                    2018                     2018

  1 Treatment of Dividend Income
                                                Foreign-sourced            Dividend income            Exempt from Tax      95% of foreign-          Foreign or domestic-
    How is Dividend Income treated for tax      dividend income            received in Indonesia                           sourced dividend         sourced dividend
    purposes – in particular, is the dividend   received in Australia is   is taxable under the                            income, which is not a   income received in
    income either                               not taxable under          following                                       deductible dividend at   China is included as
                                                certain circumstances      circumstance:                                   the paying               company revenue and
  (a) exempt from tax under a “participation                               -    Individual : 10%                           corporation, shall be    is subject to EIT at
  exemption” or                                                                 final tax from                             excluded from taxable    25%. Foreign paid tax
                                                                                gross amount                               income in Japan          credit is allowed.
                                                                           -    Corporate :
                                                                                1. Ownership of
                                                                                     less than
                                                                                     25%, subject
                                                                                     to corporate
                                                                                     tax;
                                                                                2. Ownership of
                                                                                     at least 25%
                                                                                     is not subject
                                                                                     to tax;

  (b) taxable with credit for foreign tax                                  b   Foreign-
  credits                                                                      sourcced
                                                                               Dividend income
                                                                               received in
                                                                               Indonesia is
                                                                               taxable. If the
                                                                               dividend suffers
                                                                               foreign
                                                                               witholding tax,
                                                                               then foreign tax
                                                                               credits are
                                                                               available.

© Nexia International 2018                                                                                        Asia Pacific Holding Company Analysis 2018 | 16
Country (notes code)                               Australia (AUS)           Indonesia (ID)         Hong Kong (HK)             Japan (JN)               China (CN)
  Relevant criteria / Date last update                     2018                      2018                   2018                    2018                      2018

  2 Minimum Participation for Dividend
    income                                                 10%                       N/A              No such Regulation    At least 25%, but can    20% if applying for
    Minimum participation holding level (%)                                                                                 be reduced to lower %    foreign tax credit
    required to be satisfied                                                                                                with a tax treaty.

  3 Treatment of Capital Gains Income              A gain derived from      Capital gains are         Exempt from Tax       Capital gains derived    Capital gains in China
                                                   the disposal of shares   generally assessable                            from disposal of any     are treated as
    How is Capital Gains Income treated for        in a foreign company     together with                                   type of shares are       company revenue
    tax purposes – in particular, is the capital   is reduced where that    ordinary income and                             taxable regardless of    subject to EIT of 25%.
    gain either                                    foreign company has      subject to tax at the                           participation %, but a
                                                   underlying active        standard corporate                              foreign tax on the       If holding at least 20%
    (a) exempt from tax under a                    business assets. To      tax rate. Where                                 capital gains shall be   of a foreign company,
    “participation                                 qualify for the          foreign taxes are                               allowed as a credit      foreign tax credit may
    exemption” or                                  reduction the            suffered, foreign tax                           against Japanese         apply. Foreign tax
                                                   Australian company       credits are available.                          corporation taxes, to    credit eligible for up to
    (b) taxable with credit for foreign tax        must have held a         Proceeds from                                   the extent of those      3 tiers of holding.
    credits                                        voting interest of 10%   disposal of shares                              appropriate to the
                                                   or more in the foreign   listed on the                                   gains
                                                   company for a            Indonesian stock
                                                   continuous period of     exchange are not
                                                   12 months or more.       subject to normal
                                                   The gain is reduced by   corporate income tax
                                                   the % of active          but subject to a final
                                                   business assets to the   witholding tax of
                                                   total assets held by     0.1% from the gross
                                                   the foreign              sales proceeds. An
                                                   company.2                additional tax of 0.5%
                                                                            applied to the share
                                                                            value of founder
                                                                            shares at the time an
                                                                            initial public offering
                                                                            takes place.

© Nexia International 2018                                                                                         Asia Pacific Holding Company Analysis 2018 | 17
Country (notes code)                          Australia (AUS)       Indonesia (ID)    Hong Kong (HK)             Japan (JN)              China (CN)
  Relevant criteria / Date last update                2018                2018                2018                    2018                    2018

  4 Minimum Participation for Capital Gains

    Minimum participation holding level (%)   Refer to item 3 above        N/A         No such Requirement             N/A              See item 3 above
    required to be satisfied

  5 Minimum “ownership” period
  requirements

  What are the minimum “ownership” period            (a) Nil               N/A         No such Requirement    (a) At least 6 months            N/A
  Requirements in respect of:                                                                                     ending on the
    (c) Dividend income                                                                                           date of
                                                                                                                  determination on
                                                                                                                  entitlement to
                                                                                                                  the dividend
    (d) Capital gains derived from the             12 months                                                  (b) N/A
        participating holding?

  6 “Active Business” Test on underlying
  participation

  Does the underlying subsidiary require to            No                  N/A         No such Requirement             No             Can be a holding
  be an active operating company or can the                                                                                           company
  subsidiary be, itself, a passive holding
  company?

© Nexia International 2018                                                                           Asia Pacific Holding Company Analysis 2018 | 18
Country (notes code)                          Australia (AUS)      Indonesia (ID)          Hong Kong (HK)              Japan (JN)             China (CN)
  Relevant criteria / Date last update               2018                 2018                      2018                    2018                    2018

  7 “Subject to tax” Test on underlying
    participation

  Does the subsidiary require to be subject           No          Subsidiary and           No such Requirement                No                     No
  to taxation in its jurisdiction of                              Holding Company are
  registration?                                                   different legal entity
                                                                  and have their
  If so, what is the minimum acceptable level                     respective tax
  of taxation (% rate) in the jurisdiction of                     obligation based on
  the holding company for the purposes of                         country in which it is
  this test                                                       situated.

