Attracting new businesses is part of the game plan. Besides offering federal and state corporate income tax rates that are lower than those in the United States- China'sblendedtoptaxrateis25 percent compared to 39.1 percent in the United States - China revamped its Value Added Tax, or VAT, a kind of national consumption tax that's similar to state sales taxes in the United States.
Finance CPAs: Cross-border opportunities with China are expanding N.J. company looks to overseas Christina Mazza partner for savings in business By Martin C. Daks wHeN JAMES FLANNERy was in Harbin, China on a business trip, he saw a roomful of workers in a manufacturing facility feverishly plucking pills from a conveyor belt and pack- ing them into bottles by hand. Leaning against a wall was an unused, high-speed machine designed to do that very task. “I asked the manager why he was using manual labor when the machine could do the job a lot faster,” said Flannery, managing prin- cipal of MSPC, a Cranford-based CPA firm, who went to mainland China this summer. “He told me that the machine kept breaking down and in China, at least, maintenance costs would be greater than the cost of manual labor.” with a population of about 1.3 billion, labor is cheap in China. Flannery is working with a New Jersey-based consumer goods manufacturer that wants to partner with a China-based company to take advantage of the relatively low costs. But the Asian giant has been steadily trying to diversify its industries, branching out into high tech and other segments; and New Jersey busi- nesses could benefit from the move, according to Certain businesses in China receive incentives, depending on location, says Wanru Xue, director with Jiangsu Suya Jincheng CPAs, left, and fellow director Wang Yijun, in Franklin Township. Flannery and CPAs from China who were in New Jersey this month to exchange ideas and drum plan. Besides offering federal and state corporate “During the time I’ve been here [in the United Accounting up some cross-border business. U.s. companies income tax rates that are lower than those in the states] I’ve seen many kinds of software applica- that want to do business in China, however, exchanges in the United states. United states — China’s blended top tax rate is 25 tions that would make my job easier,” Xue said. must meet certain requirements and have to cut “China’s gross domestic product [a mea- percent compared to 39.1 percent in the United “Our country needs this kind of technology.” through some red tape, they said. sure of a nation’s economic output] grew [at an states — China revamped its Value Added Tax, Despite some regulatory loosening, Chi- “The [Chinese] national government has annualized rate of] more than 7 percent for the or VAT, a kind of national consumption tax that’s na’s economy is still dominated by the cen- reduced corporate income taxes and is offer- first three quarters, and is expected to increase similar to state sales taxes in the United states. tral government, which means there’s a lot of ing incentive plans to businesses in targeted by a total of more than 8 percent by the end of “For income tax purposes, companies bureaucracy, Flannery said. “we’ve got two industries and geographic locations,” said 2009,” Xue told NJBIZ in an exclusive interview could only deduct from sales the VAT assessed full-time employees in Hong Kong that help Wanrue Xue, a director with Nanjing, China- at the paper’s headquarters in the somerset on their raw materials purchases,” Xue said. our U.s. clients that want to expand into China, based Jiangsu Suya Jincheng CPAs, speaking section of Franklin Township. “Until now, much “Now though, companies can also deduct VAT and Chinese firms that want to move into the through a translator. Xue and fellow direc- of that growth has been pushed by government assessed on their fixed-asset purchases.” U.s. market,” he said. “There’s a lot of opportu- tor, Wang yijun, were in the United states to spending, but the national government is now Companies with expertise in telecommu- nity, but as in any cross-border deal, you need meet with MsPC, which has helped China- trying to spur consumer spending.” nications and information technology support people on the ground who know the ropes.” u based companies to get listed on public stock Attracting new businesses is part of the game will get a particularly warm reception in China. E-mail to email@example.com Survey: Third-quarter venture funding plunges company that attracted $15 million.
Pages to are hidden for
"CPAs: Cross-border opportunities with China are expanding"Please download to view full document