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The Latest News on No-deal Brexit and Preferential Policy of Individual Income Tax

Brexit

No-deal Brexit gets closer – businesses alarmed

The withdrawal agreement arranged by PM Theresa May is inadmissible

The probability of a No-deal Brexit on October 31 is rising up every day. This causes a serious anxiety among business in Britain and overseas. 

A candidate for leader of the Conservative Party, Boris Johnson, has said the withdrawal agreement arranged by PM Theresa May is inadmissible. He said he will require the European Union to review it and if they do not, he will take Britain out on October 31, with no deal.

A seminar in Hong Kong was conducted recently where there was a discussion about possible influence of a No Deal. The main opinion was that it might be the worst outcome because it would be impossible for companies  to map out the post-exit stage. 

One speaker said the sterling was likely to fall to offset for the higher rates which  British companies would have to pay to get into the foreign markets.

The island of Ireland is one of the places that might suffer the most because of a No-Deal Brexit since The Republic of Ireland will remain in the EU, while Northern Ireland will leave. The border between them is around 500 km and has 270 crossing roads. Currently it is free of customs controls for goods and people.  


Japan

Japan ‘very concerned’ over no-deal Brexit: foreign minister

A disorderly departure from the European Union risked disrupting investment.

Taro Kono, Japan’s foreign minister, said he has begged Britain to avoid a no-deal Brexit. 

“We’re very concerned with a no-deal Brexit,” he told BBC News on G20 summit in Osaka.

There are more than 1,000 Japanese companies currently operate in Britain and Japanese authorities have been asking the UK government to let them know what they can expect.

Taro Kono noted that a disorderly departure from the European Union risked disrupting investment.

Some companies are already moving their operations to other places in Europe.


Brazil; Switzerland

Social security agreement between Brazil and Switzerland approved

On 18 June 2019, the Brazilian Congress approved the Brazil – Switzerland Social Security Agreement (2014), by way of Legislative Decree No. 54/2019, as published in Official Gazette No. 117 of 19 June 2019.

Further developments will be reported as they occur.


China

Implementation rules on preferential policy of individual income tax in Greater Bay Area in China issued

Highly skilled migrants will be compensated with financial subsidies granted by the local government

On 22 June 2019 the Guangdong provincial government together with the Guangdong tax authority released a circular “Notice on Implementing the Preferential Policy of Individual Income Tax in the Greater Bay Area of Guangdong, Hong Kong and Macao”.

The implementation rules on the preferential individual income tax (IIT) treatment to attract talented persons to the Greater Bay Area are as follows:

  • highly skilled migrants will be compensated with financial subsidies granted by the local government. Thus, the amount of the subsidy is the IIT paid in the Greater Bay Area less 15% of the taxable income
  • the subsidies, calculated per category of income, must be aggregated and are granted once a year. The subsidies themselves are exempt from IIT
  • income eligible for the preferential policy includes wages and salaries, authors’ remuneration, royalties, business income and the subsidies from the selected talent projects
  • to be eligible for the subsidy, the foreign talents must make an application themselves and be permanent residents in Hong Kong, Macao, Taiwan or other foreign countries. Also they must obtain a certification from the relevant Guangdong government department to be recognized as a talented person or skilled persons in shortage

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