  8 Corporate Rate of Taxation

  Corporate tax rate in jurisdiction                27.5%                 25%              8.25% for first HK$ 2    Effective tax rate is           25%
                                                                                           million. Profits above   30.86% (30.62% for
                                                                                           that at 16.5%            the tax period
                                                                                           (Restricted to only      beginning on and
                                                                                           one enterprise           after 1 April,2018)
                                                                                           nominated among
                                                                                           connected entities)

  9 Withholding Tax - Dividend (Outgoing)

  (a) Non-Treaty rate on Dividends                   30%              (a) 20%                       Zero                   (a) 20.42%              a) 10%

  (b) Treaty – range of withholding taxes         0% to 15%           (b) 5% - 20%                  Zero                  (b) 0% - 20%           b) 5 – 15%

© Nexia International 2018                                                                                 Asia Pacific Holding Company Analysis 2018 | 19
Country (notes code)                             Australia (AUS)            Indonesia (ID)       Hong Kong (HK)              Japan (JN)              China (CN)
  Relevant criteria / Date last update                   2018                      2018                   2018                    2018                     2018

  10 Withholding Tax - Dividends
     (Incoming)

  General range of withholding taxes on                0% -15%                  5% - 20%               0% - 10%                 0% - 20%            See item 1 above
  dividends in the foreign source jurisdiction
  in terms of treaty network.

  11 Withholding Tax - Liquidation of
     Holding Co.                                 Yes, but only to the               No                    None            Yes, to the extent of   For holding
                                                 extent the distribution                                                  deemed dividend         companies registered
  Is a withholding tax imposed on the final      represents after tax                                                     portion                 in China and
  distribution of assets of the holding          unfranked profits.                                                                               undergoing
  company in liquidation?                                                                                                                         liquidation,
                                                                                                                                                  withholding tax (at
                                                                                                                                                  treaty rate) will apply
                                                                                                                                                  to any gains the
                                                                                                                                                  foreign investors may
                                                                                                                                                  realize.

  12 Interest Deductions & Thin                  Interest expense is       (a) Interest expense   Interest expense used            Yes            Interest may be
     Capitalisation                              deductible against            are generally      to finance capital                              deductible if debt:
     Rules - Debt : Equity Ratios                dividend income and           deductible         investment is not                               equity is not
                                                 other foreign income          against income.    deductible.                                     exceeded and
  (a) Interest Deductions                        or gains provided the                            Income from capital                             interest rates are
  Are Interest Expenses incurred on loans        company meets the                                investment is not                               proven to have been
  (received to finance the acquisition of the    thin capitalisation                              taxable                                         determined at arm’s
  foreign participation) deductible against      threshhold tests,                                                                                length.
  dividend income: capital gains or other        which are subject to a
  income of the holding company?                 de minimus
                                                 exclusion.5

© Nexia International 2018                                                                                       Asia Pacific Holding Company Analysis 2018 | 20
Country (notes code)                         Australia (AUS)      Indonesia (ID)    Hong Kong (HK)            Japan (JN)              China (CN)
  Relevant criteria / Date last update              2018                   2018            2018                    2018                    2018

  (b) Debt : Equity Ratios                          Yes6         (b) Yes               No restriction      Yes (Thin                        Yes
      Are there restrictions on the level of                                                               Capitalization Rule
      non-equity capital financing of the                        For the purpose of                        and
      holding company in the form of                             calculating the                           EarningsStripping
      prescribed Debt: Equity ratios?                            Income tax is                             Rule1)
                                                                 determined the
                                                                 amount of debt to
                                                                 equity ratio is

      Debt : Equity ratio:                                                 4: 1            N/A             3 to 1 debt-to-equity   Ratio depends on
                                                                                                           ratio for the Thin      registered capital and
                                                                                                           Capitalization Rule,    total investment.
                                                                                                           but N/A for the
                                                                                                           Earnings Stripping      Allowed non-equity
                                                                                                           Rule2                   investment ranges
                                                                                                                                   from 50% to 70% of
                                                                                                                                   the total investment.

© Nexia International 2018                                                                        Asia Pacific Holding Company Analysis 2018 | 21
Country (notes code)                             Australia (AUS)        Indonesia (ID)      Hong Kong (HK)              Japan (JN)               China (CN)
  Relevant criteria / Date last update                   2018                    2018               2018                     2018                      2018

  13 Controlled Foreign Corporation
  (“CFC”) & “anti-abuse” regulations

  (a) CFC Regulations                                     Yes          (a) Yes                No such regulation    (a) Yes, CFC               (a) yes, applicable
  Are CFC regulations applied?                                                                                          regulations shall          where tax rate in
                                                                                                                        be applied with            the foreign
  Are the regulations applied only to a                   No           The regulations are                              reference to the           jurisdiction is 0%
  prescribed “black list” of jurisdictions or                          applied to all                                   effective tax rate         - 50% of China’s
  with reference to the effective rate of tax                          jurisdiction                                     imposed in the             tax rate.
  imposed in the overseas jurisdiction?                                                                                 foreign
                                                                                                                        jurisdiction.
  (b) Other “anti-abuse” regulations             General anti-         (b) General anti-                            (b) General anti-          (b) China has
  Are “anti-abuse” provisions applied in         avoidance rules and       avoidance rules                              avoidance rules            extensive GAAR
  regard to the EU Parent-Subsidiary             arm’s length              and arm’s length                             and arm’s length           regulations and
                                                 requirement for           requirements for                             requirement for            TP rules.
                                                 related party             related party                                related party
                                                 transactions              transactions.                                transactions

  14 Binding Advance Tax Rulings (pre-
     transaction)

  Are Advance Tax Rulings available pre-                  Yes                    Yes                 Yes                      Yes              In general, China tax
  transaction?                                                                                                                                 bureaus offer no
                                                                                                                                               binding advance tax
  Are these rulings granted only in respect of            Yes                    Yes                 Yes            An advance Tax ruling      rulings, although
  specific situations?                                                                                              is granted only in         Advanced Pricing
                                                                                                                    respect of a transfer      Arrangements are
                                                                                                                    price in a related party   gaining acceptance.
                                                                                                                    transaction

