Hong Kong enterprises operating in mainland should consider transformation to reduce tax expenses

2007-08-03 Hong Kong

According to the article written by a tax partner of Deloitte, operating costs of Hong Kong enterprises operating in mainland China rose with the appreciation of Renminbi. The reduction or cancellation of export tax rebate for some products by the Chinese government led to a significant rise in costs of Hong Kong enterprises processing with imported materials. As a result, enterprises processing with imported materials should weigh on the operating environment and tax burdens and consider transformation if necessary, including setting up high-tech companies to enjoy tax discounts, so as to reduce their expenses relating to income and value-added taxes in the mainland.