ASEAN Regulatory Brief: Cambodian Company Registration, New Philippine Levies, and Indonesian Tax Holidays

This edition of ASEAN Regulatory Brief features new company registration methods in Cambodia, a new levy in the Philippines, and an Indonesian tax holiday.

Cambodia: Companies required to re-register when government launches online registration

Companies registered with the Ministry of Commerce will be required to re-register once the online registration is launched on 7 December. More than 50,000 firms are registered with the ministry. The online registration aims to cut through the red tape involved in starting a business in the country. Registration is free and should take around 45 minutes.

Officials have stated that the new system will cut down on unofficial fees associated with the paper based manual system. The government plans to give companies a year to re-register; however no punitive measures were provided if companies failed to comply. The data from the online registration will also be available to other government agencies including the tax department and the customs authority. Companies in the country should take advantage of the new online registration system as this will help in ease of doing business. 

Philippines: Proposed law seeks to impose tax on sugar-sweetened beverages

The government has proposed an excise tax on sugar-sweetened beverages such as soft drinks and energy drinks of about P10 (US $0.22) for every liter. In addition, a 4 percent increase every year will also be imposed from 1 January 2017. The bill defines sugar-sweetened drinks as a non-alcoholic beverage that contains caloric sweeteners, added sugar or artificial/non-caloric sweetener. This also includes sweetened tea, coffee and ready to drink non-alcoholic beverages in powder form. However, all natural fruit and vegetable juices, yogurt beverages and milk products will be excluded.

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If the law goes ahead, distributors failing to declare the volume of sales would result in the cancellation of permit and as well as fines. Analysts indicate that the prices of soft drink would rise by 16 to 36 percent whereas powdered juices would increase by 101 to 140 percent. The Beverage Industry Association of the Philippines (BIAP) has opposed the tax and claimed it as ‘anti-poor and anti-business’. The BIAP further stated that such taxes will put an additional burden on everyday consumers due to the increased prices.

Indonesia: Government announces tax holiday for foreign investors

Indonesia’s Finance Ministry announced a range of tax incentives for foreign investors in a bid to boost investment and economic growth. To be eligible, companies must invest a minimum of US $71 million and could receive a tax break ranging from 10 to 100 percent. The initial period for the tax holiday would be between five to 15 years, with a possible extension of another five years. The regulation applies to specified sectors in base metal, oil refinery, basic petrochemicals, machinery, renewable energy, telecommunication equipment, marine transportation, processing industries in special economic zones and joint public/private economic infrastructure.

The tax scheme is designed to attract foreign investment into the country’s remote areas, where economic development has taken place at a slower pace. Reports indicate that companies will be able to earn twice the revenue that previous regulations permitted. The government in recent weeks has also announced interest tax relief for exporters, exempted certain goods in industrial processes from import duty, and exempted imported transportation equipment and related delivery services from value-added tax.

Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.

An Introduction to Tax Treaties Throughout Asia
In this issue of Asia Briefing Magazine, we take a look at the various types of trade and tax treaties that exist between Asian nations. These include bilateral investment treaties, double tax treaties and free trade agreements – all of which directly affect businesses operating in Asia.

The 2015 Asia Tax Comparator
In this issue, we compare and contrast the most relevant tax laws applicable for businesses with a presence in Asia. We analyze the different tax rates of 13 jurisdictions in the region, including India, China, Hong Kong, and the 10 member states of ASEAN. We also take a look at some of the most important compliance issues that businesses should be aware of, and conclude by discussing some of the most important tax and finance concerns companies will face when entering Asia.

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