© Nexia International 2018                                                                                 Asia Pacific Holding Company Analysis 2018 | 22
Country (notes code)                          Australia (AUS)         Indonesia (ID)     Hong Kong (HK)              Japan (JN)             China (CN)
  Relevant criteria / Date last update                  2018                   2018              2018                        2018                2018

  15 Other taxes

  (a) Capital Duty                               (a) 0%              (a) No                 (a) 0.1% maximum     (a)   None                       N/A
                                                                                                HK$30,000
  (b) Transfer Tax on shares                     (b) 0% - 0.6%       (b) 5%                 (b) 0.1%             (b) None

  (c) Annual Net Worth / Patrimonial Tax         (c) 0%              (c) No                 (c) None             (c)   None

  (d) Trade Tax                                  (d) 10% GST         (d) No                 (d) None             (d) None

  16 Double Tax Treaty Network

  (a) Number of treaties in operation         (a) 44                 (a) 65                 (a) 32               (a) 57                  100 comprehensive
                                                  (Comprehensive),       (comprehensive)                             (Comprehensive)     treaties plus an
                                                  9 (Limited) & 2                                                    for 68              agreement with Hong
                                                  (signed not                                                        nations/areas, 11   Kong. Holding
                                                  ratified)                                                          (Exchange of        companies not
                                                                                                                     Information         excluded. Treaties
                                                                                                                     Only) for 11        contain beneficial
                                                                                                                     nations/areas (as   owner definitions, but
                                                                                                                     of 5/1/18)          details of beneficial
  (b) Is the holding company type excluded    (b) Generally no       (b) Generally no       (b) Generally no     (b) No                  ownership tests are
    from any of the treaties?                                                                                                            generally not
                                                                                                                                         contained in the
  (c) Do any of the treaties include “anti-   (b) Yes                (c) Yes                (c) Yes              (c)   Yes               treaties.
    treaty shopping” provisions and/or
    detailed “beneficial ownership” tests?

© Nexia International 2018                                                                              Asia Pacific Holding Company Analysis 2018 | 23
Country (notes code)                           Australia (AUS)       Indonesia (ID)         Hong Kong (HK)            Japan (JN)              China (CN)
  Relevant criteria / Date last update                 2018                  2018                  2018                    2018                     2018

  17 Exchange Controls                                              The Indonesian
                                                                    exchange control
  Are Exchange Controls restrictions applied            No          regulations                    No                       No                       No
  in respect of the holding company type?                           mentioned in Finance
                                                                    Minister Regulation
                                                                    No. 39/PMK.03/2017
                                                                    regarding Information
                                                                    exchange procedures
                                                                    based on international
                                                                    agreements.

  18 Base Erosion Profit Shifting              Introduction of      OECD BEPS Action 13           None                  No such Test       China has extensive
                                               contemporaneous      has been                                                               TP documentation
  What kind of tests have been introduced      transfer pricing     implemented starting                                                   and related party
  as a result of BEPS?                         documentation        on fiscal year 2016.                                                   transaction
                                               requirements for     Local file, Master file                                                requirements, GAAR
                                               related party        and country by                                                         regulations and other
                                               transactions         country reporting                                                      regulations related to
                                               exceeding specific   guidlines for trasnsfer                                                tax adjustment policy.
                                               thresholds8          pricing have been
                                                                    prescribed.                                                            Updated TP
                                                                                                                                           regulations call for
                                                                                                                                           Country-by-Country
                                                                                                                                           reporting.
                                                                                                                                           Contemporaneous TP
                                                                                                                                           documentation now
                                                                                                                                           includes a Master File
                                                                                                                                           and a Local file as per
                                                                                                                                           BEPS
                                                                                                                                           recommendations.

© Nexia International 2018                                                                                Asia Pacific Holding Company Analysis 2018 | 24
New Zealand
  Country (notes code)                        Korea (KOR)          Vietnam (VN)            India (IN)                            Philippines (PH)        Nepal (NP)
                                                                                                                 (NZ)
  Relevant criteria / Date last update             2018                  2018                 2018                 2018                2018                 2018

  1 Treatment of Dividend Income            Foreign-sourced       Dividend income      Participation         Foreign-sourced    Foreign-sourced      Foreign-sourced
    How is Dividend Income treated          dividend income       arising from         exemption system      dividend income    dividend income      dividend income
    for tax purposes – in particular, is    received in Koea is   foreign              is not prevalent in   received in New    received in the      received in Nepal is
    the dividend income either              taxable (no           investments is       India.                Zealand is not     Philippines is       taxable and can
                                            particiapation        taxed in                                   taxable under      taxable at 30%.      claim foreign tax
    (a) exempt from tax under a             exemption) but        accordance with      Dividend income       certain            Withholding tax at   credit for any tax
       “participation                       foreign tax credits   DTAs, otherwise,     earned by Indian      circumstances –    source could be      paid in foreign
       exemption” or                        are available         it is taxable with   company from          (note 1)           claimed as tax       country.
                                            subject to            credit for foreign   foreign subsidiary                       credit against PH    Dividend income
                                            limitations 1         tax credits          (in which Indian                         income tax           received by a
                                                                                       Company holds at                                              person from the
  (b) taxable with credit for foreign tax                                              least 26% of                                                  shares held on
    credits                                                                            shares) shall be                                              companies or a
                                                                                       taxable at the rate                                           partnership firm is
                                                                                       of 15%*. In other                                             taxable as a final
                                                                                       case, it is taxable                                           withholding basis.
                                                                                       at a corporate tax
                                                                                       rate.

