Emerging Markets Rates and Currencies Handbook

resolution and Audit report. For incomings of services export: For amount below or equivalent to USD 50K, generally no supporting documents needed but the bank shall confirm the nature of the incoming transaction with the clients. For amount above USD 50K, following documents will be required: Invoice, Contract, or other documentation depending on the category of service. In case client would like to apply for paperless service: The bank can choose to review either paper or electronic documents (only Category A enterprises may enjoy this service). Banks are required to be prudent in reviewing documentation, conducting sound KYC, KYB and Due Diligence. Corporates are required to comply and prove the authenticity of their documents. Capital Flow and FDI Usage of RMB converted from FDI capital to be specified, and can only be used to support business activities within the client’s approved business scope. Client can decide the amount that needs to be converted at their will. Capital flow related FX transactions must be conducted with the bank at which the capital account is opened. All capital flows need to be registered by each specific currency at the Ministry of Commerce. The following supporting docs for conversion should be presented by the client: i. Payment order (in SAFE’s standard format) ii. The related contract or payment notice iii. Evidence for the payment for the last converted RMB funds and related supporting documents for their detailed usage). Additional Comments RMB related hedging is allowed on true underlying basis. Citi China 33 Hua Yuan Shi Qiao Road, Pudong, Shanghai China 200120 FX Sales Contact: +8621 2896 6630 Tax Summary – China China W/H Tax • 10% WHT • Under certain tax treaties typically 10%, with further reduction possible on country by country basis • 10% WHT • Under certain tax treaties typically 10%, with further reduction possible on country by country basis • No WHT on interest paid to certain government bodies • No WHT • Onshore: N/A • Offshore: U ncertain, prevailing market practice is n o WHT • 10%WHT on dividends • 10% WHT on capital gain on sale of equities • Under certain tax treaties typically 10%, with further reduction possible on country by country basis Deductibility of interests • Interest is deductible, unless D/E > 2x (D/E > 5x for FIs) • If sufficient evidence to show the financing is at arm’s length, • Generally deductible • Thin Cap Rules apply only with respect to related party financing • N/A • N/A Country Tax Deductibility and Considerations Inter-Co Debt Offshore Derivatives Equities Bank Loans Offshore Local Borrowing