2010 April - May 47
CHAMBER NEWS <strong>SHANGHAI</strong> PAGES Save Some for Me A special in-house workshop held at the AHK office in Shanghai recently discussed the topics of Social Security and Tax Deductions/ Structures for expats. Mr. Ralph Koppitz of Taylor Wessing presented the first part of the event in three main topics: mandatory Chinese social security for expatriates in the future, recent developments in Chinese labour laws, and trends for future developments. Since 10 th October 2009, expats in Shanghai have been able to voluntarily participate in selected aspects of the Chinese Social Security System. Mr. Koppitz noted the voluntary programme’s resemblance to a test run, indicating that participation may become mandatory in the future. Another important point of Mr. Koppitz’ presentation focused on local courts following their own interpretations of laws. Because legalities of business practices vary across China, there is no assurance that social security will be the same across different regions. The final section included analysis on work related injury insurance law, labour dispatch and PRC Social Security Law, which are all in the process of being examined and re-written. GC Roundtable A collaborative presentation from representatives of the investment, electrical and automotive industries in China outlined increasing business concerns surrounding consequences of Chinese development. Starting with a historical introduction of the JV Roundtable, Mr. Kurt Fasser presented the event under a new name: GC Roundtable. An overview of the automotive industry and its current difficulties were presented to the table by Mr. Dirk Landgrebe of Hirschvogel Automotive Components. He explained that the industry seems to be problem free, other than the issue of finding qualified personnel in China. The future development of China 48 April - May 2010 Special Seminar Event: Social Security issues and challenges for expatriates in China Date: 20 th January 2010 Speakers: Mr. Ralph Koppitz | Partner & Chief Representative, Taylor Wessing; Mr. Gerald Neumann | Senior Partner, WOTAX Chair: Mr. Jan Höpper | Regional Manager Shanghai, German Chamber of Commerce l Shanghai One-on-One Lesson in Times of Insecurity Mr. Kurt Fasser (CON MOTO) Moving to the fiscal part of the workshop, Mr. Gerald Neumann of Wotax laid out two important questions: “What tax deductions are currently possible for expats in China?” and “How can companies benefit from related tax structures?” Underneath these overarching questions, Mr. Neumann discussed employee and employer viewpoints. Within the employee section, scope of tax liability, Chinese particular characteristics of tax appraisal and tax benefits, details for tax structuring, and tax imposition were examined, for the employer section, allowances for operating expenditures, cost transfer and consequences of non-transfer, permanent establishment of the mother company in China, and so called “effective executive board” of the Chinese subsidiary. Importance was emphasised on unlimited income tax liability for expats residing in China for over five years, expenses of company pension schemes and where they are deductible. Participants learned from each other as they discussed personal experiences regarding the five-year timeline of unlimited income tax liability. Many other topics worked their marks an insecure situation. The speaker metaphorically explained this concern and others as diverse bubbles that are fragile and waiting to burst into an economic crisis. Talking about insecurity, two other issues were forecasted by the next two speakers. Mr. Hermann Bohle of RA Dragon Invest noted the increasing wages in China and Mr. Walter Michel of E.G.O. commented the transfer of German development. With numerous taxes and other side costs in China, how can one ensure financial safety? The panel concludes that increasing wages can be avoided by signing net contracts way into the discussion, with the consistent advice from all participants being: negotiate as much as you can, as early as you can, to avoid problems down the road. Mr. Ralph Koppitz (Taylor Wessing) that include side costs, while the human resources are continuously observed. Product protection can be maintained via software programmes that the presenters claim to be significant for all future development. The financial crisis also opened eyes to the current trend of expanding and pushing organisations into new fields – something many companies are now considering. Event: War die Talfahrt ein Gesundungsprozess? Date: 21 th January 2010 Speakers: Mr. Dirk Landgrebe | General Manager, Hirschvogel Automotive Components; Mr. Hermann Bohle | General Manager, Dragon Invest co. Ltd. Shanghai; Mr. Walter Michel | General Manager, E.G.O. Electrical Components Chair: Mr. Kurt Fasser | General Manager, CON MOTO Consulting Group Shanghai Office & Senior Advisor AHK Shanghai