                                                                                       However, foreign
                                                                                       tax credit (FTC)
                                                                                       shall be available
                                                                                       against such
                                                                                       dividend foreign
                                                                                       income, subject to
                                                                                       relevant tax treaty
                                                                                       and domestic FTC
                                                                                       rules.

                                                                                       *Plus applicable
                                                                                       surcharge and
                                                                                       cess

© Nexia International 2018                                                                                        Asia Pacific Holding Company Analysis 2018 | 25
New Zealand
  Country (notes code)                   Korea (KOR)   Vietnam (VN)       India (IN)                         Philippines (PH)        Nepal (NP)
                                                                                              (NZ)
  Relevant criteria / Date last update      2018           2018              2018             2018                 2018                 2018

  2 Minimum Participation for
    Dividend income

  Minimum participation holding level       N/A2           N/A        In order to claim       10%                  N/A                   N/A
  (%) required to be satisfied                                        the beneficial tax
                                                                      rate of 15% (plus
                                                                      applicable
                                                                      surcharge and
                                                                      cess) on foreign
                                                                      dividend income,
                                                                      26% share in
                                                                      foreign company
                                                                      is required.

© Nexia International 2018                                                                    Asia Pacific Holding Company Analysis 2018 | 26
New Zealand
  Country (notes code)                         Korea (KOR)         Vietnam (VN)             India (IN)                               Philippines (PH)          Nepal (NP)
                                                                                                                   (NZ)
  Relevant criteria / Date last update             2018                  2018                  2018                  2018                  2018                    2018

  3 Treatment of Capital Gains               Capital gains on     Capital gains from    There is no           Generally capital     Gains derived from      Capital gains
  Income                                     the disposal of      disposal of shares    participation         gains on the          disposal of shares of   derived from
                                             shares of a          or invested capital   exemption system      disposal of shares    stock of domestic       disposal of shares
  How is Capital Gains Income treated        subsidiary are       is taxable at the     in India.             are exempt from       corporations which      is taxable in Nepal.
  for tax purposes – in particular, is the   taxable at the       rate of 20%.                                income tax. Some      are not listed in the   (Note 1)
  capital gain either                        relevant corporate                         Capital gains         exceptions do         PH stock exchange
                                             tax rate. Capital                          derived from          apply, such as land   are subject to
  (a) exempt from tax under a                gains on the                               disposal of shares    rich companies        capital gains tax of
  “participation exemption” or               shares of a Korean                         of foreign            (residential land)    5% on the net
                                             company derived                            company is            where shares are      amount of capital
  (b) taxable with credit for foreign tax    by a non-resident                          taxable in India as   sold within a         gains of individual
  credits                                    seller without a                           long term or          defined period.       Filipino citizens,
                                             Korean PE are                              short-term gains                            resident aliens, and
                                             subject to tax of                          depending upon                              domestic
                                             the lower of 11%                           period of holding                           corporation; 5% for
                                             of share proceeds                          of foreign                                  the the first P100,
                                             or 22% of realized                         company shares.                             000 and 10% on the
                                             gains.                                                                                 excess of the
                                                                                        Further, foreign                            amount of net
                                                                                        tax credit would                            capital gain for
                                                                                        be available on                             resident foreign
                                                                                        such capital gain                           corporation and non
                                                                                        income subject to                           resident foreign
                                                                                        relevant tax treaty                         corporation. For
                                                                                        and domestic FTC                            listed shares, tax is
                                                                                        rules.                                      6/10 of 1% of gross
                                                                                                                                    selling price. Gains
                                                                                                                                    derived from
                                                                                                                                    disposal of shares in
                                                                                                                                    foreign
                                                                                                                                    corporations are

© Nexia International 2018                                                                                          Asia Pacific Holding Company Analysis 2018 | 27
New Zealand
  Country (notes code)                   Korea (KOR)   Vietnam (VN)       India (IN)                          Philippines (PH)             Nepal (NP)
                                                                                               (NZ)
  Relevant criteria / Date last update      2018           2018              2018              2018                  2018                    2018
                                                                                                             subject to tax at
                                                                                                             30%.

                                                                                                             Withholding tax at
                                                                                                             source could be
                                                                                                             claimed as tax credit
                                                                                                             against PH income
                                                                                                             tax.

  4 Minimum Participation for
  Capital Gains

  Minimum participation holding level       N/A            N/A               N/A               10%                   N/A                      N/A
  (%) required to be satisfied

  5 Minimum “ownership” period
  requirements                              N/A            N/A        (a) Dividend             N/A                   N/A             (a)   Dividend
                                                                      Income – N/A                                                         Income – N/A
  What are the minimum “ownership”
  period Requirements in respect of:
    (e) Dividend income                                               (b) Capital Gains –                                            (b)   No such
                                                                      Given that there is                                                  provision of
    (f) Capital gains derived from the                                no participation                                                     minimum
        participating holding?                                        exemption, under                                                     ownership
                                                                      Indian tax law,                                                      period except
                                                                      there is no                                                          Land and
                                                                      minimum                                                              building
                                                                      ownership criteria.

© Nexia International 2018                                                                     Asia Pacific Holding Company Analysis 2018 | 28
New Zealand
  Country (notes code)                   Korea (KOR)   Vietnam (VN)       India (IN)                           Philippines (PH)        Nepal (NP)
                                                                                                (NZ)
  Relevant criteria / Date last update      2018           2018                2018             2018                  2018                2018
                                                                      However, period
                                                                      of holding would
                                                                      be important for
                                                                      nature of Capital
                                                                      gain. The Capital
                                                                      gain on sale of
                                                                      foreign company
                                                                      share would be
                                                                      considered as
                                                                      Short Term, if
                                                                      period of holding
                                                                      is less than 2 years
                                                                      and it would Long
                                                                      Term Capital
                                                                      Gains, if period of
                                                                      holding is More
                                                                      than 2 years.

