Inaugural Moore Stephens Asia Pacific Tax Conference in Tokyo to focus on transfer pricing, corporate and ex-patriate tax issues

The rapid rise of Asia, led by economic powerhouses China and India, has been well documented in recent years.

The economic outlook for the Asia Pacific region remains robust – “the strongest in the world, in fact’’ - according to the latest International Monetary Fund report, which predicts steady 5.4% regional growth this year.

To put APAC in some perspective, China and India together have a population of 2.7 billion – three times larger than the European Union and the United States combined – and their combined GDP of US$33 trillion is 50% larger than either the US or the EU.

China produces eight times more steel than the US and 50% more automobiles, consumes almost half the world’s copper supply and similarly large volumes of stainless steel, aluminium and cement.

The good news is Australia is well placed, geographically, politically and from a policy perspective, to capitalise on this momentum.

Our free-trade agreements with countries such as China, South Korea, Malaysia, Japan, Singapore and Thailand help further facilitate trade within the APAC region and such trade accounted for about 64% of our exports in 2016.

These free-trade agreements along with the country’s Significant Investor Visa program - which eases the residency requirements for permanent visas for those ready to invest into state government bonds, specific infrastructure and property investments - has also helped fuel inbound investment. This program has worked particularly well with China.

Australia is now the third most popular destination for Chinese foreign investors to invest wealth offshore, with a 7% increase in Chinese private wealth flowing here, while interest in the top two investment destinations (Hong Kong and the United States) fell by 18% and 3% respectively.

All this investment activity – both inbound and outbound – requires quality, informed and up-to-date professional services advice across a range of corporate governance matters, from structuring, tax, audit, repatriation of funds to corporate and personal tax issues.

The fundamental and critical reality is, doing business in the Asia Pacific region can be a complex, confusing and – ultimately -  potentially futile mission unless supported by experienced, respected and agile experts such as those on the Moore Stephens Australia Asia Desk.

The Moore Stephens Australia Asia Desk is a critical interface between our existing national network and the broader MSAPAC and global network, providing invaluable experience, insights and knowledge about doing business between Australia and APAC both from an inbound and outbound perspective.

Our members are from a multi-disciplinary background and their experience covers a broad spectrum of industries, from agriculture, mining and property to shipping, leisure and tourism. Their significant skills are augmented by both language, cultural and personal relationships coupled with hands-on experience gained over many years.

To ensure we stay at the forefront of the forever changing APAC business landscape, particularly from a tax perspective, we are sending key members of our Asia Desk committee to the inaugural Moore Stephens Asia Pacific Tax Conference.

This event, to be held in Tokyo in early June, will discuss a range of salient and topical issues critical to meeting our inbound and outbound client requirements. Amongst the main topics of discussion will be:

  • Transfer Pricing – the proliferation and diverse application of transfer pricing rules in the region, which are designed to mitigate international tax “avoidance’’; the impact of the OECD’s BEPs project and, in particular, Significant Global Entities and Country by Country Reporting obligations;
  • Corporate Structuring – this area will cover a multitude of considerations associated with how a business should structure itself, associated tax implications, hubs, debt financing issues and repatriation of profits; and
  •  Expatriate Taxation and Visas – the implications and requirements of tax residency, double taxation and visas.

Put simply, in dealing with APAC, it’s not about abiding by a uniform set of rules. Internationally recognised principles are not interpreted and applied uniformly.

For example, in transfer pricing matters, documentation and compliance matters can vary significantly within APAC even if they purport to be based on the same fundamental core arm’s length principle.

From a technical perspective, the Moore Stephens Asia Desk must be well-versed in the key tax developments within the region and how that impacts both our inbound and outbound clients. Our members must also have strong relationships with key personnel across the APAC network who have valuable, in-depth local knowledge and contacts for each particular country.  

Clients can grapple with all manner of big-ticket issues without appropriate assistance.

Some common questions, might be: what are the implications of establishing a regional sales and marketing hub in Singapore compared with Hong Kong? Is it best to structure inbound investment into China via a Hong Kong subsidiary? What is peculiar about the Indonesian interpretation of the OECD arm’s length principle?

Aside from the differing tax rates and other rules that clients, with our assistance, must navigate, there are considerable cultural and social conventions or customs, that need to be understood in order to build strong relationships and rapport and, ultimately, facilitate successful business outcomes in APAC.

For example, the seemingly trivial oversight of not presenting your business card in the correct fashion (presented in both hands between index fingers and thumbs, with head slightly bowed) can have significant and lasting negative consequences for future business negotiations. And, if you’re invited to dinner, it’s considered rude to leave before your host.

The inaugural Moore Stephens Asia Pacific Tax Conference will ensure our clients are advised according to the most relevant, up-to-date tax developments with the added benefit of an interactive, dynamic and evolving network across the region.

This, we believe, is critical to our clients’ ongoing and sustained success in the APAC region already punching well above its economic weight.