bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Inside Kornerstone Institute's lecture room in Central,  the audience sat patiently, waiting for the seminar on China's tax system to start. They were not disappointed when Bert Kwok began his lecture on the 'Principles of Accounting and Taxation in the PRC' and proved to be an engaging speaker.
Kwok is currently an executive partner of ChengHe CPA in Hong Kong and holder of a Chinese Institute of Certified Public Accountants (CICPA) qualification with the Association of International Accountants. Thus, he would be one of the best people to talk about the subject. 
Kwok began the seminar by introducing Chinese accounting standards, the system of accounting that companies are now using  on the mainland. 
He said the Chinese accounting standards were  unique because, unlike in most Western countries, China has a plethora of  huge state-owned enterprises.  
Kwok  added that Chinese accounting standards were basically in convergence with the International Financial Reporting Standards (IFRS), an accounting system   recognised globally and adopted by many other developed and free-market countries. 
'Even the European Union (EU) has approved Chinese accounting standards,'  he said.
He disclosed that the  EU recommended to the European Parliament that China's enterprises be allowed to enter the European market by the end of 2011, with audit reports using Chinese accounting standards. These companies need not adjust their reports by using IFRS. 
This seems to be  great news to China's enterprises. However, some attendees questioned whether mainland audit reports  could be trusted. Kwok said  it's  quite common for the enterprises in China to have two,  three or even four sets of accounts. 
'They will usually have different sets of accounts shown to different parties. One for the bank, one for the boss and one for themselves,' Kwok said.
Over the past couple of months, several  Chinese enterprises listed in the United States have been delisted by US Securities and Exchange Commission  after it discovered that most of these enterprises submitted inaccurate audit reports.  
Kwok said these cases  showed how serious the  problem was. Investors often found it difficult to differentiate between accurate and inaccurate reports, he added.  
Kwok said this was undoubtedly one of the major problems investors had to confront if they wanted to  invest in China. 
Moving on to the second part of the seminar, Kwok introduced  the tax reforms to be carried out in China in the  next five years. 
'There  was a major tax reform in 2008, and with the announcement of the 12th Five-Year Plan early this year,  China will once again  have another tax reform,'  he  said.
Kwok said the new batch of tax reforms included value added tax (VAT),  which would be expanded. In the meantime, the list of items subject to consumption tax would also be adjusted.  High-energy and resource-consuming products would be included in the consumption tax list, while items such as cosmetics would be removed from the list because they were regarded as common items instead of luxuries, Kwok  explained. 
What's more, measures would be strengthened to stop tax  evasion.  
When  doing business in China, it's common for investors to face some tax-related problems.  'Low key is always the best solution - never to make it known to the public. All the parties should try to keep it as low key as possible. This is the golden rule to settle all the tax-related disputes and problems on the mainland,' Kwok said.
The seminar, jointly organised by Classified Post and Kornerstone, was well-received. The  audience  mainly asked  how to set up business and pay taxes  on the mainland. 
Tom Mou,  director of a local English learning centre, said the seminar  was informative. 'I plan to set up a business on the mainland at the end of this year. So this seminar certainly helped me  acquire necessary and valuable information,' he said.
Mou  said knowing more about  the real situation  when doing business in China  did not discourage him, but  it did persuade him to  research more before proceeding.
Janet Tong, an accountant, agreed that taxation in China was  like a riddle. 'The problem is it changes all the time. That's why I keep  on taking courses  in various universities  to keep up with the  latest information regarding taxation in China,' she  said. 
Tong said Kwok gave a clear introduction about issues relating to taxes and accounting on the mainland.
Joanna Han, who works as an accounting officer at a company which provides corporate services, said  that Kwok's   lecture was comprehensive. 
'Sometimes some  of our clients  ask about taxation issues in China. That's why I need to learn more,' she  said, adding that  she liked how Kwok presented and analysed real cases.
Heads up
Measures will be strengthened to stop tax  evasion
List of items subject to consumption tax will be expanded
Audit reports may turn out  to be inaccurate



Comprehensive take on China's taxation