                                                                      Rate of Capital
                                                                      gain tax would
                                                                      differ for short
                                                                      term and long-
                                                                      term capital gain.

  6 “Active Business” Test on
  underlying participation

    Does the underlying subsidiary           No            N/A        Subsidiary of             N/A           It can be a passive          N/A
    require to be an active operating                                 Indian company                          holding company.
    company or can the subsidiary be,                                 can be a passive
    itself, a passive holding company?                                holding company.

© Nexia International 2018                                                                      Asia Pacific Holding Company Analysis 2018 | 29
New Zealand
  Country (notes code)                      Korea (KOR)   Vietnam (VN)       India (IN)                           Philippines (PH)        Nepal (NP)
                                                                                                   (NZ)
  Relevant criteria / Date last update         2018           2018               2018              2018                 2018                  2018
                                                                         However, if the
                                                                         ‘’Place of Effective
                                                                         Management
                                                                         (POEM)” of a
                                                                         foreign company
                                                                         is considered in
                                                                         India, such
                                                                         company would be
                                                                         considered as tax
                                                                         resident of India
                                                                         and global income
                                                                         of such company
                                                                         would be taxable
                                                                         in India.

  7 “Subject to tax” Test on
  underlying participation                      No            No         The subsidiary is          No                   No            The subsidiary is
                                                                         treated as a                                                  treated as a
  Does the subsidiary require to be                                      separate legal                                                separate legal
  subject to taxation in its jurisdiction                                entity distinct                                               entity distinct
  of registration?                                                       from the Holding                                              from the Holding
                                                              N/A        Company and                                                   Company &
  If so, what is the minimum                                             accordingly                                                   accordingly
  acceptable level of taxation (% rate)                                  subjected to local                                            subjected to local
  in the jurisdiction of the holding                                     laws of the                                                   laws of the
  company for the purposes of this                                       country in which it                                           country in which it
  test?                                                                  is situated.                                                  is situated.

© Nexia International 2018                                                                         Asia Pacific Holding Company Analysis 2018 | 30
New Zealand
  Country (notes code)                   Korea (KOR)   Vietnam (VN)       India (IN)                          Philippines (PH)        Nepal (NP)
                                                                                               (NZ)
  Relevant criteria / Date last update      2018           2018              2018              2018                 2018                 2018

  8 Corporate Rate of Taxation             24.2%3          20%        Indian Company –         28%                  30%            [Banks, financial
                                                                      25%* in case                                                 institution &
  Corporate tax rate in jurisdiction                                  turnover / gross                                             general business -
                                                                      receipts up to INR                                           30%)
                                                                      2500 Million in FY
                                                                      2016-17                                                      Cooperatives -
                                                                      and In other cases                                           20%
                                                                      30%*
                                                                      Foreign Company                                              Others– 25%
                                                                      – 40%*
                                                                      *Plus surcharge &
                                                                      cess, if applicable

  9 Withholding Tax - Dividend
  (Outgoing)

  (a) Non-Treaty rate on Dividends          22%            N/A               NIL1              30%              15% - 30%2                5%

  (b) Treaty – range of withholding      0% - 27.5%4                         N/A             0% - 15%          5% to 25% final         5% - 15%
  taxes                                                                                                        withholding tax

  10 Withholding Tax - Dividends
  (Incoming)

  General range of withholding taxes      0% - 20%       0% -15%          5% -25%            0% - 15%             5% -25%                0-25
  on dividends in the foreign source
  jurisdiction in terms of treaty
  network.

© Nexia International 2018                                                                     Asia Pacific Holding Company Analysis 2018 | 31
New Zealand
  Country (notes code)                   Korea (KOR)   Vietnam (VN)   India (IN)                         Philippines (PH)        Nepal (NP)
                                                                                        (NZ)
  Relevant criteria / Date last update      2018           2018         2018              2018                 2018                 2018

  11 Withholding Tax - Liquidation of
  Holding Co.

  Is a withholding tax imposed on the       Yes5           No            No2       Yes, when capital        0% - 30%3                No
  final distribution of assets of the                                              gains are paid to a                             (Note 2)
  holding company in liquidation?                                                  non-resident
                                                                                   corporate
                                                                                   shareholder,
                                                                                   and/or to the
                                                                                   extent the
                                                                                   distribution is
                                                                                   unimputed.
                                                                                   Shareholders
                                                                                   owning less than
                                                                                   10% holdings also
                                                                                   pay withholding
                                                                                   tax on dividends.

