The parent company of Shenzhen-located Japanese manufacturing Company A is a Hong Kong-located Company B. Previously, due to lack of understanding of the relevant provisions of the Sino-Hong Kong tax arrangement, Company A applied to a dividend rate of 10% when it distributed dividends to Company B. In early 2013, we successfully assisted Company A to apply with the in-charge tax authority for the preferential dividend rate of 5% indicated in Sino-Hong Kong tax arrangement.
To collect required information and materials in the application for dividend related tax preference according to Sino-Hong Kong tax arrangement;
To analyze the operation substance of Company B and determine whether it meets the conditions of the beneficial owner or not;
To assist Company A with the contract filing of the Board of Resolution on Dividends Distribution (required procedure before application for dividend related tax preference);
Based on obtained information and materials, to draft the application documents, particularly the explanation letter demonstrating that Company B complies with the conditions of the beneficial owner;
To assist Company A to submit application documents to the in-charge tax authority, to answer the question raised by the in-charge tax authority and finally obtain the written consent from the in-charge tax authority.
In the case above, we successfully completed the application for Sino-Hong Kong tax arrangement related tax preference for dividends.