© Nexia International 2018                                                                Asia Pacific Holding Company Analysis 2018 | 32
New Zealand
  Country (notes code)                       Korea (KOR)         Vietnam (VN)                India (IN)                            Philippines (PH)       Nepal (NP)
                                                                                                                   (NZ)
  Relevant criteria / Date last update           2018                   2018                   2018                  2018                  2018              2018
                                                                                                                                   Such interest
  12 Interest Deductions & Thin            Interest expenses             No                     Yes            Interest expenses   expenses are not           Yes
  Capitalisation                           are generally                                                       are deductible      generally de-
  Rules - Debt : Equity Ratios             deductible against                                                  against taxable     ductible against
                                           dividend income,                                                    dividend income
  (a) Interest Deductions                                                                                                          dividend income
                                           as well as against                                                  and other taxable
  Are Interest Expenses incurred on        any gains or other                                                  foreign income or   because such
  loans (received to finance the           income of the                                                       gains, provided     dividend is passive
  acquisition of the foreign               holding company.                                                    the company         income and the
  participation) deductible against                                                                            meets the thin      interest expense
  dividend income: capital gains or                                                                            capitalisation      is not incurred in
  other income of the holding                                                                                  threshhold tests    the carrying of
  company?                                                                                                     and the rate is     business. If the
                                                                                                               calculated with     interest is capita-
                                                                                                               reference to
  (b) Debt : Equity Ratios                                                                                                         lized as part of the
                                                                                                               transfer pricing
  Are there restrictions on the level of                                                 No. However,          principles.         cost of acquisition
  non-equity capital financing of the                                                    interest paid in                          of the foreign
  holding company in the form of                                                         excess of 30%                             investment, then
  prescribed Debt:                               Yes6           The restriction is       Earning before              Yes2          it would be de-
  Equity ratios?                                                mentioned in the         interest, taxes,                          ductible in de-           N/A
                                                                draft amended            depreciation and                          termining the
      Debt : Equity ratio:                  200% (600% for      law but it is still in   amortisation                              capital gain
                                                financial       controversial.           (EBITDA) of Indian                        subject to the
                                              institutions)                              company for                               30% normal cor-
                                                                (as provided in          borrowings from             60%           porate tax rate.
                                                                the amended tax          foreign associated                        Moreover, interest
                                                                law)                     enterprises is not                        incurred on loans
                                                                From 2016: 4:1           tax-deductible                            from related par-
                                                                From 2019: 3:1           expense.                                  ties may not be
                                                                                         However, such                             deductible under
                                                                                         excess interest                           certain conditions
                                                                                         can be carried                            See note 4
                                                                                         forward for set-off
                                                                                         upto eight years.                         N/A

© Nexia International 2018                                                                                            Asia Pacific Holding Company Analysis 2018 | 33
New Zealand
  Country (notes code)                      Korea (KOR)        Vietnam (VN)          India (IN)                             Philippines (PH)        Nepal (NP)
                                                                                                            (NZ)
  Relevant criteria / Date last update          2018                2018                2018                  2018                 2018                2018
  13 Controlled Foreign
  Corporation ( “CFC”) & “anti-
  abuse” regulations                            Yes7                 No          No                            Yes                  No                  Yes
  (a) CFC Regulations                                                            (however, some
  Are CFC regulations applied?                                                   echo of the CFC
                                                                                 rules found in
  Are the regulations applied only to a   With reference to                      POEM Rules)                   No                                       No
  prescribed “black list” of              the effecive tax
  jurisdictions or with reference to      rate of the
  the effective rate of tax imposed in    overseas
  the overseas jurisdiction?              jurisdiction

  (b) Other “anti-abuse” regulations      General anti-       General anti-      General Anti-          General anti-       General anti-
  Are “anti-abuse” provisions applied     avoidance rules     avoidance rules    Avoidance Rules        avoidance rules     avoidance rules     General and
  in regard to the EU Parent-             and arm’s length    and arm’s length   (GAAR) are             and arm’s length    and arm’s length    Specific Anti-
  Subsidiary                              requirement for     requirement for    applicable, as anti-   requirement for     requirement for     Avoidance Rules is
                                          related party       related party      abuse rule.            related party       related party       applicable in
                                          transactions        transactions                              transactions        transactions        Nepal. Arm’s
                                                                                                                                                length
                                                                                                                                                requirement for
                                                                                                                                                related party
                                                                                                                                                transactions

© Nexia International 2018                                                                                      Asia Pacific Holding Company Analysis 2018 | 34
New Zealand
  Country (notes code)                     Korea (KOR)          Vietnam (VN)             India (IN)                         Philippines (PH)            Nepal (NP)
                                                                                                           (NZ)
  Relevant criteria / Date last update            2018               2018                  2018                2018                2018                   2018

  14 Binding Advance Tax Rulings
  (pre-transaction)                                                                                                         Yes on transfer
                                                                                                                            pricing arrange-               Yes
  Are Advance Tax Rulings available               Yes                    Yes                Yes                Yes          ment; otherwise,
  pre-transaction?                                                                                                          requests for ruling
                                                                                                                            based on
                                                                                                                            hypothetical cases
                                                                                                                            are not
                                                                                                                            entertained

  Are these rulings granted only in               Yes                    Yes                Yes                Yes                   Yes                   Yes
  espect of specific situations?

  15 Other taxes

  (a) Capital Duty                       (a) 0.48%             (a) N/A             (a)      N/A       (a) 0%                (a) 1%                (a)    N/A

  (b) Transfer Tax on shares             (b) Refer to item 3   (b) 20% on net      (b) Stamp duty     (b) 0%                (b) 0.75%             (b)    Treated as
                                         above                 gain                    of 0.25% is                                                       disposal of
                                                                                       payable on                                                        share/assets
                                                                                       transfer of
                                                                                       Indian
                                                                                       Company
                                                                                       share
  (c) Annual Net Worth / Patrimonial     (c) 0%                (c) N/A             (c)   NA           (c) 0%                (c) 0%                (c)    N/A
  Tax

  (d) Trade Tax                          (d) 10%8              (d) Generally 10%   (d)      Note 3    (d) 15% (Note 3)      (d) 12% 1             (d) 13% (note 3)

© Nexia International 2018                                                                                      Asia Pacific Holding Company Analysis 2018 | 35
New Zealand
  Country (notes code)                     Korea (KOR)       Vietnam (VN)        India (IN)                             Philippines (PH)            Nepal (NP)
                                                                                                       (NZ)
  Relevant criteria / Date last update             2018               2018             2018                 2018        2018                          2018

  16 Double Tax Treaty Network

  (a) Number of treaties in operation    (a) 92             (a) 68           (a) 86 treaties in   (a) 57                (a) 41                (a)    10 Countries
                                                                             operation
  (b) Is the holding company type        (b) Generally no   (b) No           (b) Generally no     (b) Generally No      (b) No                (b)    Generally,
  excluded from any of the treaties?                                                                                                                 No

  (c) Do any of the treaties include     (c) Yes            (c) Yes          (c) Yes              (c) Yes               (c) No                (c)    Yes
  “anti-treaty shopping” provisions
  and/or detailed “beneficial
  ownership” tests?

  17 Exchange Controls                             No                 N/A              Yes                  No          Outward               Foreign exchange
                                                                                                                        investments by        control is
  Are Exchange Controls restrictions                                                                                    PH holding            regulated by
  applied in respect of the holding                                                                                     company up to         Foreign
  company type?                                                                                                         US$60 million per     Investment and
                                                                                                                        year does not         Technology
                                                                                                                        require prior         Transfer Act 1992
                                                                                                                        approval by           and Foreign
                                                                                                                        Bangko Sentral ng     Exchange
                                                                                                                        Pilipinas (BSP)       (Regulation) Act
                                                                                                                                              1962. It governs
                                                                                                                        If it exceeds limit   the cross-border
                                                                                                                        require BSP           transactions
                                                                                                                        approval              involving
                                                                                                                                              movement of
                                                                                                                                              foreign exchange
                                                                                                                                              into and out of
                                                                                                                                              Nepal.

© Nexia International 2018                                                                                  Asia Pacific Holding Company Analysis 2018 | 36
New Zealand        Philippines
  Country (notes code)                    Korea (KOR)        Vietnam (VN)             India (IN)                                                    Nepal (NP)
                                                                                                              (NZ)            (PH)
  Relevant criteria / Date last update        2018                 2018                  2018                   2018          2018                     2018

  18 Base Erosion Profit Shifting
                                         Introduction of    Annual transfer      Concept of              Introduction of      Introduction of    There is no
  What kind of tests have been           contemporaneo       pricing             Significant             contemporaneou       transfer pricing   specific
  introduced as a result of BEPS?        us transfer         documentation       Economic Presence       s transfer pricing   documentation      introduction of
                                         pricing             for related party   (SEP) has been          documentation        requirements for   contemporaneous
                                         documentation       transactions is     introduced in           requirements for     related party      transfer pricing
                                         requirements for    required            domestic law from       related party        transactions       documentation
                                         related party                           FY 2019-20              transactions                            requirements for
                                         transactions                            onwards. Further, in    exceeding                               related party
                                         exceeding                               line with Action Plan   specific                                transactions,
                                         specific                                1, equalisation levy    thresholds.                             however
                                         thresholds                              is introduced in                                                government can
                                                                                 domestic law.                                                   investigate any
                                                                                                                                                 time since it is
                                                                                 Action Plan 4                                                   required to
                                                                                 regarding Limitation                                            disclose related
                                                                                 on Interest                                                     party transaction
                                                                                 deduction is being                                              of any amount in
                                                                                 implemented.                                                    financial
                                                                                                                                                 statement.
                                                                                 Action Plan 13 has
                                                                                 bee been
                                                                                 implemented.
                                                                                 Country-by-
                                                                                 Country Reporting
                                                                                 Master File
                                                                                 guidelines fore
                                                                                 Transfer Pricing
                                                                                 have been
                                                                                 prescribed.

© Nexia International 2018                                                                                      Asia Pacific Holding Company Analysis 2018 | 37
NOTES TO ASIA PACIFIC HOLDING COMPANY ANALYSIS

  SG        SINGAPORE (SG)
  SG1
            Foreign-sourced dividend income earned and received in Singapore by a Singapore tax resident company which satisfy following
            conditions are tax exempt in Singapore:
               i.    In the year the dividends are received in Singapore, the headline (highest) corporate tax rate of the foreign jurisdiction from which
                     the dividend is received is at least 15%; and
               ii.   The dividends received in Singapore must have been subjected to tax in the foreign jurisdiction from which the dividend is received
                     (i.e. either withholding tax and/or underlying tax is paid or payable); and
              iii.   The Singapore tax authorities are satisfied that the tax exemption would be beneficial to the person resident in Singapore

  SG2       Partial tax exemption scheme
            Effective from Year of Assessment 2008, a partial tax exemption is given to companies on normal chargeable income* (excluding Singapore franked
            dividends) of up to S$300,000 as follows:

            Exempt amount
            First S$ 10,000         @ 75% = S$ 7,500
            Next S$290,000          @ 50% = S$145,000
            Total S$300,000                 S$152,500

            * Normal chargeable income refers to income to be taxed at the prevailing corporate tax rate.

            Tax exemption scheme for new companies
            Full tax exemption on the first S$100,000 of chargeable income and 50% tax exemption on the next S$200,000 of chargeable income is available for a
            start-up company incorporated and tax resident in Singapore which has its total share capital beneficially held directly by no more than 20
            shareholders:
                 (a) where all the shareholders are individuals throughout the basis period; or
                 (b) at least one shareholder is an individual holding at least 10% of the total number of issued ordinary shares.
            The full tax exemption is available for the first 3 consecutive Years of Assessment.

             This exemption scheme is not applicable to the following companies set up from 26 February 2013:
                 (i)     Investment holding companies that derive only passive incomes such as dividend and interest income; and
© Nexia International 2018                                                                                     Asia Pacific Holding Company Analysis 2018 | 38
(ii)     Companies whose principal activity is that of developing properties for sale, investment or both.
            Corporate Tax Rebate
            Companies are granted a 40% Corporate Tax Rebate (capped at S$15,000) for Year of Assessment 2018 and 20% Corporate Tax Rebate (capped at
            S$10,000) for Year of Assessment 2019 (for income derived in the financial years ended in 2017 and 2018 respectively).
  SG3
            Singapore has a Goods and Service Tax (GST) which is a broad based consumption tax and is currently charged at 7%.
  SG4       Typically, foreign-owned investment-holding companies (defined as companies where 50% or more of its shares are held by foreign
            companies/shareholders) with purely passive sources of income and receiving only foreign-sourced income are not eligible for a Certificate of Residence
            (COR) in the eyes of the Singapore tax authorities. As a practice,however, the Singapore tax authorities may grant a COR if the company is able to satisfy
            them that:

               1.   The control and management of the company is in Singapore; and
               2.   The company has valid reasons for setting up an office in Singapore.

            To satisfy these conditions, the company would need to demonstrate that decisions on strategic matters are made in Singapore for example by
            demonstrating that their board of directors' meetings are held in Singapore. Apart from this, the company must also:

               a.   Have related companies in Singapore that are tax residents or that have business activities in Singapore; or
               b.   Receive support or administrative services from a related company in Singapore; or
               c.   Have at least 1 director based in Singapore who holds an executive position and is not a nominee director; or
               d.   Have at least one key employee (e.g. CEO, CFO, COO) based in Singapore.

  MM        MYANMAR (MM)
  MM1       Myanmar has a Commercial Tax (CT) which is a turnover tax on goods and services produced or rendered in Myanmar. CT ranges from 0% to 120%.
            However, the general rate is 5%.
            Myanmar also levies taxes in the form of Excise duty on alcoholic drinks and Special Commodities tax on special goods such as cigarettes, tobacco
            leaves, beer, wine, gem stones, certain cars, fuel etc.

  KH        CAMBODIA (KH)
  KH1       If a Company distributes dividends from retained earnings that have not been subject to tax in Cambodia, the distributing dividends company is subject
            to the additional profit tax on dividend distributions at a 20% rate.
  KH2       The tax rate on profits ranges from 0% to 30%, based on the business activity. The standard rate is 20%. Enterprises operating in certain industries,
            such as oil and natural gas production or exploitation of natural resources including timber, ore, gold and precious stones, are taxable at a 30% rate.

© Nexia International 2018                                                                                        Asia Pacific Holding Company Analysis 2018 | 39
KH3       Cambodia has turnover tax in the form of VAT which is levied on taxable supplies which includes a wide range of goods and services supplied in
            Cambodia and on the importation of goods.
            Cambodia also levies Specific tax on certain merchandise and services at the rates ranging from 3% to 45%. This is a form of excise tax levied on
            certain locally manufactured goods and services as well as certain imports for eg. air tickets, telephone services, entertainment services, beer,
            automobiles etc.
  MY        MALAYSIA (MY)
  MY1       The rates of RPGT is as follows (w.e.f. 1 January 2014):

             Date of disposal                                                   Rate
             Disposal within 2 years after the date of acquisition              30%
             Disposal in the 3rd year after date of acquisition                 30%
             Disposal in the 4th year after date of acquisition                 20%
             Disposal in the 5 year after date of acquisition
                                th                                              15%
             Disposal in the 6th year after date of acquisition or               5%
             thereafter
  MY2       Preferential Small and Medium Enterprise (SME) tax rate for resident companies incorporated in Malaysia with ordinary paid-up share capital of MYR2.5
            million or less at the beginning of the basis period is as follows:

             Chargeable                           Year of Assessment
             income
                                   2009 to 2015             2016           2017 and
                                                                           onwards
             First                      20%                 19%              18%
             MYR500,000
             On subsequent              25%                 24%              24%
             chargeable
             income

            Preferential tax rates not applicable if more than:
            (a)     50% of the paid-up capital in respect of ordinary shares of the company is directly or indirectly owned by a related company;
            (b)     50% of the paid-up capital in respect of ordinary shares of the related company is directly or indirectly owned by the first mentioned company;
            or
            (c)     50% of the paid-up capital in respect of ordinary shares of the first mentioned company and the related company is directly or indirectly owned
            by another company.

© Nexia International 2018                                                                                       Asia Pacific Holding Company Analysis 2018 | 40
‘Related company’ is defined as a company which has a paid up capital exceeding MYR2.5 million in respect of ordinary shares at the beginning of the
            basis period for a year of assessment.
            The reduction in the income tax rate based on the percentage of increase in chargeable income as compared to the immediate preceding year of
            assessment be given to the entities if fulfil the criteria. The reduction of the income tax rate for YA 2017 and YA 2018 is as follows:

                    Percentage of increase in            Percentage      Reduced income tax
                    chargeable income as               point reduction    rate on increase in
                    compared to the immediate           on income tax    chargeable income
                    preceding year of assessment             rate                 (%)
                    Less than 5%                             NIL                  24
                    5% – 9.99%                                1                   23
                    10% – 14.99%                              2                   22
                    15% – 19.99%                              3                   21
                    20% and above                            4                    20
  MY3       Fees to be paid to the Registrar by a company having a share capital which based on its nominal share capital.

  MY4       Stamp duty on transfer of shares will be computed based on price or value thereof on the date of transfer whichever is the greater. Stamp duty on sales
            of any stock, shares or marketable securities is MYR3 for every MYR1,000 or fraction part of MYR1,000.
            If the instrument is using contract note (through stock broker), the stamp duty relating to the sale of shares, stock or marketable securities is MYR1 for
            every MYR1,000 or fractional of MYR1,000.

  MY5       Goods and Services Tax (“GST”), a broad based consumption tax, is currently chargeable at 6%. However, some supplies are zero rated or exempt.
            Effective 1 June 2018, the GST rate of 6% is changed to 0% and GST (Zero-Rated Supply) Order 2014 is revoked with effect from 1 June 2018.

  TH        THAILAND (TH)
  TH1       There shall be exempted from income tax of the Revenue Code to a limited company or a public limited company setting up under Thai law on
            assessable income being dividend received from a juristic company or partnership setting up under the foreign law; provided under the rules,
            procedures, and conditions as follows:
            a. A limited company or a public limited company shall hold not less than 25 percent of shares with voting rights of the juristic company or partnership
                who pays dividends for the period of not less than six months from the date of acquiring such shares until the date of receiving dividends, and

© Nexia International 2018                                                                                         Asia Pacific Holding Company Analysis 2018 | 41
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